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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!
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I don't think it's accurate to say you're loosing money. You are making the same amount of money on your labor and materials as you would without the machine only you're doing a job that you couldn't do cost effectively without it. The point I was trying to make is that you should always get what you can out of a rental, mark it up if you can by all means. If renting the machine for a day allows you to do a job you otherwise couldn't but marking up the rental is going to risk pricing you out of the job why push it. Do the job. The $400 is a wash.
If other guys are charging $35/hr for the skidsteer and it will be used for 4 hrs on the job then they are bidding that part of the job at $140. If I rent a machine for $400 to do the same job I have to
start by effectively charging $100/hr for the same service. Do I really need to add another 15 or 20% when I'm already close to 200% higher? On the other hand I can rent a full sized backhoe for $2500/month. Lets say I use it for 15 days or 120hrs. If I just divide 2500 by 120 and mark it up a generous 25% that gives me an hourly rate of about $26/hr. I know that the going rates in my market are
double that so I'm going to charge going rates and make my profit 77% instead of 19%.
I should say that I hardly ever fail to mark up a rental. We don't do a lot of 1 or 2 day machine jobs so my rentals tend to be more of the long term variety. Or we'll try to schedule a few smaller jobs at the same time so I can rent a machine for a week and make some money on it. If someone figures out a system that works for them then great. But the bottom line is that you should be trying to maximize your profit without pricing yourself out of the market. Because rental equipment is priced on a sliding scale by duration of the rental it seems to me that the only way to accomplish that balance is to take each situation as unique and price it accordingly.