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Tom,
Do you add the same profit margin to everything after you know your cost? What is wrong with adding profit to each item in the job and totaling? You still know your cost, and you are able to have bigger margins on certain items then others if your market allows.
Tricky,
I guess it will be different for everyone, but renting a piece of equipment for $400 a day and not making a profit on it seems like you would be leaving alot of money on the table. It does not matter if you only use it for 1/2 day or not, someone is still being charged and you should get paid for it.
Here is what we do, and let me know if we are off base. When we bid a machine on a job and it is one of our own machines, we charge by the day or by the hour. This helps us with the jobs that do not need a machine for all day. However, if we rent a machine for a full day and we only use it for 4 hours, we get paid for that machine's rental plus a profit. If you have to rent a machine for the day and can't get the money plus some for your time, then why take the job. You are loosing money!
We pay for our machines in overhead, so it is built into our hourly rate. We still charge for the machine on site, but it also allows us to use our equipment charges as negotiating tools with the customer. In our area we pay $140-$180 for a large ss and $300 for a track machine per day. We price our ss out using the $140 per day or $40 per hour, and when we rent a track machine for a day, we charge $345 per day. I am not saying you need to make a killing on the rental's, all I am saying is there should be a standard set. Even if you make only $5 on the rental, get something for your administrative time entering the bill. I have had these same debates in the past, and everyone is going to look at it different. tjl mentioned above Vander koi, well I do not follow his methods. I'm not saying there wrong, just different then what we choose to follow. I know plenty of guys that do not bill extra for any equipment they own. To me that is not acceptable. You are in theory renting that equipment to the customer while you are on there property, and should get paid for it accordingly. I hope this all made sense. Good discussion!
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Matt
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