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Author Topic: The age old connundrum of what vehicle to buy.  (Read 6708 times)

Scott Holtzman

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  • Ghost AV - Avon Lake, OH
    • Ghost Audio Visual Systems, LLC
Re: The age old connundrum of what vehicle to buy.
« Reply #40 on: July 17, 2017, 04:34:05 pm »

This is a great point, and not taken lightly. I am also pondering my future vehicle algorithm.
I remember thinking in 1999, when I bought my first large format console, that the company selling it had to have some kind of great selling system. Everything they had was for sale. So obviously they were depreciating at a constant rate, and just updating the cost of things continually.

With vehicles, it has always been, run them into the ground, and then get another one. It seems that I need to have a clearer plan, now that the stakes are going up. To run them until a certain date, or mileage, and upgrade from there, while I still have equity. Perhaps have a certain amount of money set aside per year, and have this added to the equity to trade up.

You are exactly right.  You can defer cash flow but you can't defer the true cost.  The money is being spent.  Eroding equity is just another way of trading future value for present opportunity.

This is why keeping books and managing your business by the P&L is much wiser than the bank balance.  Makes it much harder to lie to yourself.  Keeping positive cash flow is much easier than generating a true profit.  If you can have an honest 10% on the bottom line, respecting the B in EBITDA you are doing well. 
Scott AKA "Skyking" Holtzman
River Delta Audio is now:

Ghost Audio Visual Solutions, LLC
Cleveland OH
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