Do I use cash or credit to start up?

[Skizzat]

Greetings wand slingers! I'm putting together a new business (do I need to mention a pressure washing one?) and am looking for some input on whether to start up on personal cash or just charge everything to a credit card. I'm a Dave Ramsey fan (he's a big time financial counselor/radio talk show host) and have heard his rants about the dangers of using credit cards and what a huge pile of crap I'll find myself in if I start a business using credit. He's all about paying cash for everything, which is a great idea and I'm all for it, but it sure seems like it'll take a while to save up a bare minimum of $3700 to buy a tiny (3500 PSI, 5.5 GPM) portable rig and a 30" surface cleaner.

On the other hand, I could use the mounds of available credit I seem to have and go buy a small (I'm the guy driving the Ranger) trailer mounted rig that I'll be able to run this weekend. But then I have to make payments on the silly thing and if business stinks during the winter months like I hear it does, I might find myself in a pickle - or at least making payments on gear that isn't paying for itself.

So what do you all think? Wait until March 08 to buy a minimal rig to start out slow, or go drop 5-7k on something more substantial right now?

I'm leaning towards waiting so I can read every small business, sales and entrepreneur book I can lay my hands on between now and March 08. I'm also going stir crazy because every time I drive somewhere in this area (Atlanta suburbs) I'm like "I could pressure wash that!" and "That sure needs a good pressure washing!".

Right now I've got a full time job that leaves me almost zero at the end of the month after everything is paid for. I'll be clear of all debt at the end of this year save for the house and 30k in school loans, and my wife brings home about $1200 from this nanny job she does. That should be enough personal financial data to answer the question I think.

Thoughts anyone?

 

[appearance]

i think if it were me i would wait untill 08 like you said and start off slow and build up little bt little, you dont know what buissness your going to bring in. you say you drive by houses that could be washed but not evryone will pay to have it done you will be surprised how many cheap ppl are out there.

im a pretty lucky one my wife has a good job for the goverment so we just took out a loan on her retirement for 7k all the intrest we pay goes right back in, and we pay like 100$ month against the loan so it works out well. but if it were me i would play it safe and wait until you had the funds or were in the a better position.

 

[john orr]

Assuming you will know what to do with it when you get it, I would look for something used - for now - and upgrade after you've made a few $$ and determined that this is a business that you want to invest in.

Please get insurance, and don't be a lowballer!

 

[CaroliProWash]

You're not going to be able to put your whole business in the back of your ranger if you're in the Atlanta area - you have the reclamation police there! You'd better go do your research on that aspect of the business as well - that's some more $$. Are you in Gwinnet County?

Celeste

 

[Skizzat]

John - You won't catch me lowballing... I've read enough on this board to know that's no good for anyone in the industry. Insurance is a must for me as well. All it takes is one misaligned tip to shoot off through a window and hit someone and I'm toast. I plan to start with a 300k policy - that too low or ok to start with?

Celeste - I'm familiar with the reclamation police and since I don't have the cash yet to purchase all the required reclamation gear needed to work in Gwinett county (I don't live near there btw) I'm just going to make sure the wash water lands in the grass instead of the sewer. I'd like to start with residential flat work which should keep me clear of the gestapo for a while. We'll see.

So starting out with some used gear off Craigstlist or something isn't a bad idea? I can't go too huge b/c I don't want to kill my ranger trying to tow (or stop) 500 gallons of water.

 

[Mark]

You may want to consider the CoolDrive pressure washer:

http://www.pressurewasherzone.com/shop/item.asp?itemid=210&catid=
[hello]

This would be a good unit for residential work and you can add a
Hot Box later!

We have a new Hot Box available, I will post picture next week.

 

[Skizzat]

I looked at the portable unit you suggested Mark, and it's a 4 GPM machine... I was looking to buy a 5.5 GPM portable (3500 PSI) to start with. From what I've read GPM is much more important than PSI (I'm a noob remember) so I was going for the higher GPM. I wanted to get something that'll push a 30" surface cleaner.

Am I trying to start with too much?

 

[MR ALAN]

Am I trying to start with too much?

No, but a 5.5 gpm portable will be a beast to unload off a truck. You may also need a tank where with the 4 you would not on most occasions. Yes, gpm is important and more so depending on the work you are doing. Housewashing is easier with 4 gpm than flatwork due to the vertical nature of the work.

I say talk with Mark about a skid unit for the truck, and some nice hose reels with a small buffer tank. It will make life easier to leave the unit on the truck and just pull hose.
A guy around here has a flatbed Ranger with a Hydrotek 8gpm unit, a Hydrotek filtration system, a 50 tank, 27" surface cleaner and other misc stuff. The truck rides level too.

If you want to have a dual purpose vehicle then your out of luck on this one I guess.

 

[Skizzat]

No, but a 5.5 gpm portable will be a beast to unload off a truck. You may also need a tank where with the 4 you would not on most occasions.

I forgot to mention I've got a 5x10 open utility trailer with a ramp so rolling a 5.5 GPM machine on and off wouldn't be a problem. An earlier post mentioned using a 4.0 GPM machine until I can carry around a tank with me. I'd hate to get to a customer's place only to discover their spigot only puts out 3 GPM. :burn:

Since I currently use my truck as my primary vehicle I'd rather not fill the rear end with pressure washing gear on a skid. With my 80+ round trip commute to my regular job I think my gas mileage would suck big time.

I think I'll wait until next year and start this thing off small, with used hardware, and with cash.

Thanks all for the input! [hello]

 

[PressurePros]

Your machine and equipment is almost irrelevant. A 1.8 gpm machine will clean. More important would be the following questions:

1) Is there a market and how saturated is it? Its one thing to live near a highly populated area with lots of people in higher income demographis and compete against ten companies versus living rural and trying to compete with even a few?
2) Will you make enough money? You may work a total of 30 weeks per year counting rain days, slow times and cold weather. You'll need to generate at least $75K in work to earn yourself a meager salary. How much do you need to live on?
3) How much will you spend on advertising and do you understand how to properly market your company. New companies = 0 customers. How are you going to get the word out?
4) Do you understand how to price and measure jobs? Just a few miscalculations can turn what you may percieve as a profitable job into a waste of time.
5) Do you know the right techniques and chems for cleaning?

If you have done enough research, can answer all of those questions and re still green light then beg, borrow or steal to get it launched. Get medium priced equipment (a used 5.6 gpm hot water machine is a great start) and upgrade as you grow.

 

[Revive]

You can have the best mouse trap on the market, but if you can't sell it, it's worthless.

I'll agree wholeheartedly with Ken.

 

[Skizzat]

Your machine and equipment is almost irrelevant. A 1.8 gpm machine will clean.

A squirt bottle will clean too but do I really want to use it to wash my truck? Everyone here knows time is money and there's a lot of things you just can't do with a small machine - like push a surface cleaner for instance. Doesn't one need about 2 GPM per nozzle to make using a surface cleaner worth using? Am I going to be walking at a quarter mph if I'm using a 2200 psi 2.5 GPM machine? Heck I've got that machine in my garage right now but I didn't think I could start a business with it. You think different?

Thanks for the list of questions there. I live in the Atlanta area so finding work shouldn't be a problem even for a new guy. As for making enough money, right now I've got a full time job that pays the bills but not much else. It'll feed me until the new business gets going. I'm almost debt free but the house and school loans so I'm not totally tapped out paying bills each month.

I've got a few ideas for #3 that I can't test until I have some equipment. No sense in getting a new customer if I don't have the gear to do anything.

#4 is where I'm weak. I've never priced a job before and I understand it's hardly an exact science. I'm open for pointers.

I've been on a few jobs with a friend of mine so I know as much as that'll get me, which isn't much. As for chems I'll be asking a lot of questions of my local supplier and learn the rest from the net, personal experience, and whoever will help me out.

My main reason for waiting to start and pay cash is that since I'm running such a tight budget now I don't want to add a monthly payment for pressure washing equipment that may not be earning anything this winter.

My plan was to grab a 5.5 GPM piece of hardware so we agree there.

 

[Skizzat]

You can have the best mouse trap on the market, but if you can't sell it, it's worthless.

Everything I've read agrees there. I need to learn how to sell myself which is something I'm not very good at. I need to lay my lands on some good books to get some ideas.

How do you pros get the sales? Door to door? Word of mouth? Conventional advertising?

 

[Revive]

Paying cash for your stuff takes the stress off. It's not costing you to sit there when you aren't busy. You have to start some where. All my stuff is mine, other than "MY" truck (leased).

Start with used and or a 4gal machine. Building as you go. You'll soon find out what you need and want. Yes the 5.6 is much better. But getting your feet wet (No pun intended) is paramount. Start with what ever you can. But most importantly, get started.

Selling. Been doing it since I was 17 and I'm 42 now. Books, seminars, motivational tapes/Cd's. All helps at the beginning. Don't forget to ask for the order. And keep asking. Buy or die baby. What's the worst that'll happen. And never seem like your in need of the work. It'll come out in your tone of voice and your demeanor.

Advertising and the market is different up here so no advice.

Loved the times I've been in Atlanta. The underground, the dome...It's been years.

 

[Skizzat]

Start with used and or a 4gal machine.

Thanks for the confirmation man... I just scored a used 4 GPM unit off craigslist for 800 bucks. The guy said "GP" was on the side of the pump so I'm hoping that means it's made by General. Engine is Honda's 13HP gx390 so with any luck it'll start. The guy says its been sitting a while... anything I need to do to the pump before I crank it up to test it?

I've been reading books like crazy but there's no reason I can't add CDs to the mix. Thanks for the advice.

 

[Mark]

Make sure you have oil in the pump and
also in the engine before starting it.

Is this a belt drive or direct drive?

$800 sight unseen?

 

[Skizzat]

It's a belt drive and it wasn't quite sight unseen... I saw a pic of it on the website. The guy cranked it up and let it run for a few seconds and since there was oil in the engine and pump (which is a General TS1511 btw so lucky me) I figured it should be ok. There wasn't any water hooked up but it didn't run for more than a few seconds. Think anything got screwed up?

I did manage to talk him down 40 bux which made me feel a little better...

 

[Mark]

Great!

You should be OK with pump if only run for
a few seconds. Sounds like you got a good deal!

 

[Skizzat]

Yeah I hope so. There were parts hanging off the thing that he didn't know about and I certainly didn't have any idea about. Several hoses (high and low pressure) and connectors he threw in saying they came with the machine but I don't know what they do. Price of being a noob I guess. Maybe if I swallow my pride a bit I'll upload a couple pics and let you guys tell me what the heck I bought and why that one hose is cut off 6 inches from the thingy...

Nothing like learning your business as you go huh?

 

[Mark]

Hey take it from me, humble pie tastes fine!