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Tool Rental Of Company Owned Tools

 
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Old 08-31-2008, 08:14 PM   #1
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Tool Rental Of Company Owned Tools


Like most contractors I have a lot of tools. Small hand tools right on up to heavier equipment like torches, demolition hammers, scaffold, etc. I do not have any equipment like backhoes, etc.

The question I have is there anyone one out there charging for rental on company owned equipment other than small regular hand tools? I define regular hand tools to include non powered tools such as chisels, hammers, tape, etc and I define small power tools as portable circular saws, drills, etc. I have a significant investment in these tools and I think I should get something for it. I consider it the same as going to the rental store and renting it. I am paying them, why can't I pay myself?

Most of my projects are time and materials. I have some jobs in which I contract out. If i did it, what would anyone suggest as a line item? Also where do you draw the line? Does anyone else charge? I need to start getting some money for these tools to help with the upkeep, storage, depreciation, and ultimately the potential for having to replace it.
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Old 08-31-2008, 09:57 PM   #2
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Re: Tool Rental Of Company Owned Tools


If you open up a new company and rent tools to your existing company you can get away with it. Call it a loophole. It would be better to lease the tools from yourself though.

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Old 08-31-2008, 11:21 PM   #3
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Re: Tool Rental Of Company Owned Tools


You can use your tools as a marketing point.

"You can hire me and my $20,000 worth of tools for $80/hour. The right tools allow me to do the job properly and in less than 1/2 the time it would take a competent but tool-light handyman, or you can pay that handyman the same amount in dollars to spend twice as long doing 1/2 the quality."
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Old 09-01-2008, 04:21 PM   #4
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Re: Tool Rental Of Company Owned Tools


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You can use your tools as a marketing point.

"You can hire me and my $20,000 worth of tools for $80/hour. The right tools allow me to do the job properly and in less than 1/2 the time it would take a competent but tool-light handyman, or you can pay that handyman the same amount in dollars to spend twice as long doing 1/2 the quality."
so let me get this straight, your advice is to sell the fact that because you spent $20,000 on tools, you can do the job for less money than the guy who spent nothing on tools? but you are charging the same hourly rate as him, not more....the same? so you actually make less money than the handyman...you actually aren't even rewarding yourself with a higher profit...just a lower price to the customer..

when working T&M there is less incentive to improve efficiency than if you are working fixed price...

why invest in tools then? i'd rather not have any tools and make more money...

Last edited by mahlere; 09-01-2008 at 04:24 PM.
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Old 09-01-2008, 09:43 PM   #5
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Re: Tool Rental Of Company Owned Tools


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so let me get this straight, your advice is to sell the fact that because you spent $20,000 on tools, you can do the job for less money than the guy who spent nothing on tools? but you are charging the same hourly rate as him, not more....the same? so you actually make less money than the handyman...you actually aren't even rewarding yourself with a higher profit...just a lower price to the customer..

when working T&M there is less incentive to improve efficiency than if you are working fixed price...

why invest in tools then? i'd rather not have any tools and make more money...
I don't see that as a marketing ploy either. I have accumulated these tools as a result of different jobs. I purchased them for a specific job after analyzing whether it was cost effective. The vast majority of the time, it was. The only exception is the torch and bottles. I tried to rent some one time but I could not find anyone that had it due to liability. So I had to buy it. I wrote that off on the job as well.

I now have these tools and to tell you the truth I would like to get rid of some of them. However, I am not a fan of pawn shops. I wish there was a contractor swap shop locally where I work where at least we could look at the tools and go on our way. Instead of waiting for someone who steals it to come back the next week to try and sell it back to us.

Wait, I am getting off track here. My point is that I have all these tools so why shouldn't I make some money off of them. One company I worked for a long time ago set up certain tools for the inhouse "rental program" and charged it to the job. I still have to maintain them so at some point they can be a liability. My question is there anyone else doing something like this? I would like to hear some ideas.
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Old 09-01-2008, 09:51 PM   #6
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Re: Tool Rental Of Company Owned Tools


for anything other than your everyday tools, we either add a line item to service calls, or figure it into pricing for projects...

now, I will 'eat' the cost on projects occasionally, but they are fixed price and typically we can get the job done quicker, for the same price as the guy without the tool...

but we own scissor lifts for our service customers...sometimes we need a lift for 2-3 hrs...can't justify renting one...but they pay us for transportation and usage as separate line items...

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