How Much Debt Is Enough? Too Much?
How much debt is too much? Should you ever be debt free? What are some good guidelines for how much a business should be leveraged?
Over the years and after working with many different print shops, I have come up with what I believe are some good guidelines.
First, let me point out that I am expressing these guidelines or ratios as a percentage of sales. Further, I am defining these costs as debt/loan payments the business must service. This would include any loan payments to lending institutions and/or any lease payments. This does not reflect any depreciation since it is not a cash expense.
Carl and his wife, Judy, owned and operated their own successful Allegra franchise for nearly 20 years before selling the $2.3 million operation in 2003. He is a PrintImage International/NAQP Honorary Lifetime Member and was inducted into NAPL’s prestigious Soderstrom Society in 2010 in recognition of his contribution to the industry.