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View Full Version : How long for a mower to pay for itself?


Richard Martin
12-14-2001, 05:35 PM
How long does a mower take to pay for itself?

This is a good question. A buddy of mine said that the Exmark Lazer Z that he bought this year had already paid for itself but I disputed his claim. I based my dispute on my own experience this year.

I bought a Dixie Chopper 60" mower this year. As I reported in another thread this mower saved me 168 hours over the previous year's equiptment. If I multiply 168 by $40.00 (my average per hour) I get $6720. Is this how you compute equiptment paying for itself or are there some other factors I'm not taking into account?

Richard Martin a.k.a. Crabgrassman

General Grounds
12-14-2001, 05:55 PM
:blob3: Rich i quess that works well, or how about lets say you cut ever lawn with that machine only, so lets assume for argument sake you have 40 lawns at $45. a cut, That's $1800 a week, we have a 32 week cut year here, so that $57,600 for the year i quess you paid for your mower. thus assuming this is a 1 man opp, with little over head, even if you say 2/3 is overhead that still leaves you with $19,200. Tony

eslawns
12-14-2001, 06:53 PM
IMO, you're looking at this backwards. You do your best to determine the life expectancy (in hours) of the machine. Add in the fuel, maintenance and repair costs. Divide that figure by the number of hours and that's how long it takes to pay for it, however long that is. Accumulating gross income will vary so much it's basically meaningless. Not only would it be different for each person on this board, it would be affected by the weather and the time of year it was purchased.

Richard Martin
12-14-2001, 07:24 PM
eslawns wrote:
...........................
You do your best to determine the life expectancy (in hours) of the machine. Add in the fuel, maintenance and repair costs. Divide that figure by the number of hours and that's how long it takes to pay for it, however long that is.
...........................

I expect my DC to last 4,000 hours.

I will assume you meant to say "Add the cost of the machine to the expected expenses associated with the machine" for a total of around $14,000 and divide that by the number of hours the machine is expected to last? This would leave me with a total of 3.5 hours for the machine to pay for itself.

You've apparently lost me completely. Please splain better.

Mark
12-14-2001, 10:25 PM
Richard i purchased a new Z-Master in 2000, Paid Cash. But this yr i figured it took me around 2-months to get that money back into the same accout it came out of. That includes all expences, That was 288hrs at 40 dollars per hr. Marks Mowing Service

eslawns
12-14-2001, 11:20 PM
Richard,

The point I was trying to make is that it's not that important how fast you can pay for it, but what it costs to run it. Using the numbers you have it's $3.50 per hour. I should know better than to type when I'm sleepy.

How fast you can pay for it depends on many things. If you were making $275 a day before you got the mower and $350 a day after you are now grossing $75 more a day. How many days do you work before the difference pays for the machine? 187. This assumes (always dangerous) that everything stays constant. The thing to keep in mind is that you can't really tell the future, so you just take the info you have and make your best good guess.

I'd rather know what it costs per hour to run each machine. In other words how much of the machine's useful life does each job use up? Also, you'll know whether the machine was a good investment or just a cool toy.

scottt
12-15-2001, 12:00 AM
I think what he meant to say was divide $14,000 by expected hours(4,000) and what you get is how much it costs you to run the machine per hour. So your 3.5 number is what it cost to run per hour, not how many hours it takes to pay for itself.

Richard Martin
12-15-2001, 03:10 AM
So let's do this. We take either:

the time saved multiplied by the dollars per hour you gross and then subtract the costs as per the formula we devised for figuring costs. It would look like this:

168 hours X $40.00 = $6720
minus
268 hours X $3.50 = $ 938 Cost to operate the machine
equals <br>$5782 Amount of money this machine paid for itself this year

or

the additional money earned in the same number of working hours and then subtract the costs as per the formula we devised for figuring costs. It would look like this:

$75.00 X 125 working days = $9375
minus
268 hours X $3.50 = $ 938
equals <br>$8437 Amount of money this machine paid for itself this year

Hmm....
:confused:

turfman59
12-15-2001, 03:19 PM
You really did a good job by purchasing a productive piece of equipment. Your pay back was faster than you calculated because of actual residual value of the mower.
with those kind of labor saving it seems a small raise in wages is owed you or one of the employees. gotta reap benefits now and then.

Bunton Guy
12-15-2001, 06:15 PM
The real truth is it takes just as long as the loan term duh.... How could you ever figure it any other way...yeah you saved time...time dosent pay you extra money only the customer does. Yeah you might be able to pay your workers less hours but that is gonna make them pissed. If you have extra time the only way to make that mower pay for its self is to do a GREAT ! sales job and get yourself some new acounts. Having a quick mower isnt going to get you those acounts being a good sales person IS ! so were do you figure in how quick it payes for itself then ? When my cousin got his first ZTR he saved himself many many hours but never picked up a new customer it took him the full 36 month term to pay it off because he made no extra money to make double payments. So if he DID do some sales work in the field he would have gotten more acounts which equals more money...got my point ? GOOD !:angel:

eslawns
12-15-2001, 10:43 PM
The real truth is it takes just as long as the loan term duh.... How could you ever figure it any other way

Really? And if he got it one the 1 payment finance plan like I did, it paid for itself that day? I don't think so.

...So if he DID do some sales work in the field he would have gotten more acounts which equals more money...got my point ? GOOD !

Yes, but he wasn't asking how look it took to pay for a mower, he asked how long it took for the machine to pay fir itself. Meaning, be a benefit to its owner by producing a return on his investment.

Richard Martin has the idea I was getting at, but you would need to plug in your own numbers. This is why it's important to keep track of all this stuff, otherwise, you might as well use a dartboard to get your numbers.

No Sweat L/C
12-15-2001, 11:36 PM
What I found out when I went from using a 36"mower w/sulky to a 52" hydro mower w/sulky I could do 2 more yards a day.
So I figured out that I could do 8 more yards a week and work about the same number of hours. My mower payment was less than what 2 yards paid monthly. So I was 6 yards to the plus side by using this mower. Also since it used less gas than my 36" and needed less repairs than a my 6yr old mower. The best part was after the mower was paid off. I still had a mower that ran great and has not needed any major repairs for over another 2yrs. I feel it's been a great return on my investment.
I don't think it can be done in a season.

Richard Martin
12-16-2001, 02:14 AM
Bunton Guy wrote:
..........................
yeah you saved time...time dosent pay you extra money only the customer does. Yeah you might be able to pay your workers less hours but that is gonna make them pissed. If you have extra time the only way to make that mower pay for its self is to do a GREAT ! sales job and get yourself some new acounts. Having a quick mower isnt going to get you those acounts being a good sales person IS !
..........................

Actually I left out some details. I did this just so I could try and arrive at some sort of basic formula for figuring the amount of time it takes for a machine to pay for itself.

But if you want to muddy the waters let me add a couple of extra figures.

Last year I had a Friday only cash helper. $75.00 a day. This year I didn't use a helper on Friday.

During my busy months (M,J,J,A,S & O) my income increased over 10%.

So yes, I am doing more work in less time. But I am trying to only add quality work that will take advantage of my new mower. I could have easily added a bunch of pissy little accounts that take more time to trim than to mow but that is wasting my resources. I also only like to add accounts that are going to be with me over the long haul.

Grass_Slayer
12-16-2001, 07:09 PM
i just go with how much total i made over the year. if it is more than what the mower cost than it has paid for itself. i know u have to paay for gas and blades and for employees but if there was no overhead then the mower has technically paid for itself.