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Old 01-31-2008, 10:06 PM
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Charging for equipment

Seems everyone has different opinions on renting vs. purchasing equipment. For us, for now, we're not ready to purchase any large equipment. We did a lot with a backhoe last year, and anticipate at least as much this year. We also rent a variety of other pieces of equipment. We make sure if the equipment is rented for the day, if one job doesn't last a day we have multiple jobs lined up for that day to make it worth our while.
We charge for the rental of the equipment (if there's more than one client, we usually split it between the two) and make a little on top of that. Other than that, we just charge our hourly rate for the amount of time the job takes. Looking at it from both ways, if we charged, say, an extra $10 an hour for the amount of time the job took, and just the rental fee so there's no money out of our pocket, seems that charging a bit extra for the rental is more profitable.
Any one have any thoughts on the matter?
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Old 01-31-2008, 10:18 PM
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Are there any additional skills a person would need to be able to operate that piece of machinery? Is that skill set worth charging a premium for?
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Old 01-31-2008, 11:28 PM
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There is no question that there are additional skill sets a person would need to operate that piece of machinery. I think sometimes I worry about overcharging the client. I guess a better way to formulate my question would be:
Is it "OK" (a good and/or legitimate business practice that would let one's conciense sleep well at night) (sorry, tired) to charge the client let's say the $300 the rental company charges us, an additional $200 for p/u and return, and then $60/hour for operator on machine instead of $50 for regular labor??
My biggest thing is to ensure we are doing our job to the very best of our ability and to be sure that we are being honest to ourselves, our employees and our clients.
Hopefully my fatigue is not making this jibberish.
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Old 02-01-2008, 09:36 AM
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Fine Edge is just really nice Fine Edge is just really nice Fine Edge is just really nice Fine Edge is just really nice Fine Edge is just really nice
Most companies that I've dealt with lately have a minimum charge just to mobilize their equipment to your site - ( average $250 ). Then I get charged anywhere from $75 - $95 per man hour for them to operate. I know this going into a job and I can get fairly close on how long it will take them. Then I add a few hours or x amount of dollars for that always lingering situation that might bite my behind. An experienced operator can get a bunch of work done in one hour with the right machine so I feel those prices are fair.
It might look better on the estimate if you didn't itemize the rental, p/u or delivery & estimated extra operator hours. Just detail the work to be done and give them one price. It also helps if you have an idea what other companies would charge YOU for the same job. It doesn't hurt to get an extra quote or 2 so you know what an average should be.
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Old 02-01-2008, 11:12 AM
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We rent lots of equipment! With that being said, we charge the rental price and add our labor to it just like you Sandim. 1man x hourly wage + rental($250 daily). I know that doing it this way I lose some jobs. I hear people say, a rental costs that much?
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Old 02-01-2008, 12:13 PM
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You may lose some jobs 4seasons, but when we lose jobs for price we're of the mindset it's not worth it, and that the clients just don't have the money to begin with. We work our tails off to ensure our clients have the best product we can deliver and we feel the prices are worth it, and we know for a fact our prices are competitive and our work is pretty high quality. We've also figured out that clients definitely understand that they're getting what they pay for. Of course, luckily, we work in a relatively upper class section of the state. Seems like most of our clients that want a job done that warrants equipment being rented realize it costs money.
That being said, I think I agree with Fine Edge that a good operator can accomplish a lot of work in a shorter period of time, so I may play around and try to factor that in.
Decisions, decisions. I envy you all who've been doing this long enough that you no longer have to second-guess yourself (or at least not as much).
As always, thanks for the input!
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Old 02-01-2008, 03:44 PM
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Quote:
Originally Posted by sandim View Post
I envy you all who've been doing this long enough that you no longer have to second-guess yourself (or at least not as much).
As always, thanks for the input!
I dont think that ever happens. I have an excel sheet for my maintenance bidding that literally takes the thinking out of my proposals and there are times where I override the computer's results based on my gut (2nd guess).
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Old 02-01-2008, 05:21 PM
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Well, if second guessing still happens to you all then I guess it's not so bad. I guess if I am constantly thinking and re-thinking things it means I'm paying attention, learning and hopefully growing my business and my profit.
An excel spread sheet for maintenance bids huh? I was thinking of a spread sheet to track profitability (not sure yet if quick books can do that) but it would be nice to have something like that for maintenance as I'm never sure how much to charge. Guess maybe I should try to figure one out.

Slightly OT but what an awesome forum this is! Opinions, ideas. I really want to dot my "i"s and cross my "t"s and this forum helps. Much thanks
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Old 02-01-2008, 06:14 PM
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We run across this problem all the time when we need an excavator. I have found it is better for everyone when you can sub out a small part of your job.When you bring in someone you trust and can work with the numbers can stay low. Forexample if you rent a backhoe for a day after all the math it can be over $600. and you still need to opperate it. In times like this we can call some one in for the day not have to transport,fuel,or opperate and it will coast less, now thats for digging other needs may differ.
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