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View Full Version : ? for those who price by man hour...


rywnygc
01-30-2011, 08:07 PM
First off, no, I dont want to know how much you charge...lol

my question is..
If you buy some large equipment ie: bobcat, how do you charge to run it? I was thinking machine = 3 men. Is this about average or am I off?

Green Machine Mowing
01-30-2011, 08:15 PM
Machine= 1 Man Hour + Fuel used in an hour on avg + maintenance ect. + what you want to make an hr on the machine

New Leaf Maint
01-31-2011, 12:14 AM
Machine per hour = (Total machine cost including interest if bought with a loan + total projected maintenance over the years that you own it - what you will get for it when/if you sell it) divided by the total projected hours it will be used + gas that it uses each hour plus your man hour rate for the man operating it and add any profit you want to make for each hour that you operate the equipment.

That's how I learned to do it.

bustutah
01-31-2011, 12:35 AM
My first years in biz I charged way under. My rule of thumb is charge as much as the customer is willing to pay. A short conversation should unveil their general price.

T.E.
01-31-2011, 08:21 AM
My first years in biz I charged way under. My rule of thumb is charge as much as the customer is willing to pay. A short conversation should unveil their general price.

This may still not produce enough to make a profit!

To the original poster....it appears by your question you'd be better off renting a machine instead of buying one. I would venture to say if one had enough work to warrant purchasing a machine as you describe, you'd better know how to charge for it. JMO

Good luck

rywnygc
01-31-2011, 09:58 AM
This may still not produce enough to make a profit!

To the original poster....it appears by your question you'd be better off renting a machine instead of buying one. I would venture to say if one had enough work to warrant purchasing a machine as you describe, you'd better know how to charge for it. JMO

Good luck

I am in western New York (ski country) where it snows pretty much every day during the winter. During this coming green season, I will be doing more walls and such than I did previously. Having a bobcat would help me tremendously.

BTW, I dont post much. If I didnt have the business to warrant getting more equipment, I wouldnt be asking about it. Thanks for your concern though.

rywnygc
01-31-2011, 09:59 AM
Machine per hour = (Total machine cost including interest if bought with a loan + total projected maintenance over the years that you own it - what you will get for it when/if you sell it) divided by the total projected hours it will be used + gas that it uses each hour plus your man hour rate for the man operating it and add any profit you want to make for each hour that you operate the equipment.

That's how I learned to do it.

Good way to look at it. Thank you!

txgrassguy
01-31-2011, 10:38 AM
Price a rental machine plus delivery to the job site per day.
Add in whatever labor rate your operating cost for labor dictates.
Then add a minimum of 20% to cover unexpected issues.

I would add never ask the client what they are "willing" to pay. You'll end up paying their price and not achieving what is needed for profit. Most rental centers have a price sheet for various equipment, get one and use it for estimates.

When I am asked to bid on a job requiring powered equipment I simply tell the client what the amount will be. If they balk at the price first know what you minimum cost is for minimum time on site then scale back the scope of the estimate. If they still balk let someone else get the low bid.

I am continually amazed at how low some prices are quoted for equipment jobs and even more amazed people accept low bids. I simply cannot remember after twenty years in this business how many times I have heard from a client who initially refused my bid, went with the low bid then had to pay me about 30%-60% more than my original estimate just to straighten out the first poor schlub's work.

A for instance: People around me have "hobby" ranches of 15 - 100 acres. I am always asked to grade an aggregate driveway or finish grade an area they can't with their equipment. If they want a per hour rate I quote a minimum of $275 for the first three hours which includes travel both to and from the site. Anything beyond the initial three hours is a flat rate of $65.00/hour for my shaping tractor and me. If they are a pita the minimum is $400 for the initial and $85.00/hr afterward.

A second for instance: I was contacted by a property management company that couldn't "find" someone to grade a drive at a rental property. Twenty minutes from my shop, dive was less than 200' long. I quoted the minimum and with the travel time I was back in an hour. $275.00 - thank you very much. Best part is they call for all sorts of powered jobs now and don't question the price since: 1 - I do good work, and 2 - I respond with-in three business days.

rywnygc
01-31-2011, 11:05 AM
thanks txgrassguy for your input. I would never ask how much a client is willing to spend. Kind of reminds me of when I was selling cars! 80% of my clients are 700k+ residences and if I asked how much they wanted to spend, I'd end up doing a lot of charity work. I am priced above average for my area but stay very busy.

I am considering buying some heavy metal for use in both the business and for home.

Mountain Peak
01-31-2011, 05:09 PM
When I first bought my skid loader I was starting to lots of sprinkler system installs. I was renting a loader at first.
When I had enough business each month that would have covered twice the rental expenses (figuring the per day charge, fuel used, and time to transport to job site) I figured I was good to go. I then divided the payment into the average hours per month that I used it based on past performance, added the fuel based on a per hour consumption basis, and doubled that total to figure my cost per hour so I could get enough for maintenance. Then you add your own time and you have your COST. After that just figure out how much profit you need out of that equipment to make what you need to survive.