Rental Equipment

[nepatsfan]

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]

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]

Originally Posted by MarcSmith

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]

Originally Posted by nepatsfan

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..