If you are in the contracting business, your bottom line is constantly threatened by the cost of things like heavy machinery and trucks. How can you keep costs in line? What should you buy and what should rent? What should you skip altogether? These are good questions that we will try to answer here.
Pickups, Bigger Trucks, and Heavy Equipment
When you assess your needs, trucks are often the first thing that comes to mind. A good rule of thumb is to look at how often you will use it. In the case of a pickup truck, you know you will be hauling supplies often. So, the first truck is a no-brainer. Getting additional trucks will depend on whether your employees or subcontractors have their own pickups. If they are willing to do some hauling in exchange for a set reimbursement fee, that may be a better option than buying additional pickups.
As for bigger trucks, you take the cost of the loan to purchase a concrete truck, articulated hauler or reach truck. Then you divide that yearly cost by the number of days you’ll use it. Perhaps you can rent that truck out to other contractors. However, you need to consider the cost of maintenance. Renting relieves you of the responsibility of ownership.
The logic that applies to truck purchases or rental will apply to heavy equipment as well. If you seldom need it, a rental is probably a better idea. On the other hand, if you use that equipment regularly, you may prefer to own it. Almost every job site where you are working outdoors will require the use of a bulldozer or backhoe. A forklift may be necessary as well.
In all cases, the issue of where to keep the equipment should be considered. If you work out of your home, you don’t want to keep a big skid-steer loader or excavator there. Insurance is another issue since you will pay more to own heavy equipment than to rent it.
Specialized Small Equipment and Other Supplies
While it may be tempting to only rent small specialized equipment, it will probably be more beneficial to own it. This takes far less space, doesn’t require special insurance, and can be ready at a moment’s notice.
Likewise, construction crane mats are a better value if they are purchased rather than rented. These can provide temporary roadways and work surfaces that will keep your equipment and trucks out of the dirt or mud. Unlike most of your equipment, these mats can stay in place for the entire project. As for storage, you could keep them in a small shed or self-storage space. Chances are, however, that you might just move them from one job site to the next.
The longest-lasting variety is the composite crane mat. These won’t split or rot like their wooden counterparts. Composite mats can last for decades. This means that whenever you tire of them, you can sell them to someone else. They can certainly pay for themselves by the time you finish up two or three projects.
As a last piece of advice, when in doubt, rent big equipment rather than buy it. You can keep your costs down and save toward the day when owning that equipment is a more cost-effective situation.