Equipment usage costs passed on to customer question

Status
Not open for further replies.
S

sw_ross

Senior Member
Location
NoDak
Recently I bought a small trencher.
Owning it allows me the convenience of not having to rent since the rental place is about an hour away from me.
Owning it also allows me to take on jobs that I wouldn't normally pursue because of the challenges of getting and returning the rental.

I feel like the purchase is like any other tool that is in the arsenal and is used in the performance of completing a job.

Obviously I need to cover the expenses related to owning the "tool".
I'm just wondering how best to charge out for the usage of this tool.
I'm a one-man shop and probably won't use the trencher a ton. It's nice to know I have access to one and that I can bid on jobs that I wouldn't normally pursue because I have it.
If you own equipment (scissor lift, trencher, etc) how do you address passing on the expenses related maintenance costs?
 
You can specifically itemize the use of said equipment on billing documents or you can conceal it in added labor or additional markups.

Some may charge a straight fee per foot for trenching, others might add that fee per foot to the materials that will be installed into the trench.
 
petersonra said:
I would suggest charging the project internally whatever it would cost to rent. I think you will find that over time unless you actually use it a fair amount rental costs you less overall.
Click to expand...
I agree that over time it would be cheaper to rent- if there was a rental place closer to me.
An additional deciding factor was somewhat financial- I needed a write-off for tax purposes.
 
kwired said:
You can specifically itemize the use of said equipment on billing documents or you can conceal it in added labor or additional markups.

Some may charge a straight fee per foot for trenching, others might add that fee per foot to the materials that will be installed into the trench.
Click to expand...
I like the idea of using a "per foot" charge!
 
Do you normally include charges for other tools you own, like lifts, storage trailers, and ladders, or is all of that built into your normal overhead?
But sometimes people expect to see charges for extra-ordinary equipment like lifts and special test sets, take advantage of it when you can.
 
sw_ross said:
I agree that over time it would be cheaper to rent- if there was a rental place closer to me.
An additional deciding factor was somewhat financial- I needed a write-off for tax purposes.
Click to expand...
the extra couple hours to go get the trnecher from the rental place is a legitimate thing to charge to the project.

you can decide to charge anyway you want. there is no reason you have to break out your charges at all. you can just summerize the work and offer a price for the work all inclusive.

the important thing is that you know what it actually costs you so you can cover those expenses somewhere.

by the way, i have been told maintaining small trenchers is not as simple as it might appear, and it may not be something you have people to do. having a mechanic come out to service it periodically is not real cheap.
 
We had a recent discussion related to this.... see my post in this thread



Passing on equipment rental costs to customer

When you need to rent a piece of equipment for a specific job task because you don't own that piece of equipment do you just pass on the costs of the rental plus additional related costs associated with the rental (insurance, etc)? If you're putting together a bid for a job would you include...
r.tapatalk.com

I would charge for it.


Sent from my iPhone using Tapatalk
 
Absolutely. If you're not renting it, you're buying, storing, maintaining, and transporting it.
 
Trenching is a per day bill you ask me.
You got to warm up, inspect, load your tool.
You got to inspect, fix, and clean your tool.
That’s how many hours on average?
Then travel.
And your not accomplishing any of your electrical your installing with this time.
 
We charge by the foot. One EC in the area subs all his trenching out, pro to that is your not responsible for them hitting any lines.

Seems like this time of year we use ours about once a week. So I think you’ll make your money back in a couple years, now if you do not trench a lot you will not. All the home we do have peds so every house we do as trenching needed.


“ shoot low boys their riding shetland ponies”
 
I would charge exactly the same amount that it would cost me to use a rental. This would include rental cost plus labor time to get and return said item plus consumables (if any). If you choose to break out the price on your invoice, calling it tool rental is fine. You are renting from your company's in-house tool rental division.

Assuming your competition has to rent tools, your costs will be comparable. To gain a competitive advantage, you can avoid charging the travel labor portion and still cover the cost of ownership of the machine plus the profit for supplying the machine.

The one thing you do not want to do is provide this machine to a client for less than it costs you just because you own it. That's a foolish reason to lose money on a job. Whether you own or rent the equipment is really not the client's concern.

ETA: I would not own equipment that is not used frequently. It probably would end up costing more to maintain than it saves in rental costs.
 
Last edited:
AKElectrician said:
Trenching is a per day bill you ask me.
You got to warm up, inspect, load your tool.
You got to inspect, fix, and clean your tool.
That’s how many hours on average?
Then travel.
And your not accomplishing any of your electrical your installing with this time.
Click to expand...
same for all tools. Just so happens a screwdriver doesn't cost as much to maintain, though it's cost does go up if you are prone to damaging or losing it a lot.
 
Status
Not open for further replies.
Top