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How to profit from machinery

To get the job done we often have to invest in various tools and equipment. We shouldn't, however, provide this equipment at our own expense and let clients benefit without compensating us for our costs.

Although many clients will want to keep their expenses down many will understand that there is a cost involved and be happy to pay you for providing the equipment to do their job.

As a business you need to at least break even on your capital expenditure and more favourably make a profit.
Lets us take charge-out rates for a lawn mower as an example: you can however apply the same principal to any machine you own and use whilst undertaking a project.

Let's assume the cost price to buy a mower is £1,000 (change the cost to suit your own situation).

If you are good with numbers and keeping records then you can really make this work by keeping an accurate log of how many hours you use your mower in any one season.

If you are too busy for the extra admin, you will have to take a view.

The mower has cost us £1,000 and it is hoped it will last us a minimum of three years.

Ideally we want to recover the cost of our £1,000 outlay in year one and then put away the charge-out revenue in year two to buy a new machine outright.

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  • 100hrs a year ?

    a thousand hrs = £1 an/hr so for me its £10 an hr capital cost for new machine.inc depreciation obviously.

    so 2 yrs = £5 an hour... less end sale cost , plus servicing and fuel / repairs etc.

    so £5 say plus hourly rate is £25 an hr - plus travel.

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