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Include rental equip. in priceing?

Discussion in 'Lawn Mowing' started by Dix, Mar 25, 2003.

  1. Dix

    Dix LawnSite Member
    Messages: 50

    I am starting to do landscaping jobs in addition to my regular mowing. At times I rent the equipment I need. Normally I will multiply my materials costs by 2.5 (give or take a bit) to come up with a price. Wondering if I should add the equip. rental price to the total, or just absorb that cost (take it out of my profit) to remain competative with those that own their equipment.

    Let the openions flow!

  2. baddboygeorge

    baddboygeorge LawnSite Bronze Member
    Messages: 1,249

    here is your answer do you rent the equipment free????????
  3. Art Stubbs handy 58

    Art Stubbs handy 58 LawnSite Member
    Messages: 132

    You should include any cost you incur while doing a job, this is cost of doing business.....

    Just because some one owns a piece of equipment doesn't mean you cant compete with them, it takes "x" amount of dollars to operate that piece of equipment....

    Sometimes renting is cheaper than owning.....

    :eek: Please don't absorb from your profit, that is exactly what that means "YOUR PROFIT"......

    Best of luck this season..........
  4. brucec32

    brucec32 LawnSite Platinum Member
    Messages: 4,403

    I had to chuckle when I read your "multiply by 2.5 materials cost" formula. I had a friend who I worked for part time 12 years ago who had a similar formula, he just doubled everything.

    He lost money for 2 or 3 years, then went out of business. So much for that pricing formula.

    Should you make less for your time because the plants you're planting cost less, or you're using cheap pavers instead of expensive ones? I'd rethink that pricing formula.

    And yes, you have to factor in ALL costs when calculating your prices. But expect those who own the equipment and do higher volume with it to have less machine cost in their bids.
  5. fblandscape

    fblandscape Banned
    Messages: 776

    I think this issue depends on what type of equipment you are going to rent. If it's going to be a TLB, excavator, skid steer, wheel loader, etc then YES you should charge rental, even if you own the thing you should be charging for rental. However, if the job is something like let's say??? stump grinding... if the stump is worth $100 to grind, but the grinder costs $150 to rent for the day... you COULD charge the customer $250, but either 1) they will not accept it, or 2) they will accept it... find out later on they could have had it done for a lot less, and you lose the job. Just a for instance.
  6. LWNMWR1

    LWNMWR1 LawnSite Member
    Messages: 188

    absolutely. it is sometimes not cost efficient to own every piece of equipment available, but that does not mena that it doesn't take know how to operate with successful results. i always let customers know if i'll be renting and that the cost will include the rental. i also try to sell that service to more than one customer. keep a runnnig tab in your head of people who may be looking for the same service.
  7. Dix

    Dix LawnSite Member
    Messages: 50

    Thanks Guys
    Got the answers I expected. As for the 2.5 times costs formula, it is not chiseled in stone. If it appears that it would equal less then my normal hourly rate, I bump it up. So far it is working well.

  8. Awilkinson

    Awilkinson LawnSite Member
    from Indiana
    Messages: 96

    I do the same thing when renting, always include the price in the bid. I have had no problem getting work when I do this!
  9. I include rental cost in bid.
    Rental, damage insurance, tax, and a % mark up.
    plus pick-up and drop-off time.

    Consider finding a sub if possible, it may be more economical.
  10. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    "Wondering if I should add the equip. rental price to the total, or just absorb that cost (take it out of my profit) to remain competative with those that own their equipment."

    This comment makes me think that you think that the people who own that equipment somehow got it for free?? If so, please tell me where this source of free equipment is so I can get in on it. They are charging prices that cover the costs they incurred to purchase, maintain, repair, operate & replace that machine after it's useful life, plus make a profit using it. (Although based on some equipment rates I see being charged, that comment is certainly debatable ;) ) When you charge for the costs that you incur to rent that equipment you are remaining competitive with those that own that equipment.

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