How much do you allott in your rates for equipment costs?

Discussion in 'Lawn Mowing' started by zman2307, Jun 8, 2009.

  1. zman2307

    zman2307 LawnSite Senior Member
    from OR
    Posts: 328

    Do you charge a certain percentage of your revenue for this? There's so many mowers at so many price points, with varying productivity.....I'm trying to figure out the best way to figure out how long it takes a mower, for instance, to pay for itself.
     
  2. zman2307

    zman2307 LawnSite Senior Member
    from OR
    Posts: 328

    *not charge, but allott a certain percentage.
     
  3. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,501

    I always figure $10 per hour for equipment and gas. I think it is lower than that.
     
  4. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    You have to use the expected life of the equipment.
     
  5. zman2307

    zman2307 LawnSite Senior Member
    from OR
    Posts: 328

    I've heard some LCOs allott 10% of gross revenue, which for a lot of contractors I know is in the neighborhood of $100,000-120,000, so 10% is 10,000-12,000. Granted this includes maintenance on the equipment as well as any payments, etc. Fuel is calculated separately. A diesel or other large frame Z would sure pay for itself quickly at this rate with the right accounts!
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  6. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    It varies from one piece of equipment to the next, in terms of not just replacement cost but in my case maintenance
    parts and labor and operational costs as well, this in turn does affect the hourly labor rate, in my case per machine.
    Thus, I charge a different hourly rate depending on what I am going to use.

    There's low and high maintenance pieces, a shovel is very low, a stump grinder very high, the rest seem to fall in between,
    then as was mentioned there's the life expectancy which affects the time it takes to figure out the replacement cost, however...
    In terms of life expectancy that will vary from one operator to the next, a few guys replace everything every year while others
    never buy another, once again the rest fall in between but how many years a piece of equipment lasts, how can I tell you?

    For example...
    Some folks get 1-3-4 years out of a trimmer, for others it lasts forever, how long will it last you, I don't know.
    When it craps out, how long it takes to figure out the problem, do you fix it yourself, drop it at the dealer or just buy another?
    Parts also, do you keep a back stock or do you order as needed, do you mail order or buy at the dealer?

    All of this affects the cost, I don't think my figures would be accurate for someone else's business model.
    It helps perhaps to track these costs, the time, the money, all of that, and I believe the actual answer
    to this question would then reveal itself to you over time.

    Peace out
     
    Last edited: Jun 10, 2009
  7. jkilov

    jkilov LawnSite Bronze Member
    from MS
    Posts: 1,415

    That's pretty much it. For a ZTR hour anyway.
     

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