Now Lets say you want to buy another ztr for 10,000
You should have the above numbers for all of your jobs....So now you can take each of those numbers and figure them weekly or yearly....all your jobs added up.
Should you buy the mower?
Remember, money for a new machine comes from one of two places.....Profit, and/or cost savings.
Profit you can do anything you want with.....Thats why we;re in business.
Buy whatever you want.
Take a bigger paycheck
Give your guys bonuses
Whatever you want.
You want another ztr
Well You know the production times.
Will that ZRT save you manhours?
You figure that machine will save you an hour a day on the crew
Thats 3 man hours a day or 15 man hours a week.
That machine will save you $225 a week
It will burn and depreciate, and require maintenance of lets say $125 a week.
So that machine will save you $100 a week
In 100 weeks it will have covered its cost
30 mowing weeks a year
In about 3 years, you will have saved enough time mowing that the machine will have paid for itself.
So do you buy it?
Well 3 years is about the lifespan of the machine. So to use cost savings as the reason, wont fly.
Just want the machine anyway? Well if you have enough profit saved, by all means buy it. Thats your option being the owner.
Just dont justify the machine as "saving you money" its not.
Now....Those numbers can change.
With that one hour per week of savings, you can add additional work.
If you maintain the machine and keep it in great condition, you may get more than 3 years out of it.
That 3 man hours a week in savings gets added to your "available total working hours" bringing down your $8 an hour overhead"
That changes your overhead numbers on ALL your jobs.
Lets say it saves you $1 per hour overhead.
Well.....Now that machine actually saves you an additional $120 a week
So now the machine is saving you 220 a week
Or 45 mowing weeks to pay itself off.
So in a year and a half in mowing, that machine will have paid for itself.
Now you have at least another year and a half that machine, minus maintenance and repairs is pulling in pure profit.
Does that make sense?
In a year and a half that machine paid for itself.
Now...You can keep running it at pure profit.
You can trade it in on a new one.
You can do whatever you want.