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Hourly cost

Discussion in 'Business Fundamentals' started by 7441aaron, Aug 8, 2011.

  1. 7441aaron

    7441aaron Junior Member
    Messages: 17

    How do I come up with an hourly cost to operate? I can come up with the cost of equipment lump sum but I don understand how you figure that in to how much an hour. Also how do you guys figure your fuel consumption an hour, breakdowns, maintenance, etc.?
  2. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    Most of what you are looking for is the law of averages. Fill up your equipment, use it for a couple hours, refill, divide fuel amount by amount of hours worked, do this a couple times and you well soon get a average cost per hour to run that equipment. Same with maintenance, take the cost of servicing your equipment, divide it by the amount of billing hours you run this equipment, and you have a idea of how much you need per billed hour to pay for a service. Repairs are a bit more tricky being that you don't know when/where/how your equipment well fail, for that I usually add 10-15% on the top. Monthly costs are fixed, so again, fixed costs per month/divided by billied hours, and there you go. Average these things out over 4-6 months and you well have a pretty good idea what costs are for you per billied hour. After that add in your wage and profit margins and you should be set.
  3. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    What did we do before the internet? We had to make mistakes and LEARN from our mistakes......

    Well, here ya go......... enjoy!

  4. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    First time I've ever seen that. Very cool Thumbs Up
  5. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,823

    Having your expenses figured out exactly is the key to your success, spreadsheets are key. And when calculating all of this, I always assume the most realistic worst case scenario.
  6. ANA Proscapes

    ANA Proscapes Senior Member
    from NH
    Messages: 109

    X2. I've been looking for something like that for a while.
  7. Wayne Volz

    Wayne Volz Senior Member
    Messages: 694

    We offer what you are looking for

    WE have a spreadsheet CD called "Know why you charge what you charge" that calculates cost per hour of operation based on your company's overhead, expenses and use-rates. It is simple to use and you can use it for any service you offer.

    Call us if you have any questions. You can also order on-line at www.profitsareus.com

  8. NickT

    NickT Senior Member
    Messages: 707

    Wow lots of info here what would I do without plow site??? Thx for honesty and integrity fellas