Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

QUICKLY Recover Your Startup Cost by Doing This...

9 Nov 2022 · 1 min

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Mike Andes explains that the primary KPI to track is how quickly you recover startup capital used to launch a business. He argues that using leverage (business loans) can greatly improve this KPI by reducing upfront capital required, enabling faster recoupment and the ability to open multiple locations. He gives numeric examples: 20% down is common, so $5,000 down leverages $50,000; smaller down payments (e.g., $10,000 vs $50,000) can allow starting multiple locations.

Questions this video answers

20%

$50,000

$10,000 down instead of $50,000

Chapters

So the first KPI that I want you to track is how quickly you can recover the cost of startup. That startup capital goes into business to get it off the ground. How quickly can you retrieve and get that money back? Leverage allows you to improve this KPI a lot. This KPI can be massively improved by getting debt out because you can recoup the cost of capital and the cash that is required to get started. And here's the thing, when you're really trying to scale up, if I can go start five locations because I only have to put $10,000 down instead of $50,000 and I use leverage on the other of the deal, I could literally go get started five locations or five businesses instead of one simply by making sure that I am taking a loan and get to using leverage in the business. Now, 20% down is pretty standard for a lot of business loans, which means for $5,000 down, I get $50,000 worth of leverage. And again, I'm going to have my monthly payment. But I'll be able to improve this KPI, this performance indicator of how quickly I can recoup the capital that it takes to invest and get the business off the ground.