Rolla Posted:
Slightly off topic but I believe a firm carrying out big TDs and has a **** load of big equipment bucket trucks,18''chippers ,big trucks,etc etc,,can price there jobs up cheaper than a firm with regular kit climber mid size truck climber and average size chipper anyone agree or disagree??? p.s i have never really done the math on this so its purely guessing
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I agree they should probably be able to gross more, but their net profit might by lower because of their overhead.
Here is my theory and the numbers I crunched last night. Let's say I want purchase a new chipper in three years. I set a replacement value at $30k. Over 3yrs that would be 10k a year. Now, for numbers sake let's say that this chipper could be billed for 1hr/day, 5 days a week which means 260 hrs billed a year. Remember, this is for numbers sake and everyones usage will vary. For newer companies this could be a tough number to determine because you don't have experience on your side. Okay, so you need 10k a year divided by the 260 billable hrs/yr to come up with 38.46/hr. That is just for the machine and does not include maitainance or fuel, but you get the picture. Now, if I can bill this chipper out for this many hours a year, for three years, you now have 30k to invest in a new chipper, cash,no financing needed. If I missed some things, please point them out cause I'm here to learn.