What to charge for your own equipment by the hour

A rental yard quotes a day rate, and the truck in your yard has no rate at all, so the job that used it pays nothing and the shop pays for it later. What a machine you own costs per hour isn't a number you can look up, and neither is what to charge for it. It depends on what the same machine costs to buy new today, how long you'll keep it, how many hours it works in a year, and what you spend on repairs, fuel, insurance and moving it to the site. A rental yard's rate, a chart or a blog post doesn't know any of that. Without your own rate, the job is charged nothing or a guess, and the next bid is built on the same number. The fix is the equipment cost basis in chapter 2 of CONTROL, which builds an hourly, daily, weekly and monthly rate for each machine from your own costs.

The step is number 02, equipment cost basis. A correct internal rate per machine covering ownership, maintenance, fuel, and transport, charged to the projects that used it. It's drawn from chapter 2 of CONTROL: C.F.O.S. Construction Financial Operating System.

Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% after taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.

List every machine and truck and write down what the same one costs to buy new today.

Charge your own hourly rate for that machine times 3, then add the operator, the cost of moving the machine to the site and back, and your minimum charge. The hourly rate comes from what a mini excavator costs to buy new today, the years you'll keep it, the hours it works in a year, and what you spend on repairs, insurance and fuel. A rental yard's rate or a rate from a blog is someone else's cost, so it can't tell you what yours is.

Use the hourly rate for that skid steer times the hours it works, then add the operator and the move. A machine parked on site still costs you its ownership every hour, so decide before the job whether waiting hours are billed.

One hour rarely pays for the move. Getting the machine there and back costs the same for one hour as for eight, so a short job needs a minimum charge or a move charge on top of the hourly rate. Build the minimum from your own move cost, not from a guess.

The move costs the same either way. Hauling a machine to the site and back is a fixed cost, and a 3 hour job has fewer hours to spread it across.

Use the weekly rate from your worksheet, not 7 times the daily rate or a guess from the hourly rate. The cost basis worksheet in chapter 2 produces an hourly, daily, weekly and monthly rate for each machine. A rental year has more rental months than a calendar year, and the 13 month rule explains why that changes the rate you quote.

Charge the truck the same way as a machine: its own hourly rate from replacement cost, years, hours and running cost, charged to the job it worked on. The driver is a separate labor cost, so add the driver's wage with labor burden on top.

No. A rental yard's rate includes its own margin, its own fleet and its own risk. Your rate is what it costs you to own the machine and keep it working. Use yours to find what a job costs you, then price above it.

Start from what the same machine costs to buy new today, not what you paid for it. Spread that cost over the years you'll keep it and the hours it works each year, then add repairs, insurance, fuel and moving it. The worksheet in chapter 2 of CONTROL does the math for every machine and truck.

You can try, and it doesn't hold. Step 02 depends on step 01, job cost structure. Install it ahead of that and it produces numbers the field won't trust, which is worse than the problem you started with.