Equipment Maintenance Question

[jvblack82]

My question is about billing and paying for equipment use and maintenance. Of course if you have to rent something for a job you bill for that. If you're using all your own equipment is it normal to charge an equipment fee to cover maintenance and purchase of new equipment or should that just be built into the job labor fees? I don't want to add it and then loose bids because we have a line item for equipment and the next guy just built it into something else. If it is a normal thing what should you charge? Is there a percentage that you would do? Thanks, Joe

[SECTLANDSCAPING]

Lawn care business tips

Put it in your overhead. You wouldnt invoice that you rented the equipment, would you?

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South Eastern Connecticut Landscaping /Lawn Care /Pressure Washing /Snow Removal /Gutter Cleaning
52" Brutus/52" Super Surfer/44" Pro Line/60" ZMaster
EB630/EB802/EBZ7150/EBZ8000/BR400/Billy Goat 8Hp
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Case 1816 Skid

[Cashin H&P]

I usually add a 15-30$ charge for equipment charge depending on what I am doing. I put it in my quote. If they ask why there is a charge for that I simply tell them that It pays for the gas and any maintenance that I have to preform. I am sure I could make it more but the 15-30 usually does cover every thing.

[jvblack82]

Cashin I like the flat rate, I can dig that. I guess I would ask though do you put that on all jobs. For example, does that go on your regular maintenance jobs or is that just on clean ups or bigger jobs?

In my head the idea I'm coming up with is tiered equipment fees.

<$200 no fee, don't want to charge the old lady we're billing $30 per service a $15 fee for equipment.

$200-$500 - $15
$500-$1000 - $30
and then keep adding $15 for each additional $500. Bigger job uses more equipment and generates more maintenance or likelihood of needing to replace.

Does that sound reasonable. I'm just pulling this out of thin air based on your $15-30 idea.

[Steve]

I think the ideal way to go about this is to take the piece of equipment's price and add all maintenance costs for that total period of time to it.
Then take that number and divide it by the number of hours it will be useful for.

You then get a figure that needs to be covered every time that piece of equipment is being used.

Figuring out these costs may seem overwhelming at first, but you need to know where your money is being spent or all your estimates will simply be guesses.

I wouldn't include an extra line item for this in your invoice.

Your invoice should simply be a break down of services or materials provided. The cost for the service should include all your costs plus your profit.

Does this help?

[mcscapes]

Steve is spot on,I depreciate my equipment on a two year schedule cost of machine/52 wks multiplied by 2= don't forget your truck trailer and hand tools

[Fisher]

Steve's method is pretty much the way I figure my cost in. I pretty much figure out what would be an hourly wage for different pieces of equipment.

If I rent equipment, I will bid/invoice it that way. I actually just submitted a bid on Tuesday that itemized a four day rental on a mini excavator + 25%. I added the 25% for rental mark up since I wouldn't be able to charge the hourly rate and minimum as I have on my other bigger equipment. I know I'll need this on site for at least three days even if it's only being used very little and I can't bill for hours that equipment isn't being used to cover the cost.

[Steve]

I actually just submitted a bid on Tuesday that itemized a four day rental on a mini excavator + 25%. I added the 25% for rental mark up since I wouldn't be able to charge the hourly rate and minimum as I have on my other bigger equipment.

Can you explain this more, what do you mean by your hourly rate and minimum? Also how do you figure when you can and can't charge that?

[Fisher]

Larger equipment I simply have hourly rates for from $55-$65 with a three hour minimum. Ever buried a horse? Takes about 15 minutes, takes longer to load and haul machines sometimes than the job itself. I simply can't charge the hourly rate or minimum If I have to rent a $300+ per day machine and only charge for 4 hours that it may have actually been used.

[Steve]

That's a very interesting service. I had seen it done before by a larger backhoe but never thought about how much is charged for the service. I would think (3 x $65) = $195 to perform that service is not bad at all!