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organiclawncanada
08-16-2010, 07:53 PM
If you have to rent equipment do you mark it up to the customer or just build it all in?:canadaflag:

MarcSmith
08-16-2010, 08:17 PM
mark it up...usually around 30%

clydebusa
08-16-2010, 08:38 PM
[QUOTE=MarcSmith;3682919]mark it up...usually around 30%[/QUOTE


Same here 30 to 40%

Lefet
08-16-2010, 08:43 PM
And do you base that on a 4 hour rental or a 24 hour rental?

MarcSmith
08-16-2010, 08:47 PM
doesn't matter...what ever the rental charge is you mark it up and pass the bill along. and also read the fine print. most rentals for 1/2 day are 4 hours, and a full day is 8 hours of actual usage...not 24 horus of clock time. assuming the hour meter works...

now if you can rent something Like an aerator and use it on multiple jobs, then you can prorate the rental across all the customers...

I actually had one rental this winter for snow removal, and we used it for about 100 hours in one week rental. and we got dinged for 2 .5 weeks. base don the hours used...

Lefet
08-16-2010, 08:50 PM
Gotcha, good info, thanks.

organiclawncanada
08-16-2010, 09:53 PM
Thanks that is good info to know.

MarcSmith
08-17-2010, 07:09 AM
question for ya.

why would you consider NOT marking the prices up?

nepatsfan
08-17-2010, 07:18 AM
question for ya.

why would you consider NOT marking the prices up?

Because you are already behind the 8 ball if you don't own the equipment. In order to stay competitive I don't see how you can charge a customer a premium on renting something that other landscapers already own outright. For instance if you go rent a skid steer for 250 a day, then charge 30 to 40% on top of that thats up to $350. If this is a one day job....you aren't gonna get it unless you want to work yourself for about 15 bucks an hour. Its very hard to mark up a rental and stay competitive. I haven't rented anything in years but I would break even on a rental and try to get a decent days pay until you can afford to buy the equipment.

MarcSmith
08-17-2010, 07:45 AM
Ne I can understand your logic.... and I can agree with it to a point... but by using your logic when we mark up materials for a job we are loosing a competitive edge to the nursery who does installs or to the larger company that has better buying power and gets lower prices...

Marking up the prices covers my costs for renting the equipment, picking it up, floating the payment on the bill and dealing with any potential down time issues..

I provided full landscape maintenance for my clients in Florida... I was very anal about not letting other landscapers on the properties I maintained. and my relationship was good enough that my clients trusted me. Routinely I would rent man lifts/bucket trucks to do palm trees as the Clients asked. I always tried to group the jobs together so to minimize the rental fees for all involved. so would it have been wise for me to save up and spend 40-50K on a bucket truck plus insurance, plus maintenance for a piece of equipment that I'd use a dozen times a year... No...

I had several large commercial properties where I subbed out the parking lot sweeping. I guess I could have spent 80K on a sweeper, but no It was smarter to sub out and markup....

by marking up equipment...yes you loose some competitive edge if your clients are bidding the job to multiple vendors...but if your clients are not bidding the job out, then you don't have the competitive edge to worry about...

when i rented a dumpster you better bet I was marking it up...but I guess I could have saved the money and bought my own dumpster, and then another 120K for a roll-off truck for the 3-4 times a year I would have used it

when you currently bid a job out which equipment you use and its cost to operate better be considered in the bid...otherwise you ARE leaving money on the table...

There are instances when its nice to rent if you don't have enough jobs to justify the expense of a new piece of equipment.

So a 250 dollar rental for the day you ad 75 bucks......and you are still short on the time it takes to arrange the rental pick it up and return it

Oh and my question was more of a thinking exercise for the OP to see what reasons he had for NOT marking it up...

nepatsfan
08-17-2010, 07:57 AM
I would say that on a smaller piece of equipment like an aerator you can easily bury the cost and mark it up if you do multiple clients. If you are renting bigger pieces of equipment it may not make things cost effective for you if you are starting the job -$300-$400 a day before you started. Maybe you are leaving money on the table by not marking it up but if you lose jobs because of it you left money there too. I would still get an hourly rate for picking it up and dropping it off factored in. I wouldn't have a significant mark up on the machine, just to stay competitive. Maybe I'm wrong, but that's why I don't rent. If someone wants me to do skid steer work I am at $500 a day for the man and the machine, plus materials(marked up) and plus laborer's if needed. If it's a job on a property you are already servicing I guess you don't have to be as competitive.

MarcSmith
08-17-2010, 08:25 AM
The key being that if you get enough work... then it makes sense to buy...I rented a power washer for one job... made boat loads of money on the job, and then I went out a bought one... if i were to rent a machine its going to cost 250, plus markup= 325. and then my labor for the day ends up being about 22 bucks an hour to equal your 500 bucks a day...or I don't mark up the labor and I end up getting 31 an hour to be competitive..still way to low. and If I owned the equipment I be making more money...but..I have costs associated with that equipment that i don't have while I'm renting it...

The key is to know your customer and know your job...if its a no bid situation then you can and should mark up but if its a job that you see yourself doing more and more of, at some point you should consider buying..

nepatsfan
08-17-2010, 08:47 AM
The key being that if you get enough work... then it makes sense to buy...I rented a power washer for one job... made boat loads of money on the job, and then I went out a bought one... if i were to rent a machine its going to cost 250, plus markup= 325. and then my labor for the day ends up being about 22 bucks an hour to equal your 500 bucks a day...or I don't mark up the labor and I end up getting 31 an hour to be competitive..still way to low. and If I owned the equipment I be making more money...but..I have costs associated with that equipment that i don't have while I'm renting it...

The key is to know your customer and know your job...if its a no bid situation then you can and should mark up but if its a job that you see yourself doing more and more of, at some point you should consider buying..

I understand what you are saying but when over 10% of the workforce is unemployed and people are slow all over the place it is tough to nickel and dime on something that costs you nothing to run. I believe you should charge for your time picking up and dropping off and a small mark-up if you can but 30-40% mark-up plus a decent hourly wage will likely price you out of some jobs. I am not opposed to marking up equipment if you can get it but I think you will find that more often than not you will price yourself out of the market.

My costs for the equipment are factored in. If I call it $150 a day for fuel, maintenance and operating costs I am still at @$45 per hour, plus mark up on materials and labor. That piece of equipment costs you nothing more than the rental rate....there is no risk. The majority of my equipment is payed for other than a truck and a mower that I got zero percent on and it will be payed before the promotion is over so I think that $150 is likely much higher than the actual cost to me. To each his own I guess, Its not that I totally disagree with you, I think it looks good on paper. Its kind of like buying a car. Does it really matter what the trade is...if the dealer says he's giving you 10 grand for a 2 thousand dollar truck and jacks up the price of the new truck...whats the difference. If you can make your hourly rate and land a job without marking up the machine which essentially costs you no more than the rental rate I think you come out ahead.

MarcSmith
08-17-2010, 09:15 AM
I understand what you are saying but when over 10% of the workforce is unemployed and people are slow all over the place it is tough to nickel and dime on something that costs you nothing to run. I believe you should charge for your time picking up and dropping off and a small mark-up if you can but 30-40% mark-up plus a decent hourly wage will likely price you out of some jobs. I am not opposed to marking up equipment if you can get it but I think you will find that more often than not you will price yourself out of the market.

honestly a rental still takes fuel, if I break the equipment, chances are i'll have to pay for the repair, flat tire, I fix, , broken teeth on a bucket, ect. so its still very easy to have costs with a rental. Again know your job. if its a bid situation, then you have to bid what you are comfortable with. Being that you own the equipment you can bid it tighter.. But at the end of the day you still have have to make the money to repair/maintain/replace the machine when the time comes... so you are still paying a fee to "rent" the machine you fee schedule would be much less than mine. But I don't have the equipment sitting around waiting for me to use...while I pay for it..

lease/own, rent/buy, employees/subcontractors...you have to find you own comfort level..

if it was a job that i was already on and you bid against me, even if I did not get last look at the bids, I'd figure out a way to get the job...even if it meant doing it for slightly over cost..I just did not like other folks doing work on my jobs that i could do..