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cost per hour per truck

Discussion in 'Commercial Snow Removal' started by bribrius, Nov 3, 2007.

  1. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609

    does anyone have a formula for this? not how much it makes but how much it COSTS.

    i basically figure a hundred a hour and if it doesnt make that then im probably losing money.

    just wondering. im thinking like purchase price - current trade in value divided by hour meter plus gas mileage plus insurance (figured per hour) and maintaining and plow depreciation (3000 every four years divided by the four and 365 and 24?) i dunno. maybe im putting too much into this. just wanted to know. course most can be deducted as expenses but thats a whole other issue.

    just wondering what people used.
     
  2. Italiano67

    Italiano67 Senior Member
    Messages: 639

    Most lowballers dont have a clue about what you just mentioned. With everybody scratching for a buck they are only looking at now not the future of their truck costs. Thats the problem in my area.
     
  3. PremierLand

    PremierLand PlowSite.com Addict
    from detroit
    Messages: 1,572

    I dont know if this is right, but it seems right.

    Just to pay a $30,000 truck off in 3 years, averaging 12 pushes per year at 12 hours per storm, you would be looking at $69.45 per hour, not including insurance, fuel, repairs, oil changes, tires, etc. etc. not to mention your time/labor, etc..

    I figured mine out once and It was around $112 per hour per truck with a shoveler in the truck.
     
  4. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    Yeah

    just to be blunt

    add up all you expenses, we keep our trucks birth to death

    divide by all your hours
    now the questions. . .

    is it a pure plow truck does it have other duties throughout the year

    is a snowthrower included or is it costed out separately

    keep track of every pertenant detail and expense

    we hold data back 18 years, costs have pretty well doubled in that time
     
  5. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

  6. jbone

    jbone Senior Member
    Messages: 154

    thanks for the link.
     
  7. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,454

  8. T-MAN

    T-MAN PlowSite.com Addict
    Messages: 1,363

    Amen to that.
    Sounds like a good job for Bri.
     
  9. Snowpower

    Snowpower Senior Member
    Messages: 636

    I have never sat down and figured it out to a T, but my work truck costs me very close to 25 dollars a day to operate, basically.
    Im not sure how you fellas are coming up with such high hourly operating costs, unless the only thing your vehicle ever does is plow snow. Which I know isn't the case. Many of these are personal vehicles with plows on them. Vehicles used to generate income from other sources be they Construction, Landscaping etc.

    I dont charge what I charge or bid snow service because its what I NEED to make like is so often thrown around here. I charge a fee based on what the job is worth because this is an emergency service that in my case is being done by an experienced responsible professional. I also used what was the predominant figure per hour for the vehicle I have that the other pro's are using or close too. Close enough that the differential in the decision making should be presentation and the tangible differences that set you apart from the competition and that make you a more attractive purchasing decision.

    Its not that people dont know what it costs them to do this service, its the people that dont realize what the service is really worth, and that sell themselves short because they are not experienced.

    Problem is that over time it is and will redictate what this service is worth in the marketplace.

    eh.....end rant/
     
  10. doh

    doh Senior Member
    Messages: 252

    Most "Low Ballers" don't have a "Shiney New Truck" with payments, Most "Low Balers" have another job, other than plowing.

    I have been doing this for 15 years, as a second job. My truck is payed for so it is just my time.

    I have never looked to steal contracts from anyone who makes a living from this, but they are looking to steal fun money from me.

    What all this "Low Baller" stuff says to me, is all the "Stuff" you say is not worth while, is suddenly worth much much more.

    How does Cabin roads, @ 300/ hour sound? Ice Roads @ $500/hr?. Lone driveways @$250 per push?

    No after 15 years, I try to keep up with the "Going rate" I never try to leave $$$'s on the table. But the professionals's want to move in on my little side game.

    Sorry the gloves are off, and my expences are way less than other's. .
     
  11. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    No they aren't.:nono:

    You just think they are.
    I'll give an example. Above, you allude to your "truck being paid off"
    Ok, but what happens when your truck breaks down?
    You still have to pay to get it fixed
    The more you plow with it, the less it's worth (older, more mileage, etc)
    You have to recover those costs.
    Your truck has maintenance expenses (oil, transmission fluid, assorted annoying things breaking, tires, etc), all those have costs that have to be accounted for with each and every mile it runs.

    And, at some point, you will have to replace the truck. Have you saved up the money from the plowing to replace it? That too is a cost.

    Many of these "my expenses are lower" are not counting the cost of replacing their equipment and at some point it will need to be replaced. That's why people go out of business, they make a living for a few years, but then they don't have enough money to keep going.

    Actually bigger companies can actually lower their expenses over the one guy operation. They hire their own mechanic, they buy fuel in tanker truck loads, they take depreciation over many vehicles, they can borrow money cheaper, they get better insurance rates, etc. It's called economy of scale and it's a common thing in capitalism. It doesn't work as well in service industries, but it does work.
     
  12. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    $25 a day

    is that each and every day, snowplowing days? In fuel alone?

    we'll go through $60 of diesel fuel per truck per session and $600 per month depreciation each truck

    Sometimes the local 'worth' is less than cost of operating
     
  13. Snowpower

    Snowpower Senior Member
    Messages: 636

    Thats spread out over 365 days. Depreciation or vehicle cost, interest, insurance, fuel, and anticipated (or actual) repairs.

    It can be higher than that or lower than that. That is an average.

    Now that number is increased when plowing snow obviously. I know I burn up to 10 dollars an hour in fuel plowing for example.
     
    Last edited: Nov 4, 2007
  14. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,045

    If the truck is your daily driver and you need a truck anyways, how can your costs not be lower. Plowing snow isn't that hard on your truck unless your an animal with it. Don't you still have to maintain your daily driver Brib? I know the insurance and gas are there but spread the price of a plow over 10 years and how much is it really costing you? Fill up with gas before you start plowing and when your finished, track your exact miles actually plowing snow, I think you'll be surprised. I'm not sure how many plowable events you have Brib but to say you just break even at 100/hour is unbelievable, JMO I would never do anything cheaper then the going rate, even if it was my daily driver.
     
  15. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609


    guess i look at it this way dude. this is my life. . the chevy i paid cash for with plow. it had low miles so i figured it was worth it 13k (maybe). by the looks of it im taking over my buddys f250. i dont think i can pass up on the price. my girlfriend still wants a damn jeep. even if i get her a used one im looking at 9k or better for anything decent. we still have a car too thats only a couple years old and i like the gas mileage so im not getting rid of that. all i really NEED is one truck to tow boats, plow, drive to the regular jobs. realestate is going down the tubes which is great if i had the capital to buy out foreclosures with cash but i dont. since i do loans im seeing the downside of the crash. id go back to playing the stock market but after the hit i took last year im not sure if thats a good idea at this point. another side business isnt a bad idea even if plowing wont pay what that did i can entertain the thought of it growing into a full fledged business and if it paid some stuff before i shut it off then least it accomplished something. (i still work the warehouse job too). money wise we survive. but nothing in my house can live for free. they all need to earn their keep. i dont plan on depreciating a plow over ten years any more than i would a vehicle in my head. i pay out money for it today i dont want to wait years to get it back. hell i have my little building here on a fifteen year note and that seems like its taking too long and im half way through it. like i said we arent wealthy or poor but i cant give slack here either. it isnt even just the money its the TIME. there is only so much time and if everything is on long term ill never be where i want to be. i basically dont own anywhere near enough and as far as im concerned if i have any payments on anything i dont own it the bank does. i want my money back for this stuff as quick as possible and have it running in the green. now if all i really need is one truck. plowing needs to flip the expense for the rest of any vehicles we have or get except the car which i can associate with her transportation for income at her employment. so how long do you think it should take to get the cost of equipment back? i figure if the truck is blowing a tranny in three years i should recoup as much as i can of the initial purchase before then. add to that the fuel costs insurance etc. etc . etc.
    now what is my time worth? i dont work for under twenty five a hour. period. i just dont. thats without the expenses. if i wanted to live like i was on welfare i would have went on welfare instead of always working two or three jobs. if im draggin myself out at one am plowing then i expect to make a little more than that. im not looking for chump change. i spend two hundred a week in coffee, cigarettes, and take out. (no joke) and thats normal for me. so you think im going to drop a blade to make ten dollars a hour? you could say im making more than that at a hundred bucks a hour but thats only if everything is on a "walmart layaway plan" or something. i dont have my budget on a walmart layway plan. (for all those who thought i was a lowballer take note here). i need things paid off so i can get some commercial property like some of you have so i can get a fulltime business up and running. ive had offers of partnerships but ive been down similiar roads enough to know only one person fits in the drivers seat. do you understand where im coming from? i just dont have time to play games. im not sure how else to put it. either plowing will work or it wont and if i have to put things on extended plans and count pennies for profit it isnt working. maybe its just me. i still have lots to learn.
     
  16. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    I think Brib has a fundamental confusion here.

    JD Dave is speaking about the costing of the plow. ie how many useful hours will the plow last. Possibly 10 years @ 200 hours per year, plow price $6000, divide by 10 divide by 200 produces $3.00 per hour. Brib appears to be talking about profit and doesn't want to wait that long to 'pay off' the plow. Costing and paying off aren't the same thing. Costing relates to expense. pay off relates to cash
     
  17. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609


    yes. and no.

    viewing a purchase from a position of its useful life is "life cycle cost analysis". although a useful tool to provide to a lender in business expenditure it is almost impossible to realistically calculate (every expected maintainance must be in it). It is of about the same relevance as depreciation which is wonderful for irs purposes but not a legitament tool for actual operation of your business to really understand if your profitable. (just my opinion). reason i say this is if you do a cost benefit analysis or a life cycle you are planning on everything else "being equal" for the extended time frame dictated in your analysis. i see this more as a gamble or justification than a real accounting of a capital expenditure. im not a fortune teller and have no idea what things will be in ten years do you? what bri is refering to is costing as in return on capital which the quicker the better. even if the money isnt borrowed from a lender it is still borrowed from myself per say. the same monies could be used in other investments or gaining interest in a account. you can run a cost analysis on anything however if it isnt based on a short term and you dont have every single related expense (can of fluid film?) figured in im not sure how legitament it would be. it would be the equivilent of forcasting income five years out which of course is not possible since everything changes.
    i see premierlands post closest to what i was looking for. it provides for a return of initial investment. which is a return on capital and directly related to any expected profit margin. it also allows for a asset which has value at the end instead of a life cycle which contends that at the end initial investment ends in no asset value. furthermore it provides that the capital isnt tied up for ten years which of course would be a whole other comparison relating what other purpose the monies could be used for and at what growth rate because that would have to be deducted in a cost benefit to really know if it is a prudent purchase.


    too funny. :)
    thanks everyone. appreciate it.
     
  18. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    now it is revealed

    You're not talking about cost accounting
    You talking about oppertunity costs, where to place your limited resources to gain maximum benefit (speed of ROI, risk, amount)