Charge for using your Compact Utility Loader

Discussion in 'Heavy Equipment & Pavement' started by Brian M, Mar 23, 2008.

  1. Brian M

    Brian M LawnSite Member
    from CT
    Messages: 94

    I just got my new Toro Dingo TX525W and I'm looking for advice on how to charge the customer when using the Dingo for various jobs.

    For example; if you had a large job to do that you used to do with hand tools, and it took you 10hrs to do it and you where getting $45 hr, you would charge $450.

    Now with the Dingo, that same job should only take about 3 hrs, so I would be charging $150 hr. That seems high to me and I’m sure to the customer too, for only being there for 3 hrs. If I still charged $45 hr then I'm basically working to pay off the Dingo, with little or no $$$ for me!

    And with all the different attachments available, I could offer more services, but I would have to rent certain attachments at times, so do I also add in the rental price as well?

    Another example, post hole digging, do you charge by the number of post holes or by the hour, and what about the rental cost of the post hole digger?

    So what seems to be the average hourly rate for a CUL, and do you also charge an hourly rate for you the operator?
  2. beano

    beano LawnSite Senior Member
    Messages: 425

    Personally, i wouldnt charge an hourly rate. Charger per job and make more$$$ with less time. The customer agrees to the price, you do the work and everyone is happy. Dont tell them how long it will take, chances are they dont care, they just want it done.
  3. Mr. Vern

    Mr. Vern LawnSite Senior Member
    Messages: 632

    I agree with Beano! Charge by the job whenever possible.
    As I mentioned in response to your original post, if you get into the position where you are charging by the hour you need to figure what it would cost to rent the unit for the day. Remember that most yards (at least here) give you 3 hrs or full day options on rentals. If you are going to be in and out on a job - say 2-3 hours you need to charge the hourly rental rate plus mobilization time. Be realistic here; you need to prep the equipment and do your daily service as well as wash the unit when you are done. If you are getting a full day in maybe you consider that as overhead covered by the daily rental rate, but if its a small job you will likely spend another hour or more getting ready for the job, traveling to and from, and cleaning up afterward. This is all time that you can not use to bill another customer so you have to bill the current customer.
    Some general rules of thumb that I try to live by are:
    1. when quoting a job, I never give a breakdown of materials vs. labor, or how many hours a job will take. If they ask how long it will take, I simply tell them how many days from start to finish - not how many labor hours.
    2. When working by the hour, I never even guess how many hours it will take. If you do, this automatically becomes a not to exceed quote in the customer's mind. I simply tell them its $X/hr ($105 for our Dingos or Bobcat) and let them guess how long it will take. If they press me for an estimate, I simply tell them that if I tell you a number you will be mad at me if it exceeds that and in the end I will be taking the responsibility if it takes longer than I thought it would without the benefit of the win if it takes less time(I have essentially assumed all of the downside potential with none of the upside potential) - no good!
    I view estimating as a risk management decision; if I give a firm quote then I assume all of the risk. If I am uncomfortable in doing that, or if the customer requests an hourly or T&M quote, then they must assume all of the risk. I have never found a way to equitably share the risk, so I never get myself in that situation.
    Bottom line for me is to determine my operating costs and establish my minimum possible price, then I try to evaluate the market value of the job and determine a job price somewhere between the two - hopefully at the top of the range. I have found that the key to keeping your price near the top is to do excellent work, and to keep the schedule booked out several weeks - if you do this you can afford to not get the job you are bidding on and as a result you will not be afraid to ask for top dollar. if you get close to running our of work you will be afraid to not get the job and so you will lower your price. Keep the calendar full!!!!!!
  4. YardPro

    YardPro LawnSite Gold Member
    Messages: 3,570

    I charge $150.00/day for our dingo. If we will have it on a job a day, but only use it a few times, i charge our $100.00 minimum for the machine....

    remember that you have a $21K machine to pay for.....
  5. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Messages: 3,526

    Not trying to give a lesson here or be a smarty pants but....take the cost of the machine and divide the cost by the hours ( I think most use 2000 hours as a good life of the product), figure out the fuel cost per hour, operator cost per hour and make sure you have that covered. As posted above...21k machine = $10.50....Im not sure of fuel usage but maybe a gallon an hour =4.00 and what ever your goal or the operators salary = 15.00 ??? and Im not figuring anything for the cost of repairs or routine maintenance...I have no idea on that or anything for the tow vehicle or trailer ....but what I have listed is allready 30 bux an hour to break even.

  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,349

    For my tractor and mini excavator I charge 60$ per hour and mininum of 2 hours, however Im with the other fellers and try to quote the job not the hours. Those Dingos are handy and can turn a 45min job into a 3 or 4 minute job, dont know how you charge for that.
  7. Mr. Vern

    Mr. Vern LawnSite Senior Member
    Messages: 632

    One more thought to consider. Say we both charge the same hourly rate for our machine, but you are twice as good an operator as I am. On the same job, I would earn twice as much as you. While I am fumbling around trying to get the job done, you are out looking for another job - that might seem attractive to you now since you just bought your machine. Wailt a little while until you are really good on it and you will see why most of us do not like to do hourly work, or at least if we do we charge a lot by the hour.
    Along the lines of what Yardpro was saying, I will charge a rental fee for the day if I figured my production numbers using the Dingo, but not if I am using standard labor hours. In the latter case I figure that I am covered by the standard hours and that the Dingo will pay for itself by getting me off of the job sooner.
    In the end my philosophy is simply that I made the investment and I should be the one who benefits from it. If you keep that in mind you should always be able to figure out the best and most equitable billing solution.
  8. Brian M

    Brian M LawnSite Member
    from CT
    Messages: 94

    Great advice everyone!
    I appreciate your help!!
    Keep it coming!!!
  9. Hummer

    Hummer LawnSite Member
    Messages: 119

    Shouldn't you have figured all this out BEFORE you bought the new machine?
  10. Brian M

    Brian M LawnSite Member
    from CT
    Messages: 94

    What are you a wisea$$

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