Wear on equiptment ?

Discussion in 'Lawn Mowing' started by Outdoor Creations, Feb 6, 2008.

  1. Outdoor Creations

    Outdoor Creations LawnSite Member
    Posts: 26

    I was tring to figure out how I put into my pricing wear on trucks, skidloaders, mowers and all other equiptment in to each job. There has to be a standard that would be charged for each job. By the hour used? What better place than this to ask. Any info would be great!
  2. IMAGE

    IMAGE LawnSite Bronze Member
    from midwest
    Posts: 1,134

    You need to have your expenses covered in your hourly rate. This is a simplified example, and the numbers are made up, but it should give you an idea.

    You have to figure out the equipments depreciation and other costs to the hour first. Say its a $10,000 mower, and its going to get 1600 hours on it in 4 yrs and then your gonna trade it in for a new one. If the dealer gives you $4,000 for it, then it depreciated $6,000. Or $3.75 per hour.

    Then figure out your expected expenses over that 2,000 hours.
    $600 oil changes ($15 every 50 hours)
    $200 blades
    $150 tires
    $100 belts
    $350 other misc
    $1400 = $1.4 per hour

    Fuel usuage 1.2 gallons per hour = $9.15 per hour

    Add up your costs per hour, and you see what that equipment is costing you to run. This one came out to $9.15 per hour, however that is kinda low, there are other costs your gonna have to figure in. About $10 per hour is what I am figuring.

    Other then the equipment your directly using on the job, you also want to find the cost of everything else that you have, or that you pay for. Figure your insurance, vehicle costs, etc. Figure these costs for the year then break it down to the month, then divide that by the # of hours you work a month to find your other "indirect" hourly costs.

    Add your indirect costs to the equipment cost, and you get a number that is actually what it is costing you to operate. Say it is $20/hour - then you are breaking even if you charge $20, so you figure out how much you want to make over that, and that is what you charge per hour.

    Then figure the hours that the job will take, and multiply it times your hourly rate to find what you will charge to do it.

    Hope this helps.

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