Hourly rates for 13/14 ton Excavator

Discuss construction equipment here

Topic author
Nick Drew
Posts: 5422
Joined: Tue Jun 12, 2007 10:10 pm
Real name: Nick Drew
Has thanked: 437 times
Been thanked: 208 times

Hourly rates for 13/14 ton Excavator

Post #1 by Nick Drew » Sun Oct 14, 2007 4:20 pm

Hi All,

This question is primarily aimed at our UK members ;)

I am trying to find out how much too charge an hour for a 13.5 ton excavator but am not having much success in finding out :dizzy: Its like its some kind of top secret that nobody wants to tell me :roll: perhaps they are all worried I will go in and undercut them!!

So does anyone have any idea??

Nick :thumbs_up:


Robban_C
Posts: 634
Joined: Sat Jun 23, 2007 9:27 pm
Real name: Robert Carlsson

Re: Hourly rates for 13/14 ton Excavator

Post #2 by Robban_C » Sun Oct 14, 2007 6:59 pm

Nick Drew wrote:... perhaps they are all worried I will go in and undercut them!! ...
Yes they are. If you ask such questions you might say that you are not interested in undercutting your competition and that your pricing will be in the higher area.

I can´t answer your question but I can give some advice in case you didn´t have this in mind (which you probably already have):
Make sure your pricing isn´t to low. I know that you are eager to get as many jobs as you can but don´t sell yourself to cheap. No one will thank you for that and as you know the machine costs a lot to run.
And it is very difficult to raise the prices once you have started with to low pricing! Very difficult!

Can you call some of your competitors and act as a potential customer? Let´s say that your "theater" goes like this:
Hi! I´m Mr Smith, I´m thinking of building a pool. I need to know what size excavator I need to hire and what the hourly rate for such an excavator would be? Adjust it to something that makes sense where you live.
But it has to be competitors that don´t recognize your voice or you will look like a real fool. And don´t use a phone whos number can be seen at the competitors phone!
This method is actually a little doubtful. I have never used it myself but I have had a few phone calls where a "customer" asks to much strange questions.
A friend of mine drivin an EC 35 just like I do got one of those phone calls. The "customer" asked what the pricing would be for a foundation (usually around 1500 SEK / m2). My friend answered "400 SEK / m2". We haven´t heard anything from that "customer" since then. :mrgreen:


Maybe you should consider fixed prices? But that usually means that you do more than just drive your excavator. An example could be that you make a complete foundation for a house, not only the digging. My experience (although I have very little experience) is that complete jobs pays better than just digging. Such jobs is usually priced by using standard pricing measured by the area (like my example above), length, volume etc. But you still have to find out what the prices should be. And don´t forget that a customer often wants those small extra things such as a hose under a foundation for venting radon gas (is that the right word?). All extras cost extra and they cost a lot extra! This is where you start earning money! :thumbs_up:


And a truck load of good lucks with your new machine! We expect lots of pictures and videos. :thumbs_up:
Volvo EC45 PRO -06
Volvo EC35 -01
MB-Trac 800 turbo
Bigab 10-14 hook lift trailer
MF 3165, Poor Ferguson

Youtube: http://www.youtube.com/user/RobbanxC


Topic author
Nick Drew
Posts: 5422
Joined: Tue Jun 12, 2007 10:10 pm
Real name: Nick Drew
Has thanked: 437 times
Been thanked: 208 times

Re: Hourly rates for 13/14 ton Excavator

Post #3 by Nick Drew » Sun Oct 14, 2007 7:39 pm

Thanks For the advice Robban,

Yes we have been thinking about calling some of the competition but as you say this can be difficult :roll:

This is the difference between just driving for someone else and trying to run a business yourself!! This is the problem I face...I am pretty good at my job but I am not naturally a business man :cry:

I must try harder to be ruthless :twisted: ;)

Nick :thumbs_up:


Robban_C
Posts: 634
Joined: Sat Jun 23, 2007 9:27 pm
Real name: Robert Carlsson

Re: Hourly rates for 13/14 ton Excavator

Post #4 by Robban_C » Sun Oct 14, 2007 8:15 pm

Nick Drew wrote:... I am not naturally a business man ...

You will be as soon as your stomach begins to tell you that you are starving. :mrgreen:

Can you call someone far from where you live? Someone that definitely has not heard about you.
Or will your accent tell them that you are not from their place?
Volvo EC45 PRO -06
Volvo EC35 -01
MB-Trac 800 turbo
Bigab 10-14 hook lift trailer
MF 3165, Poor Ferguson

Youtube: http://www.youtube.com/user/RobbanxC


Topic author
Nick Drew
Posts: 5422
Joined: Tue Jun 12, 2007 10:10 pm
Real name: Nick Drew
Has thanked: 437 times
Been thanked: 208 times

Re: Hourly rates for 13/14 ton Excavator

Post #5 by Nick Drew » Sun Oct 14, 2007 8:23 pm

Yeh Maybe !!


Robban_C
Posts: 634
Joined: Sat Jun 23, 2007 9:27 pm
Real name: Robert Carlsson

Re: Hourly rates for 13/14 ton Excavator

Post #6 by Robban_C » Wed Oct 17, 2007 8:15 pm

No one is answering except for me and I´m mostly spamming. :D
Where are the rest of you? Are you sleeping? :mrgreen:

Nick, have you found your rates somewhere else?
In case you you would like to we can discuss how to calculate the rates but such a discussion will probably only give you some ideas, not an exakt number. But the ideas can always be matched to the numbers you might hear among your competitors.

//R.


Edit: I didn´t know plain English could be spelled that bad! :mrgreen:
Last edited by Robban_C on Wed Oct 17, 2007 8:48 pm, edited 1 time in total.
Volvo EC45 PRO -06
Volvo EC35 -01
MB-Trac 800 turbo
Bigab 10-14 hook lift trailer
MF 3165, Poor Ferguson

Youtube: http://www.youtube.com/user/RobbanxC


Topic author
Nick Drew
Posts: 5422
Joined: Tue Jun 12, 2007 10:10 pm
Real name: Nick Drew
Has thanked: 437 times
Been thanked: 208 times

Re: Hourly rates for 13/14 ton Excavator

Post #7 by Nick Drew » Wed Oct 17, 2007 8:35 pm

Robban_C wrote:No one is answering except for me and I´m mostly spamming. :D
Where are the rest of you? Are you sleeping? :mrgreen:

Nick, have you find your rates soemwhere else?
In case you you would like to we can discuss how to calculate the rates but such a discussion will probably only give you some ideas, not an exakt number. But the ideas can always be matched to the numbers you might hear among your competitors.

//R.


Hi Robban,

Yeh seems very strange here the last couple of days, hardly any new posts and not many new members .....Where are you all !!!! :(

I have a close friend who is going to phone around to get some idea of rates, but in the UK rates tend to change from region to region so it will only be a rough guide :dizzy:

Nick


martyn williams
Posts: 6393
Joined: Mon Nov 03, 2008 8:06 pm
Real name: MARTYN WILLIAMS
Location: South Wales
Has thanked: 296 times
Been thanked: 359 times

Re: Hourly rates for 13/14 ton Excavator

Post #8 by martyn williams » Wed Oct 17, 2007 8:40 pm

Hello Nick
At a guess I would say £50/£75 per hour.You can shift a lot of muck with a 14 ton excavator.You would have to take into account,depreciation of the machine,fuel consumption,what you as an operator would call a good hourly rate for yourself.Its a big gamble,one brake down and you could be off hire,you could blow a hose,cost of replacement plus oil plus labour.Charge too much and you dont get the job.
Good luck
Martyn


Topic author
Nick Drew
Posts: 5422
Joined: Tue Jun 12, 2007 10:10 pm
Real name: Nick Drew
Has thanked: 437 times
Been thanked: 208 times

Re: Hourly rates for 13/14 ton Excavator

Post #9 by Nick Drew » Wed Oct 17, 2007 8:57 pm

b100 wrote:Hello Nick
At a guess I would say £50/£75 per hour.You can shift a lot of muck with a 14 ton excavator.You would have to take into account,depreciation of the machine,fuel consumption,what you as an operator would call a good hourly rate for yourself.Its a big gamble,one brake down and you could be off hire,you could blow a hose,cost of replacement plus oil plus labour.Charge too much and you dont get the job.
Good luck
Martyn


Hi Martyn,

Well it saddens me to have to report that I have been contacting potential customers and asking for in the region of £23-24 per hour and they are still telling me I am asking too much!!

I have to be honest I am starting to wonder if it is worth the hassle !! I can earn £12-15 per hour just as an operator with none of the grief of being in business!!

Nick :dizzy: :insomnia: :roll:


Robban_C
Posts: 634
Joined: Sat Jun 23, 2007 9:27 pm
Real name: Robert Carlsson

Re: Hourly rates for 13/14 ton Excavator

Post #10 by Robban_C » Wed Oct 17, 2007 10:22 pm

Nick, Nick, Nick, we have to discuss this! 23-24 where is that sign on the keyboard?

I think Martyns rates seem alright.
I think Swedish rates is about 6-700 SEK per hour. That would make less than 50 £ (found it! :thumbs_up: ) per hour but Sweden is probably a cheaper country to live in. And I´m always amazed that their business runs well at those rates. I charge 500 SEK per hour for my 3,5 ton machine and I´m not the most expensive guy in town. A friend of mine charges 550 for an EC35 with rotortilt and long shaft, everything else is the same as my machine. Another one charges 496.
Your potential customers are obviously trying to rip you off. (is "rip you off" the right expression?)

Let me try to make an equation for you:
Start with calculating each row separately:

*How many hours per year do you expect to run your machine? I would say absolutely maximum 1500 hours, probably less as you have to make maintenance, repairs etc. 1000 hours is to little, 12-1300 hours seems reasonable.

*What would your own wages be per hour? You say £12-15 per hour. (now I see that you put that "money sign" before the digits. I´m learning English all the time here :thumbs_up: ).
Don´t forget to check if there are any extra taxes that you have to pay!
*What is the estimated annual loss of value on your machine with equipment? I would say that it´s almost £10 000 per year. Yes. I know that it means that your machine loses all its value in five years but as you don´t know the value when you sell it you have to count this way. That´s the way they do it in the economics world. I think it´s called "writing off" in English in the economics world. Writing off is the economical term for annual loss of value. Divide the annual loss of value with 1500 (or 12-1300 hours per year) to get the hourly loss of value. In case you have bought the machine by borrowing money from the bank you have to pay the loan back. If this and the interest is bigger than the annual loss of value you should use those numbers instead.
*Another economical point of view:
Let´s assume that you didn´t have to borrow money to buy the machine. Let´s assume that Rich Nick :D already had £50 000 to buy his excavator cash (I did that :mrgreen: ). Another option would have been to put the money at the bank and get payed some interest per year. In that case "Rich Nick" would "lose" that interest by buying the machine for the business. So the annual lost interest should be divided by the annual working hours to get the hourly cost.
Nick´s business is actually borrowing those money from Nick so the business should pay Nick some interest or else Nick could have the money at the bank and getting interest instead.
*What is your annual repair costs? Normal routine is easy to calculate, note how many services you have to do per 1500 hours and what they cost. Divide this by 1500 (or 12-1300 hours per year) to get the hourly maintenance/repair cost. I would say that repairs, maintenance etc would be at least £5000.
*Buying new equipment for new kinds of jobs? Those have to be paid for. Estimate how much you would like to invest per year and divide by the estimated working hours.
*What is your insurance costs? Divide by annual working hours.
*Fuel consumption per hour is one of the easiest numbers to calculate. Or actually fuel cost per hour. :D I would estimate it to be in the 13-14 liter/hour range but you have to convert into some odd English unit by yourself.
*VAT. I don´t know how VAT is used. You have to check it out by yourself. It´s something like our (hated) moms but I´m not sure if it works the same. Ask soemone in the economics world, someone that works with book keeping.
Note that it might be that VAT should not be included in the above costs.
*Administrative costs such as book keeping, stamps (for sending invoices to yor customers) etc should also be included. Use some kind of "standard number".
*The profits of your business. Yes, running your own business means taking some economical risks that you don´t do otherwise. You have to get paid for those risks (the wages are just the wages), otherwise you could just have an employment like everybody else. Divide your wanted profits by annual working hours. That interest from the business to Rich Nick might be part of the profit.

Ok, so you have got all the hourly costs. Well, add them all and you are ready to go. Note that you can play with some of the numbers up or down to see what happens. "What happens if I decide to not do that many investments in new equipment?"
Some calculations in an Excel file can help as it makes it easy to play with the numbers. I´ll help you with that Excel file if needed.
My ideas above are not complete but at least you get an idea of how to go on with your calculations. And it might even make your head spin at "red-line speed" :mrgreen: .
Volvo EC45 PRO -06
Volvo EC35 -01
MB-Trac 800 turbo
Bigab 10-14 hook lift trailer
MF 3165, Poor Ferguson

Youtube: http://www.youtube.com/user/RobbanxC


Return to “Construction Equipment”

Who is online

Users browsing this forum: No registered users and 2 guests