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tacoma200
06-13-2009, 11:11 PM
A few years back I read an article in the Walker magazine and a LCO with a large fleet of ZTR's had meticulously calculated the cost of running a ZTR. I posted a thread and ask Lawnsite members what they thought the cost of running a ZTR per hour was and got a mix of answers which I believe most were too low due to leaving out overlooked expenses. So I would like to hear from those that have done some research into the true cost of running a ZTR, a fleet owner, or someone with a business degree would probably impress me more than someone guessing or that hadn't done their research. This guy in the Walker magazine was from Maine and I think he really had his act together but I can't remember since it was so long ago. If you would be kind enough to tell us what figures you have come up with and how you came up with the figures I would be all ears. Tell us if you include labor, fuel, equipment, maintenance, down time, insurance, etc or what ever you think is relevant. I know many factors can vary as well as fuel prices. I believe the Walker guy came up with $10-12 dollars (before labor) per hour but I'm not sure, lost the article. Fuel alone should . Fuel alone could account for $3 to $5 per hour at this time (guess). I look forward to hearing from those more business savvy than the average guy. I could be way off so my apologies ahead of time.:)

Keith
06-13-2009, 11:38 PM
I've have told several people over the past couple of years that the cost is $12-14 an hour. Sure, it will be cheaper for some, but I bet that number is close for a lot of companies.

$10,000 mower, financed, that might last 2000 hours without major problems. Figure $6 an hour for that.

Fuel, $2.50-$4.50 depending on the week.

Normal maintenance if you do it yourself, tires, belts, blades, oil, filters. I figure that costs a buck an hour or more.

Maintenance for stuff like spindles, pulleys, clutches, bearings, seats, you name it. That's got to be a minimum of $1 an hour.

That doesn't even touch on insurance, the cost of running around trying to find that belt the day it fails, or anything like that.

lifetree
06-13-2009, 11:46 PM
... $10,000 mower, financed, that might last 2000 hours without major problems. Figure $6 an hour for that. ...

Not sure how you arrive at $ 6.00 per hour because $ 10,000 / 2,000 hours = $ 5.00 per hour !! The interest associated with financing the machine are not "operational cost", per se ... business expense sure, but not depreciation on the machine.

topsites
06-13-2009, 11:50 PM
For myself it's at least double the cost of running the Wb.

Here, I'll expand based on this answer:

I've have told several people over the past couple of years that the cost is $12-14 an hour. Sure, it will be cheaper for some, but I bet that number is close for a lot of companies.

I would agree, that is close.

$10,000 mower, financed, that might last 2000 hours without major problems. Figure $6 an hour for that.

I'll be lucky if I get a thousand hours out of mine in a lifetime.
Unlike a lot of Lco's I don't run the Ztr unless the cost can be justified, and...
Unfortunately, I don't see how I can justify running that big bad beast on a small lot where it saves me 2 minutes cutting.
It has to cut out 15-20 minutes at the very least or it's just not worth even loading it,
don't forget that beast eats up trailer space AND...

Fuel, $2.50-$4.50 depending on the week.

Mine guzzles 2 gallons an hour, and decreases the truck's fuel mileage noticeably as well.

Normal maintenance if you do it yourself, tires, belts, blades, oil, filters. I figure that costs a buck an hour or more.

At least, maybe other guys have better luck but in 155 hours I have bent 4 blades and destroyed a spindle.
That's on top of regular stuff, two oil and filter changes, two spark plugs, the hydraulic fluid and filter, and at least one belt.

Maintenance for stuff like spindles, pulleys, clutches, bearings, seats, you name it. That's got to be a minimum of $1 an hour.

Yes, at least.

That doesn't even touch on insurance, the cost of running around trying to find that belt the day it fails, or anything like that.

The insurance is all the same either how and I keep belts in stock,
but I do agree you need to keep a margin for unexpected expenses.

djagusch
06-13-2009, 11:56 PM
I use $16 for a Zero Turn. Some think this is high but I rather figure on that side than low. It's based off a $12K mower, $5/gal gas, 2,000 hrs oil changes every 50hrs, 2 tubes of grease every 50hr, a set of blades lasting 50 hrs, 1 set tires, and a major repair out of warranty (and some more but don't remember it all).

Keith
06-14-2009, 12:09 AM
Not sure how you arrive at $ 6.00 per hour because $ 10,000 / 2,000 hours = $ 5.00 per hour !! The interest associated with financing the machine are not "operational cost", per se ... business expense sure, but not depreciation on the machine.

Rough figure. Most people finance mowers that cost this much. And 8-12% was a fairly normal rate for a long time, and still is for many people. I figured in interest because if you made $12k in payments, it's like paying $6 an hour if the thing last 2000 hours.

puppypaws
06-14-2009, 12:28 AM
I use $16 for a Zero Turn. Some think this is high but I rather figure on that side than low. It's based off a $12K mower, $5/gal gas, 2,000 hrs oil changes every 50hrs, 2 tubes of grease every 50hr, a set of blades lasting 50 hrs, 1 set tires, and a major repair out of warranty (and some more but don't remember it all).

I don't think you are far off, my dealer told me once if he was trading he used $10.00 per hr. depreciation up to 500 hrs. and gradually came down as the hours went up. That is a dealer, I feel it would be less selling straight to another individual.

FastMan
06-14-2009, 12:51 AM
To do a lawn job you use a mixture of equipment. As an example; say you try to get $65 dollars an hour for your time when doing mowing jobs. The amount you're charging for the trim and blow time is actually under that $65/hr, because your equipment cost is less, and the ZTR is over the $65/hr. So let's say for this example the ZTR is at $70/hr. What's your general labor charge? Subtract it from the $70 and you have the amount you're charging per hr for the use of your ZTR. Plug in your own numbers, and I bet most are over $16

kaferhaus
06-14-2009, 01:15 AM
If you're only getting 2,000hrs out of ZTR you're buying the wrong brand. we're averaging just over 3,000hrs on engines alone. Spindles last 2yrs or longer, same with clutches. Blades are lasting 80+ hours.

I pay under 9K for new 61" ZTRs and pay cash. And no one has figured in the tax deductions. The mower and every penny you spend on it is sans income tax at the end of the year. Same with your truck, gasoline etc.

We have several ZTRs with over 5 thousand hours on them. A engine change out is less than 20% of the mower's replacement cost.

Our maintenance/operating costs are exactly 4.74 per hour including fuel for the 42" mowers and 5.92 for the 61" mowers. Replacement cost is figured at 1.35 per on the 61s and 1 buck an hour for the 42s.

This is all with "pre tax income" (those that aren't paying taxes.... oh well)

My payroll averages out at about 10 an hour so you can deduce that it "costs" about $17 per hour with labor. Now add the truck, trailer, office, advertizing, insurance, FICA etc.... and yet guys here post that they're charging 35-40 and hour and making money.... chump change maybe, but no real money.

TomberLawn
06-14-2009, 01:21 AM
Not sure how you arrive at $ 6.00 per hour because $ 10,000 / 2,000 hours = $ 5.00 per hour !! The interest associated with financing the machine are not "operational cost", per se ... business expense sure, but not depreciation on the machine.

Interest is an expense, nonetheless, and should be included when calculating the cost of owning/operating a piece of equipment.

I've figured the cost per hour to run my Woods is $8-9, depending on fuel usage and prices. Sounds kind of low, but I got a great deal on it and with the industrial grade Generac, it should last a really long time.

If you finance a mower, a good thing to do is include a replacement cost recovery per hour. This will allow you to pay cash for your next mower, saving hundreds of dollars in interest. For instance, if your current depreciation and interest expense is $5/hr, calculate $9 or so and save the extra $4. After 2000 hours, you've got $8000 + interest to apply towards a new machine. Then, since you paid cash for it, the regular depreciation expense should cover the cost of the next machine.

milkie62
06-14-2009, 02:31 AM
I have a 3100 Ferris and wanted to change the hydralic filter and oil at 100hrs.I called the factory to get a clarification on the oil and they told me NOT to touch it for 400hrs.They said too many guys change fluid and such and introduce air into the system and ruin wheel motors by not purging the air.Being the system is sealed and they are using synthetic oil I would be wasting my money wanting to change it so soon.Well OK I am warranteed until next April and will have close to 300 hrs by then.I do not see how you can be using 2 tubes of grease every 50 hrs.A couple of squirts per zerk should be all that is needed.A gob coming out of a bushing area is a waste and if a spindle is sealed very little should ever leak out.I also think that 2000 hrs is pretty low for a machine unless you are beating the hell out of it.

tacoma200
06-14-2009, 03:34 AM
Don't know if this old article from an Exmark brochure helps or not?

Richard Martin
06-14-2009, 05:51 AM
I have no doubt that a lot of people do "think" it costs them $16 - $20 an hour and it probably does. Does it have to? No. If you're only running a mower for 2,000 hours and then retiring it then something is wrong. More than likely there is nothing wrong with that mower. It could easily go much further. To at the very least 3,000 and often 4,000 and beyond.

Do you think that someone that paid $500,000 for a piece of heavy equipment retires it when it only hits half of it's expected lifespan? Or changes the oil and filters at 1/2 half of the recommended intervals? No, I don't think so. Even if you sell your old equipement instead of retiring it are you including the recovery in your calculations?

puppypaws
06-14-2009, 03:10 PM
I have a 3100 Ferris and wanted to change the hydralic filter and oil at 100hrs.I called the factory to get a clarification on the oil and they told me NOT to touch it for 400hrs.They said too many guys change fluid and such and introduce air into the system and ruin wheel motors by not purging the air.Being the system is sealed and they are using synthetic oil I would be wasting my money wanting to change it so soon.Well OK I am warranteed until next April and will have close to 300 hrs by then.I do not see how you can be using 2 tubes of grease every 50 hrs.A couple of squirts per zerk should be all that is needed.A gob coming out of a bushing area is a waste and if a spindle is sealed very little should ever leak out.I also think that 2000 hrs is pretty low for a machine unless you are beating the hell out of it.

He did not really mean he was using 2 tubes of grease on one mower every 50 hrs. He was thinking about something else when he typed that statement. One tube of grease will more than likely last 1 year on a Hustler Super Z fittings, even if putting 500 hrs. on the mower in a year, a couple of shots in each fitting with very few fittings last a long time. I use a specialized formula of Schaeffer grease which holds in place longer and requires only half the amount of actual greasing.

djagusch
06-14-2009, 07:22 PM
In my opinion 2000 hrs is about when it is still a great back up mower but much further it becomes less reliable. It's all a difference of opinions of when something is to old. In the south 2000 hrs could be a 2 or 3 year old mower up here in MN it's a 4 to 5 year mower depending one the size of properties you maintain.

In five years equipment changes and the newer stuff is more productive than the old stuff (speed's and HP) so running the old stuff may save money on equipment but if the new stuff makes you or a crew 5% more efficient you can save even more on labor costs.

And in 50hrs with a Scag you will use a bit more than a tube of grease if you hit the front wheels/spindles weekly and the rest at the oil change. It's a little overkill but doing this I have not lost a front wheel bearing or spindle yet.

lifetree
06-15-2009, 10:44 PM
... We have several ZTRs with over 5 thousand hours on them. ...

What ZTR brands do you run ??

kaferhaus
06-16-2009, 12:27 AM
What ZTR brands do you run ??

Bobcat's and Exmarks. Soon to be all Bobcat's

kaferhaus
06-16-2009, 12:36 AM
Don't know if this old article from an Exmark brochure helps or not?

Always be skeptical of "facts" presented by someone trying to sell you something.

However, I'd have to say that pie chart is very close to my actual experience execpt our equipment and maintenance costs are lower by several percent and labor.... they have to be kidding.... ours runs about 60% They must be showing everyone making minimum wage.

AND they leave out enough things to make your head spin

lifetree
06-18-2009, 10:40 PM
Bobcat's and Exmarks. Soon to be all Bobcat's

CONGRATULATIONS ... I've heard of ZTR's going for somewhere between 3,000 to 4,000 hours, but this is the first time I've heard of anything over 5,000 hours !! You must take exceptional care of your equipment ... what engines do you have on them ? Have you had any major repairs on any of them ?

Since you're going to all Bobcat's you must apparently feel like that is a much better machine ... contrary to alot of the popular opinion on here about Exmark ... but I have to say that I have a personal preference for something other than Exmark.

lifetree
06-18-2009, 10:42 PM
Always be skeptical of "facts" presented by someone trying to sell you something. ...

Absolutely be skeptical of something like that !!

tacoma200
06-18-2009, 10:43 PM
Several Grasshoppers here with over 5,000. Diesel of course. MJB has well over 3,000 hrs on an Exmark still going strong.

lifetree
06-18-2009, 11:11 PM
... I've heard of ZTR's going for somewhere between 3,000 to 4,000 hours, but this is the first time I've heard of anything over 5,000 hours !! ...

Several Grasshoppers here with over 5,000. Diesel of course. ...

My apology for not clarifying, I'm aware that diesel engines can go up to 10,000 hours ... it's gasoline engines that I'm referring to !!

Richard Martin
06-19-2009, 04:14 AM
CONGRATULATIONS ... I've heard of ZTR's going for somewhere between 3,000 to 4,000 hours, but this is the first time I've heard of anything over 5,000 hours !! You must take exceptional care of your equipment ... what engines do you have on them ? Have you had any major repairs on any of them ?

There's a couple of members here that get over 4,000 hours on a regular basis. A member that's no longer with us, Eric "Elm" Erickson used to get over 5,000 hours out of his gas powered Dixie Choppers on a regular basis. He's the reason I own a Dixie today.

hackitdown
06-19-2009, 02:51 PM
I think people are way off if they say over $10/hr equipment costs on a ZTR. Even if you only trust your ZTR to be reliable up to 2000 hours, it is still worth money. So if you buy it for $8000, and sell it at 2000 hrs for $2500 you spent $5500 for 2000 hrs. That works out to $2.75 per hour.

I use less than 1 gallon per hr. so that is another $2.50 hr

My 52" Lazer HP has 1000 hrs, so I have done the following:
About 20 oil changes...maybe $200. 10 Tubes of grease $30? 2 tires...$200. 3 sets of blades...$100. Belts...maybe $150. Repairs (Throttle cable, Ignition Coil, misc)...$300

So about $1000, or $1 per hour on repairs and maintenance.

So all together it adds up to $6.25 per hr (running time). Now repairs may go way up over the next 1,000 hrs, but who knows. And gas was $2 per hour higher last year. And I may not get $2500 when I sell it. But I think my numbers are realistic.

gobbles2700
06-19-2009, 03:03 PM
I have a spread sheet modeled after the ones Jim Houston uses in his books and magazine articles. It breaks down into three parts aquisition cost, maintainence cost, and fuel cost. My Deere 797 cost me $14.66 /hr last time I updated it for fuel 2 weeks ago. This accounts for everything I've thought of thus far including property taxes but there is no profit or return on investment in that number.

Tim

Richard Martin
06-19-2009, 03:44 PM
I think people are way off if they say over $10/hr equipment costs on a ZTR. Even if you only trust your ZTR to be reliable up to 2000 hours, it is still worth money. So if you buy it for $8000, and sell it at 2000 hrs for $2500 you spent $5500 for 2000 hrs. That works out to $2.75 per hour.

This is eactly what I'm talking about. I only paid $4500 for my Dixie with 29 hours on it. I expect it to go to at least 4,000 hours. I get over 1,000 hours out of my belts. Plugs last 500 hours. I've put one air filter in it so far. I change hydro oil and filters (2) at 500 hours each time. Oil is changed at 100 hours and oil filter at 200 hours (as per the Kohler manual). Bypass filter every 500 hours. I burn gas at the rate of 1.25 gal an hour. I put a set of $30 blades on it at an average of 150 hours. Fuel filter changes happen every 1500 hours (as per the Kohler manual). I've had to replace one part and a muffler. The part was a $25 throttle cable. The muffler was $150.

This ain't even coming close to adding up to $10 an hour, let alone $15 an hour.

gobbles2700
06-19-2009, 04:42 PM
Well all i can say is my machine cost nearly three times what you guys are talking about and i hope it will have a salvage value in the area of $3500 at 2000 hours. For you guys under $10 an hour besides having cheeper mowers are you thinking about the cost of insuring the machine? What about property taxes? How about the wheel motor or worse pump that goes just after warranty? Not likely but still possible you have to account for these things in your rate also. Not the whole cost as it doesn't happen with every mower but it does happen especially when you are running multiple machines.
Also downtime even though it was mentioned above I know those of you under $6 are not factoring these things when fuel is $3 of your cost.

Think about all bills you pay if the entire bill or percentage of it are directly tied to a machine the cost should be recovered through that unit, not your overhead. The most over looked examples being those above.

lifetree
06-19-2009, 10:17 PM
... For you guys under $10 an hour besides having cheeper mowers are you thinking about the cost of insuring the machine ? What about property taxes ? How about the wheel motor or worse pump that goes just after warranty ? Not likely but still possible you have to account for these things in your rate also. Not the whole cost as it doesn't happen with every mower but it does happen especially when you are running multiple machines. ...

Very good illustration of things most people don't consider !!

lifetree
06-19-2009, 10:18 PM
There's a couple of members here that get over 4,000 hours on a regular basis. A member that's no longer with us, Eric "Elm" Erickson used to get over 5,000 hours out of his gas powered Dixie Choppers on a regular basis. He's the reason I own a Dixie today.

What engines were on the DC's that you'e talking about ??

dtelawn
06-20-2009, 12:27 AM
My older Lazer Z has a little over 500 hrs on it and I haven't figured up my cost per hour lately but last year I come up with $11-$12. This number does not reflect any labor(equipment is different than labor) or any tax deduction on the mower. Considering you get the tax deduction that would really lower the actual cost. I do feel that it is better to keep a newer mower as primary and keep the older ones as back up.

Richard Martin
06-20-2009, 07:05 AM
What engines were on the DC's that you'e talking about ??

Kohler 23s and 25s.

Richard Martin
06-20-2009, 07:34 AM
My insurance yearly on this mower adds about 50¢ per hour. If and when I have a major problem I'll add the cost to forward going costs per hour. You've all heard the old excuse for raising prices "My costs are going up". Well that would be the case with me.

It's obvious that some people have lower costs per hour. Equipment is cheaper. Maintenance is done as per the recommended intervals. We're easier on our equipment. We tend not to buy equipment we don't need or a fancy new 40,000 tow vehicle. Since we use the same equipment day after day and care about the equipment we tend to hear when something is wrong with it and fix it before it becomes a bigger issue.

hackitdown
06-20-2009, 07:39 AM
Well all i can say is my machine cost nearly three times what you guys are talking about and i hope it will have a salvage value in the area of $3500 at 2000 hours. For you guys under $10 an hour besides having cheeper mowers are you thinking about the cost of insuring the machine? What about property taxes? How about the wheel motor or worse pump that goes just after warranty? Not likely but still possible you have to account for these things in your rate also. Not the whole cost as it doesn't happen with every mower but it does happen especially when you are running multiple machines.
Also downtime even though it was mentioned above I know those of you under $6 are not factoring these things when fuel is $3 of your cost.

Think about all bills you pay if the entire bill or percentage of it are directly tied to a machine the cost should be recovered through that unit, not your overhead. The most over looked examples being those above.

Well those costs are real. However, they are not equipment costs.

-Insurance: I have liability insurance, which has equipment coverage. The equipment coverage was only about $100 per year on top of the $750 for liability. But that is not equipment cost. This insurance covers me when I use a $10 rake, a ZTR, a Kubota, a wheelbarrow, or a leaf blower.
-Property taxes: A real expense, but they are not equipment costs. I pay $8K per year on my property. My business uses 10% of the property. The mowers take up 1/4 of that. Tough call.
-Triple my Aquisition Cost: My Exmark 52" ZTR cost $8,000 new. Even a $12K mower with 2000 hrs selling used for $3500 costs only $4.25 per hr in depreciation.
-Unexpected repairs: Here you are correct. I cannot account for this since it did not happen in my first 1000 hrs. But lets say the engine dies, a hydro pump goes, and a wheel motor, and I need to replace it all for $4000. Spread over 2000 hrs of use, that adds up to $2 per hr.

So $4.25/hr depreciation/cost (mine is $2.75)
add $3.00/hr for maintenace and repairs (over the top worst case, my real world is $1)
add $4.00/hr for gas (not typical, but who knows, right now its $2.70)

And you still come up to $11.25/hr. And that is if you buy a very expensive machine, you can't sell if for much when it is done, every expensive part on it breaks out of warranty, and gas goes back up. My real world experience adds up to $6.45 for my first 1000 hrs.

tacoma200
06-20-2009, 09:56 AM
I think the $12 or so I saw was for walker ZTR's which are quite expensive. Of course a large $11,000 ZTR will be more expensive to operate per hour than a smaller $7,000 but will probably be much more productive.

One of my biggest expenses (indirectly) is getting the ZTR to the job sites. It cost me time, fuel, truck expenses, especially being in a rural area.

gobbles2700
06-20-2009, 11:47 AM
Well those costs are real. However, they are not equipment costs.

-Insurance: I have liability insurance, which has equipment coverage. The equipment coverage was only about $100 per year on top of the $750 for liability. But that is not equipment cost. This insurance covers me when I use a $10 rake, a ZTR, a Kubota, a wheelbarrow, or a leaf blower.

Your equipment should be scheduled on your policy otherwise it is not covered for loss, $100 would cover 1 ZTR and some handhelds, no trailer or other equipment.

-Property taxes: A real expense, but they are not equipment costs. I pay $8K per year on my property. My business uses 10% of the property. The mowers take up 1/4 of that. Tough call.

You guys don't get taxed on your business property? Personal Property Tax form.

-Triple my Aquisition Cost: My Exmark 52" ZTR cost $8,000 new. Even a $12K mower with 2000 hrs selling used for $3500 costs only $4.25 per hr in depreciation.

Only thing missing here is Finance charges.

-Unexpected repairs: Here you are correct. I cannot account for this since it did not happen in my first 1000 hrs. But lets say the engine dies, a hydro pump goes, and a wheel motor, and I need to replace it all for $4000. Spread over 2000 hrs of use, that adds up to $2 per hr.

You still need factor in your downtime for any maintenance, and at the very least pay yourself or whomever is performing the work. Think about mower blades we try to change them every other day here and washing the machines in the spring can add up too.

So $4.25/hr depreciation/cost (mine is $2.75)
add $3.00/hr for maintenace and repairs (over the top worst case, my real world is $1)
add $4.00/hr for gas (not typical, but who knows, right now its $2.70)

And you still come up to $11.25/hr. And that is if you buy a very expensive machine, you can't sell if for much when it is done, every expensive part on it breaks out of warranty, and gas goes back up. My real world experience adds up to $6.45 for my first 1000 hrs.

If your comfortable with what you have left to pay yourself at the end of the year, Thats whats important. I won't lie I'm not always but it is getting better.

hackitdown
06-20-2009, 03:50 PM
Your equipment should be scheduled on your policy otherwise it is not covered for loss, $100 would cover 1 ZTR and some handhelds, no trailer or other equipment.

You guys don't get taxed on your business property? Personal Property Tax form.

You still need factor in your downtime for any maintenance, and at the very least pay yourself or whomever is performing the work. Think about mower blades we try to change them every other day here and washing the machines in the spring can add up too.

Look, the question is what is the hourly cost to run a ZTR. Insurance, RE taxes, washing mowers are all costs, but they are not hourly mower costs. If you want to ask what is the total hourly business overhead for a solo operator running a mower, they yes, add them in!

What's next, phone bills, accounting fees, lawyer, lunch money? Do I have to factor in the cost of my wheelbarrows and wrenches?

And I don't think adding in downtime as a cost is real either. It doesn't show on the hour meter. At this point I don't have much downtime, since I have 2 mowers. If one breaks, I fix it myself on the cheap when I am not out working. But that is my own choice. My friend has 3 mowers, so he can drop one off at the dealer to get fixed at high cost, but he is afraid to work on his mowers. Everyone has their own method. His hourly costs are rediculous to me.

My method keeps me way under $10/hr for a ZTR.

BJWLAWNCARE
06-20-2009, 05:13 PM
probably a little different direction but I have found hydro walk behinds to be a much better option. I bought 2 great danes a 36 and 48 for less than 6,000 brand new. I bought a 54 mtd pro hydro with 75 hours on it for 2,000. They work better on hills and under trees. ON MY LAWNS they work the best.

tacoma200
06-20-2009, 05:15 PM
probably a little different direction but I have found hydro walk behinds to be a much better option. I bought 2 great danes a 36 and 48 for less than 6,000 brand new. I bought a 54 mtd pro hydro with 75 hours on it for 2,000. They work better on hills and under trees. ON MY LAWNS they work the best.

I been to Scranton, Pa so I'd say your right. Love the roads there. Pa. has some rough terrain.

lifetree
06-21-2009, 09:58 PM
Kohler 23s and 25s.

What series Kohler engines ... Command, Command PRO, Courage ??

lifetree
06-21-2009, 10:05 PM
Well those costs are real. However, they are not equipment costs.

-Insurance: I have liability insurance, which has equipment coverage. The equipment coverage was only about $100 per year on top of the $750 for liability. But that is not equipment cost. This insurance covers me when I use a $10 rake, a ZTR, a Kubota, a wheelbarrow, or a leaf blower.
-Property taxes: A real expense, but they are not equipment costs. I pay $8K per year on my property. My business uses 10% of the property. The mowers take up 1/4 of that. Tough call.
-Triple my Aquisition Cost: My Exmark 52" ZTR cost $8,000 new. Even a $12K mower with 2000 hrs selling used for $3500 costs only $4.25 per hr in depreciation.
-Unexpected repairs: Here you are correct. I cannot account for this since it did not happen in my first 1000 hrs. But lets say the engine dies, a hydro pump goes, and a wheel motor, and I need to replace it all for $4000. Spread over 2000 hrs of use, that adds up to $2 per hr. ...

What these costs represent is overhead expenses and are legitimately allocated to revenue producing assets (i.e.-the ZTR's) in order to determine the cost of operation ... this is basic in any cost accounting course !!

lifetree
06-21-2009, 10:10 PM
Look, the question is what is the hourly cost to run a ZTR. Insurance, RE taxes, washing mowers are all costs, but they are not hourly mower costs. If you want to ask what is the total hourly business overhead for a solo operator running a mower, they yes, add them in! ...


What these costs represent is overhead expenses and are legitimately allocated to revenue producing assets (i.e.-the ZTR's) in order to determine the cost of operation ... this is basic in any cost accounting course !!

Same explanation as before !!

milkie62
06-21-2009, 11:56 PM
But it seems like guys are trying to charge every bit of business expense to their ZTR. Nobody is including any money they get back when they sell the unit.So for all you guys that only get 2000 hrs use and do not seem to include any monies received in selling the old ZTR--- can I HAVE your old one ??????????????

Richard Martin
06-22-2009, 03:48 AM
What series Kohler engines ... Command, Command PRO, Courage ??

Commands. I don't think they had the Pro back then. There's actually little difference between the Command and Command Pro.

hackitdown
06-22-2009, 09:45 AM
Same explanation as before !!

You are totally correct, in rare cases. Costs like insurance, taxes, phone, advertising, and everything else are associated only to a ZTR, IF, and only if, all you do is mow with a ZTR 40 hrs per week.

Otherwise, those expenses are shared across everything you do. Like many others, I also Prune, Mulch, Plow, Aerate, dethatch, cleanups, plantings, seeding, fertilizing, brush removal, install lawns, walks, and lots of other things that don't utilize a ZTR. I spend only about 18 hrs/wk on a mower.

How does it make any sense to associate my insurance expenses and my property tax bill to my mower's hourly cost?

gobbles2700
06-22-2009, 02:43 PM
Hackitdown

Maybe you misunderstood me, I am not allocating all of my taxes or all of my insurance to the ZTR.
I have all my equipment insured for replacement value so i know what portion of the insurance is attributed to each piece of equipment. I am not including my costs for my G/L, Auto, W/C, or Umbrella here. I spread those across my Labor rate as my part of my overhead, exception being the auto which gets involved also.

As for the taxes, I have to pay property taxes on my equipment so I know what protion of those taxes are attributed to each machine and include those in my CPH for each.

You can allocate your cost anyway you want, I became so specific when i started bidding Municipal maintenace with lots of trimming and my labor rate was to high. I realized I was including to many equipment related costs in my overhead.

gobbles2700
06-22-2009, 02:51 PM
But it seems like guys are trying to charge every bit of business expense to their ZTR. Nobody is including any money they get back when they sell the unit.So for all you guys that only get 2000 hrs use and do not seem to include any monies received in selling the old ZTR--- can I HAVE your old one ??????????????

I know I am including a residual value for the mower in my calculations. For me I assign a value between $2-5000 depending on the mower at 2000 hrs. None of my machines have hit this point yet but I probably will just set them aside at that point and keep them as backups.

lifetree
06-22-2009, 10:24 PM
You are totally correct, in rare cases. Costs like insurance, taxes, phone, advertising, and everything else are associated only to a ZTR, IF, and only if, all you do is mow with a ZTR 40 hrs per week.

Otherwise, those expenses are shared across everything you do. Like many others, I also Prune, Mulch, Plow, Aerate, dethatch, cleanups, plantings, seeding, fertilizing, brush removal, install lawns, walks, and lots of other things that don't utilize a ZTR. I spend only about 18 hrs/wk on a mower.

How does it make any sense to associate my insurance expenses and my property tax bill to my mower's hourly cost?

No, not in rare cases ... the previous explanation detailed that the costs are allocated to revenue producing assets like ZTR's ... however, the other revenue producing assets (i.e.-Plows, aerators, dethatchers, etc.) should also have these costs allocated to them as well ... again, this is basic in any cost accounting course !![/QUOTE]