I am paying off all my credit card bills (again).
towncars.com will be relatively debt free. I would part with some equity, even if it is disproportionate to me, as opposed to being held up by covenants and restrictions.
when i started my cab business, i could not rub 2 nickels together. Hard work, or sweat equity is what the entrepreneurial spirit is driven by, not smiling a $100,000 smile and leveraging yourself to death.
I have a friend with 15 stretches and 7-8 towncars.
all 96,97 models. average them @ 55k each. call it 20 cars...
$1,100,000...leveraged.. He must be paying 10-15% we'll call it 15% and forget the theft, and fire coverage of an extra $1k per car per year...
$165k in debt svc, plus hi rent, and digital nextel svc, then the 2% CC merchant service costs.
He has a tremendous business, but that is due to 25 hr svc, not the leveraged debt. he has a partner, whether he realizes it or not.
i would say $15k a month or better for the cc% and debt svc.
so when he runs the cars to death, he only re-ups and continues the partnership.
I explained to him that the cars he will be keeping, towncars.. not stretches, are going to require a more rigorous maintenance schedule in 3-4 years, he is better off buying a few 93 and 94 model years,(i can get him clean privately owned out of state cars) and he can buy them for 1/5 the price of new, and therefore reduce his debt service and trade the cars in next year- 18 months, let's say an $8- 10k car turns into $6-$8 k.. he saves tons.
taxi
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