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View Full Version : How much do you allott in your rates for equipment costs?


zman2307
06-09-2009, 12:12 AM
Do you charge a certain percentage of your revenue for this? There's so many mowers at so many price points, with varying productivity.....I'm trying to figure out the best way to figure out how long it takes a mower, for instance, to pay for itself.

zman2307
06-09-2009, 12:55 AM
*not charge, but allott a certain percentage.

hackitdown
06-09-2009, 07:44 AM
I always figure $10 per hour for equipment and gas. I think it is lower than that.

ALC-GregH
06-09-2009, 10:52 AM
You have to use the expected life of the equipment.

zman2307
06-10-2009, 10:33 AM
I've heard some LCOs allott 10% of gross revenue, which for a lot of contractors I know is in the neighborhood of $100,000-120,000, so 10% is 10,000-12,000. Granted this includes maintenance on the equipment as well as any payments, etc. Fuel is calculated separately. A diesel or other large frame Z would sure pay for itself quickly at this rate with the right accounts!
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topsites
06-10-2009, 11:36 AM
It varies from one piece of equipment to the next, in terms of not just replacement cost but in my case maintenance
parts and labor and operational costs as well, this in turn does affect the hourly labor rate, in my case per machine.
Thus, I charge a different hourly rate depending on what I am going to use.

There's low and high maintenance pieces, a shovel is very low, a stump grinder very high, the rest seem to fall in between,
then as was mentioned there's the life expectancy which affects the time it takes to figure out the replacement cost, however...
In terms of life expectancy that will vary from one operator to the next, a few guys replace everything every year while others
never buy another, once again the rest fall in between but how many years a piece of equipment lasts, how can I tell you?

For example...
Some folks get 1-3-4 years out of a trimmer, for others it lasts forever, how long will it last you, I don't know.
When it craps out, how long it takes to figure out the problem, do you fix it yourself, drop it at the dealer or just buy another?
Parts also, do you keep a back stock or do you order as needed, do you mail order or buy at the dealer?

All of this affects the cost, I don't think my figures would be accurate for someone else's business model.
It helps perhaps to track these costs, the time, the money, all of that, and I believe the actual answer
to this question would then reveal itself to you over time.

Peace out

jkilov
06-10-2009, 06:46 PM
I always figure $10 per hour for equipment and gas. I think it is lower than that.
That's pretty much it. For a ZTR hour anyway.