Debt Free and Growing Slowly or In Debt and Aggressively Expanding?

**John Scott** · 09-17-2006, 05:43 AM

I wonder what you guys think about taking on debt to grow faster? Right now we're debt free and growing at a fair pace. But I have an urge to grow really fast, but it would involve taking out a loan for several hundred thousand dollars.

Opinions?

Grumps · 09-17-2006, 07:18 AM

Thats all depended by the odds of return. If there is a big risk in this, there is no point risking into debt where there might be a chance to lose everything u ever earned. Dont try to get into that unless you have that lil confident in you

RedruM* · 09-17-2006, 07:20 AM

more detail.

John I see this as a long term project. Advertise on some other forums

make a new skin.

BingoBalls · 09-17-2006, 07:43 AM

As my mother always said "walk dont run or you'll end up flat in your face" which is something I live by. I dont have credit cards and I dont buy anything that I cant pay for, even if its to expand what I am doing.

As you know debt can lead to so many problems and its a huge gamble to go into debt for business purposes.

I would say dont do it.

**John Scott** · 09-17-2006, 07:46 AM

I could always save up for a year and do it without going into debt. I guess...

RedruM* · 09-17-2006, 07:49 AM

John what are your plans?

**John Scott** · 09-17-2006, 07:51 AM

Not going to let the cat out of the bag, but it's something that would grow the company by leaps and bounds.

RedruM* · 09-17-2006, 07:54 AM

we can't make a informed opinion without more info..

BingoBalls · 09-17-2006, 08:15 AM

Quote:

Originally Posted by John Scott

I could always save up for a year and do it without going into debt. I guess...

That is approach that I would personally take but as business goes a year away is a long time to wait.

jezza chan · 09-17-2006, 08:22 AM

I think i know what you're thinking john, lol.

could you be considering these:

1. Paying for Tv ads for v7n?
2. Starting a major advertising campaign?
3. Establishing a marketing company?

I'd thought i'd take a few guesses.

Goodluck John.

designer007 · 09-18-2006, 05:44 AM

I don't think its a better idea.

"Slow and steady wins the race"

RedruM* · 09-18-2006, 06:32 AM

no , not always

Aviva · 09-18-2006, 07:15 AM

I'll be a bit of a contrarian ---

A lot really depends on your plans. But generally, if you've got a good idea, you should be able to earn a higher rate of return on your money than you're paying in interest. Certainly, for most successful internet ventures that's true.

It really boils down to cash flow: you've got to make sure that regardless of what happens on your internet venture, you have sufficient cash flow to service your debt. Otherwise, you may find the financial institution ruining your plans :-) If you have the cash flow, go for the loan.

There's also a risk tolerance factor. A lot of people can't sleep comfortably knowing they owe a lot of money.

Also, there's a timeliness factor. A year on the internet is a long time. If you wait a year to get started, your ship may have sailed or someone else may have grabbed the opportunity.

In short, crunch the numbers and if the cash flow is there and the business idea is solid, go for it full steam ahead.

**GuyFromChicago** · 09-18-2006, 08:21 AM

I hate debt and avoid it at all costs.

yea, growth can be slower if you're staying debt free but you'll sleep beter at night and I believe being debt free keeps your options open as things change.

daboss · 09-18-2006, 08:21 AM

i don't think there's a clear-cut answer - i.e. no right or wrong...

but personally, i'd go the safe route...

too many commitments to be able to take big risks...

**Cricket** · 09-18-2006, 08:31 AM

Never risk more than you can afford to lose.

imaginemn · 09-18-2006, 08:53 AM

Big Companies = Big Risks.

Having the money is one thing. Having the resources to support it, is another. I would make sure that your plan includes adding whatever resource is needed to support the new business/growth. If you grow to quick and can't support it. You'll fall just as quick.

The only way to grow rapidly is through risk taking and acquisitions. Be smart, don't just take a risk for the sake of risking. If you have a good business plan (which you know you will need to borrow that type of money), I'd go for it.

**ToddW** · 09-18-2006, 04:12 PM

Quote:

Originally Posted by RedruM*

more detail.

John I see this as a long term project. Advertise on some other forums

make a new skin.

You don't even know what he's talking about doing how can you give advice on "what to do" to grow... lol

**ToddW** · 09-18-2006, 04:13 PM

Quote:

Originally Posted by Aviva

I'll be a bit of a contrarian ---

A lot really depends on your plans. But generally, if you've got a good idea, you should be able to earn a higher rate of return on your money than you're paying in interest. Certainly, for most successful internet ventures that's true.

It really boils down to cash flow: you've got to make sure that regardless of what happens on your internet venture, you have sufficient cash flow to service your debt. Otherwise, you may find the financial institution ruining your plans :-) If you have the cash flow, go for the loan.

There's also a risk tolerance factor. A lot of people can't sleep comfortably knowing they owe a lot of money.

Also, there's a timeliness factor. A year on the internet is a long time. If you wait a year to get started, your ship may have sailed or someone else may have grabbed the opportunity.

In short, crunch the numbers and if the cash flow is there and the business idea is solid, go for it full steam ahead.

Best advice and on the same lines of what I was going to say.

Weigh the ROI based on doing it now or in a year and time to earn back what you have barrowed.

More info and i`ll give more advice lol

**John Scott** · 09-19-2006, 01:38 AM

Quote:

A lot really depends on your plans. But generally, if you've got a good idea, you should be able to earn a higher rate of return on your money than you're paying in interest.

Definitely true, but the Internet marketplace is so dynamic that one good idea today may be tomorrow's Dumb Idea Award Winner. ...