*
Hello Everyone,
I’m a fledglin’ startup business. I build/install kitchen cabinets. (I will expand into commercial cabinets.) We still don’t have a huge amount of cashflow. But it’s getting better as we get our name out there. I have been delivering cabinets on an open trailer towed by my 80 Jeep J10 truck that’s about shot. I’ve got my eye on a nice cargo trailer, 8×14 tandem axle. But my J10 just ain’t gonna cut it much longer. I’d like to purchase a 3/4 ton truck but geez, $24k – 34k !!!
Question: Anyone care to give me an idea of what you are using now? How did you approach the overhead cost? What did you use when you were starting out? I faced with putting more into the jeep than it’s worth and that’s not good business sense. Plus, it isn’t very good looking and that makes an impression on potential customers even though it has no bearing on my work! (I feel many people associate what you drive (how NICE)with your level of success (read competence)).
I look forward to this discussion!
Chris
Replies
*
How bout a cube van or other larger comm. van? Used but nice might be in the right price range. Check out the returned leases. Or maybe look at the lease route. Course you couldn't tow your boat or buzz up to lake the weekend. Best of luck.
*Debt puts a HUGE burden on business. Instead of financing a new truck, buy a used one. I drive a very nice 88F250. For the work I do, I really would have prefered a 150. I wouldn't have to jump up and down to look in my tool boxes.I bought the truck with only 80K miles on it, new paint job, and ran pretty good. I put in an alternator and an oil pump when I first bought it. In the past couple of years I've done some major repairs but I can do it myself and It's still costing me alot less than a new truck.To make it in any business, you've go to keep your costs as low as you possibly can. If cash is tight, it's not time for a new truck. When you're big and making money, maybe you can do that.BTW, I keep it clean, keep it maintained, keep it washed and It really doesn't look like its 12 years old. Trucks don't change much from model year to model year. And it's a work truck. I don't want to have to worry about the occasional scratch and with a new truck, I'd be afraid to use it for work.
*Here in Florida, most of the cabinet people either use cube vans like Calvin suggested, some with a lift, or nice trailers with a full size van. If you buy a new set-up, figure about $8000 per year in your overhead for ins., gas & oil, reserve for brakes and tires, and depreciation, somewhat less than that for a used set-up depending on it's value, but then add for periodic repairs.
*I rent a cube when I need it; no way could I justify the cost of one for my needs. A lot of small cabinet shops do that. What I plan to start doing, though, is arrange with a local moving company to pick up, wrap, and deliver the cabinets. No capital expense for me, no time spent returning and picking up a rental, and we can arrive fresh at an install, instead of tuckered out and sweaty from loading cabinets. Plus, the delivery is a fixed cost you can put into your price.
*Adrian's idea sounds great!....I was just going to post that our best cabinet man around rents a truck from a friend of his that has one for his business...He pays $50 a day plus gas....That's less $$$ than you could ever put into owning used or new...It really depends on how often you will need it, and like Ryan said, your cash flow.near the stream,aj
*Thanks everyone for your insight. I agree about the overhead. Just doesn't make sense to purchase a new truck right now. But I'm faced with my existing truck just dying! Of course, it's a third vehicle. My primary is a taurus. At this point, I think I can trade the car for a very nice truck without payment since the car is paid for. Then I could sell the Jeep and reduce my insurance costs to boot.I thought about the cube van but I need a truck for other things. And in my rural area, it's darned difficult to just find a Uhaul van! No one around has rental vans either. I did see a nice 98 dodge 1 ton 15 passenger van for $13k. It had 77k on it but very nice. Anyone have any experience with Dodge? (I'd have to keep the Jeep for the misc. truck duties...)Geez, here we go again!Thanks for all your inputs,chris
*I think I would rent, or have things delivered as this makes cost accounting very easy. Consider how many times you need the increased size of the truck, and the increased marginal cost of a delivery truck over a smaller vehicle. I would put the difference in a good mutual fund with the certain knowledge that even if the market goes down 50%, in five years, I would still have more money had I bought a larger truck. DennisP.S. I always hire by the ability of the person, not the vehicle. If the vehicle is more than 10 years old, I figure I can afford his overhead.
*Chris, I've always had Dodge Maxi vans since my first one in 1983. Terrific vans, short truning radius for such a long van, proven 310 V8, easy to work on yourself. My only problem, a minor one, was I learned to keep the side and rear door hinge pins lubed since they were prone to seize up form rusting.Plan on about 12 - 13 miles per gallon with the 318 which is what I got with selving and tools and inventory.
*My '95 GMC 3/4 ton van gets close to 17mpg with that little V 6 in it. I can't imagine a better set up for my carpentry/cabinet business. I also rent a U-Haul on delivery day. Have yet to pay over 100.00 including milage, and for the couple times a year I need it, someone else can worry about the overhead. I think vans have it all over pick ups for a cabinetry business. Your tools and materials stay dry and semi secure (of course that might not matter much, depending on your local climate) and there is way more cargo area in a full sized van than a pick-up.
*Start looking for something used before it's decision day! I sold new cars for two years, and I've never bought new and don't plan to start! Let someone else take the first depreciation hit. If you know a little about vehicles, and don't buy out of blind love you should be able to do alright. I just bought my latest van this past Dec., and am still looking for the next! Don't plan on getting out of this one for a few years, but if a good deal comes along..........just start and keep looking. Good luck, Jeff
*Chris: I spent many years in the remodeling, renovation/repair arena. I always drove a F-150. If I had my druthers I'd go for a F-250 or even a 350 van. Substitute Chevy or Dodge as your preference dictates. I think the Ford has a smaller turning radius than the Chevy but it's up to you. Either one of these should do the job you want, especially in the 3/4 ton range. I'd definately opt for a used vehicle. Sometimes you can get a fairly good deal from the program car sales from the leasing agencies such as Hertz. The expenses associated with it pretty much depend on the engine size and type. I got about 14 MPG with my truck. ( I still have it- a 1987 with 238,000 miles) As far as depreciation goes: if you use it > 50% in the business it's "listed property" and, as such, is depreciable at 5 years under MACRS( accelerated depreciation). This means you will recover more of the cost of the vehicle in the first couple of years. Non-listed property is depreciated unders ACRS which would be over 5 years at straight line; less than accelerated. Drive it until it won't run, if you sell it for more than the basis (cost less depreciation) you will have a gain on the sale that could be taxable. When it's time to retire it you might consider a donation to a qualified 501(c)(3) organization ie: The Salvation Army or =, which will wind up on your 1040 if you aren't a C- Corp. If you plan on replacing every 3 years or so you may be better off with leasing. In this case the payments, insurance oil, gas etc. are deductable. If you own, you are generally better off taking the milage ( you can take the milage expense or the actual expenses) than the expenses. 12,000 = miles a year gave me a $4,000 deduction which is a big help. There are a few things to think about. All of the costs associated with putting the truck on the road: price, tags, title, improvements such as shelves etc are included in the cost ( basis) of the truck. Good luck
*Buy that used Dodge Chris! The only problem with dodge's is that they won't die!If the hinges seize, (dodges do) you'll have to lube them up and use heat to remove them. My last dodge broke it's hinge but never fell out of the hinge so I never had to fix it.Vans are much better for keeping tools organized an dry. I drove one for twenty years, but now have an open pu. If I trimmed, I'd be driving a van.blue
*
Hello Everyone,
I'm a fledglin' startup business. I build/install kitchen cabinets. (I will expand into commercial cabinets.) We still don't have a huge amount of cashflow. But it's getting better as we get our name out there. I have been delivering cabinets on an open trailer towed by my 80 Jeep J10 truck that's about shot. I've got my eye on a nice cargo trailer, 8x14 tandem axle. But my J10 just ain't gonna cut it much longer. I'd like to purchase a 3/4 ton truck but geez, $24k - 34k !!!
Question: Anyone care to give me an idea of what you are using now? How did you approach the overhead cost? What did you use when you were starting out? I faced with putting more into the jeep than it's worth and that's not good business sense. Plus, it isn't very good looking and that makes an impression on potential customers even though it has no bearing on my work! (I feel many people associate what you drive (how NICE)with your level of success (read competence)).
I look forward to this discussion!
Chris