Post by Kevin on Feb 21, 2008 8:31:49 GMT -5
Talked to so many new members in the last week, they should be calling their business Credit`s Cleaning Service one of the first questions I ask.. How are you financing your start-up, the most common response I get is "putting everything on the credit card."
I`ll tell you .. what I tell them... Fine and dandy if you pay it off every month. If not, your doomed. Guys like myself and other business owners who have gotten past that start-up phase, that have some cash set aside are going to wipe the floors with you.
If your financing your equipment, payroll and supplies, you now have an interest charge and we do not. Your bid has to cover those interest charges depending on your credit card it could be 4 to 20% or higher with fees. You have to increase your bids by that percentage to maintain a profit. If you don`t add this in, that percentage is coming out of your profit and slowly will eat away all your profit.
In more of a layman's term: Your bid has to be higher than my bid, because you have interest charges. You being newer have to bid more and have to compete against a more seasoned company that is bidding lower. To all service owners that are using a credit line to finance their business. If your not paying that balance off monthly, you better remedy the problem fast.
If not, save enough balance on that credit card to print up some resumes, and some gas money when your job hunting looking to start your new career.
I`ll tell you .. what I tell them... Fine and dandy if you pay it off every month. If not, your doomed. Guys like myself and other business owners who have gotten past that start-up phase, that have some cash set aside are going to wipe the floors with you.
If your financing your equipment, payroll and supplies, you now have an interest charge and we do not. Your bid has to cover those interest charges depending on your credit card it could be 4 to 20% or higher with fees. You have to increase your bids by that percentage to maintain a profit. If you don`t add this in, that percentage is coming out of your profit and slowly will eat away all your profit.
In more of a layman's term: Your bid has to be higher than my bid, because you have interest charges. You being newer have to bid more and have to compete against a more seasoned company that is bidding lower. To all service owners that are using a credit line to finance their business. If your not paying that balance off monthly, you better remedy the problem fast.
If not, save enough balance on that credit card to print up some resumes, and some gas money when your job hunting looking to start your new career.