How long for a mower to pay for itself?

Discussion in 'Lawn Mowing' started by Richard Martin, Dec 14, 2001.

  1. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    How long does a mower take to pay for itself?

    This is a good question. A buddy of mine said that the Exmark Lazer Z that he bought this year had already paid for itself but I disputed his claim. I based my dispute on my own experience this year.

    I bought a Dixie Chopper 60" mower this year. As I reported in another thread this mower saved me 168 hours over the previous year's equiptment. If I multiply 168 by $40.00 (my average per hour) I get $6720. Is this how you compute equiptment paying for itself or are there some other factors I'm not taking into account?

    Richard Martin a.k.a. Crabgrassman
     
  2. General Grounds

    General Grounds LawnSite Senior Member
    Posts: 902

    :blob3: Rich i quess that works well, or how about lets say you cut ever lawn with that machine only, so lets assume for argument sake you have 40 lawns at $45. a cut, That's $1800 a week, we have a 32 week cut year here, so that $57,600 for the year i quess you paid for your mower. thus assuming this is a 1 man opp, with little over head, even if you say 2/3 is overhead that still leaves you with $19,200. Tony
     
  3. eslawns

    eslawns LawnSite Senior Member
    Posts: 712

    IMO, you're looking at this backwards. You do your best to determine the life expectancy (in hours) of the machine. Add in the fuel, maintenance and repair costs. Divide that figure by the number of hours and that's how long it takes to pay for it, however long that is. Accumulating gross income will vary so much it's basically meaningless. Not only would it be different for each person on this board, it would be affected by the weather and the time of year it was purchased.
     
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    eslawns wrote:
    ...........................
    You do your best to determine the life expectancy (in hours) of the machine. Add in the fuel, maintenance and repair costs. Divide that figure by the number of hours and that's how long it takes to pay for it, however long that is.
    ...........................

    I expect my DC to last 4,000 hours.

    I will assume you meant to say "Add the cost of the machine to the expected expenses associated with the machine" for a total of around $14,000 and divide that by the number of hours the machine is expected to last? This would leave me with a total of 3.5 hours for the machine to pay for itself.

    You've apparently lost me completely. Please splain better.
     
  5. Mark

    Mark LawnSite Senior Member
    Posts: 723

    Richard i purchased a new Z-Master in 2000, Paid Cash. But this yr i figured it took me around 2-months to get that money back into the same accout it came out of. That includes all expences, That was 288hrs at 40 dollars per hr. Marks Mowing Service
     
  6. eslawns

    eslawns LawnSite Senior Member
    Posts: 712

    Richard,

    The point I was trying to make is that it's not that important how fast you can pay for it, but what it costs to run it. Using the numbers you have it's $3.50 per hour. I should know better than to type when I'm sleepy.

    How fast you can pay for it depends on many things. If you were making $275 a day before you got the mower and $350 a day after you are now grossing $75 more a day. How many days do you work before the difference pays for the machine? 187. This assumes (always dangerous) that everything stays constant. The thing to keep in mind is that you can't really tell the future, so you just take the info you have and make your best good guess.

    I'd rather know what it costs per hour to run each machine. In other words how much of the machine's useful life does each job use up? Also, you'll know whether the machine was a good investment or just a cool toy.



     
  7. scottt

    scottt LawnSite Senior Member
    Posts: 269

    I think what he meant to say was divide $14,000 by expected hours(4,000) and what you get is how much it costs you to run the machine per hour. So your 3.5 number is what it cost to run per hour, not how many hours it takes to pay for itself.
     
  8. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    So let's do this. We take either:

    the time saved multiplied by the dollars per hour you gross and then subtract the costs as per the formula we devised for figuring costs. It would look like this:

    168 hours X $40.00 = $6720
    minus
    268 hours X $3.50 = $ 938 Cost to operate the machine
    equals <br>$5782 Amount of money this machine paid for itself this year

    or

    the additional money earned in the same number of working hours and then subtract the costs as per the formula we devised for figuring costs. It would look like this:

    $75.00 X 125 working days = $9375
    minus
    268 hours X $3.50 = $ 938
    equals <br>$8437 Amount of money this machine paid for itself this year

    Hmm....
    :confused:
     
  9. turfman59

    turfman59 LawnSite Senior Member
    Posts: 801

    You really did a good job by purchasing a productive piece of equipment. Your pay back was faster than you calculated because of actual residual value of the mower.
    with those kind of labor saving it seems a small raise in wages is owed you or one of the employees. gotta reap benefits now and then.
     
  10. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Posts: 1,762

    The real truth is it takes just as long as the loan term duh.... How could you ever figure it any other way...yeah you saved time...time dosent pay you extra money only the customer does. Yeah you might be able to pay your workers less hours but that is gonna make them pissed. If you have extra time the only way to make that mower pay for its self is to do a GREAT ! sales job and get yourself some new acounts. Having a quick mower isnt going to get you those acounts being a good sales person IS ! so were do you figure in how quick it payes for itself then ? When my cousin got his first ZTR he saved himself many many hours but never picked up a new customer it took him the full 36 month term to pay it off because he made no extra money to make double payments. So if he DID do some sales work in the field he would have gotten more acounts which equals more money...got my point ? GOOD !:angel:
     

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