TCF398: Contractor Q&A : When is Debt "Good Debt"?

From The Contractor Fight with Tom Reber Tom Reber

Listen in as Tom and Dan answer your questions about how to communicate with customers during a long wait and whether there’s such a thing as “good debt”.

In this episode, we talk about…

Question 1: "Exclusively because of the Shin-Fu, we have clients with large renovation projects with deposits paid stacked up until February 2022. What additional word tracks can I use for clients who have the money, but are discouraged by such a long wait?"
- Mind the Gap: Fill the waiting period with relevant content to build trust and stoke their excitement
- Mindset: Remember they have to wait on other contractors, too
- Communication: Be real and keep them in the loop
Question 2: "What is your take on good debt and how much of it should I rely on for the success of my business? What are some good examples and areas where good debt makes the most sense?"
- The reason Tom believes most debt is not good for contractors
- Good debt: increases your net worth, helps generate more value, allows you to manage your business in a more profitable way
- Bad debt: doesn’t increase your wealth, isn’t used to purchase materials and holds you back
- Never use debt to compensate for lack of revenue in your business