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Do You Set A Budget For New Tools Each Year?

 
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Old 02-05-2017, 09:48 PM   #1
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Do You Set A Budget For New Tools Each Year?


Two fold question. Do you set a budget each year for what you plan to spend on new tools and equipment?

I have mine for 2017 set at $1600

Second question. What is on your new tool wish list?

Mine is simple to start this year

- new shop vac
- franklin precision stud finder
- cordless 18g nailer for quick trim re-installs


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Old 02-05-2017, 09:54 PM   #2
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Re: Do You Set A Budget For New Tools Each Year?


My budget usually is dictated after my 3rd qtr meeting with our accountant.

How did you come up with that number? Percentage of expected sales? Do you plan for tool replacement as the older tools wear?

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Old 02-05-2017, 10:03 PM   #3
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Re: Do You Set A Budget For New Tools Each Year?


I could blow that budget in seconds.

Tom
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Old 02-05-2017, 10:04 PM   #4
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Re: Do You Set A Budget For New Tools Each Year?


I have $20 set back this week for sanding pads .. For sand day on Friday!
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Old 02-05-2017, 10:18 PM   #5
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Re: Do You Set A Budget For New Tools Each Year?


I'm well tooled-up. I only need to budget for replacements for broken / lost / stolen.
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Old 02-05-2017, 10:29 PM   #6
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Re: Do You Set A Budget For New Tools Each Year?


No, because the number would scare the sh*t out of me.
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Old 02-05-2017, 10:37 PM   #7
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Re: Do You Set A Budget For New Tools Each Year?


Quote:
Originally Posted by Stevarino View Post
Two fold question. Do you set a budget each year for what you plan to spend on new tools and equipment?

I have mine for 2017 set at $1600
Never a budget. I buy what I need to get the jobs done, and often the cool new tools I find to buy in the TBA thread. There are weeks I spend $1,600 on tools. I am sure when I go to do my taxes this year I will be like Yup a little higher than I thought.

Probably less this year than past years, as I have purchased a majority of the essentials.
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Old 02-05-2017, 10:48 PM   #8
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Re: Do You Set A Budget For New Tools Each Year?


Never a budget. I buy tools as I need them, and that's pretty much dependent on whether I take on a type of job I haven't done before.

Been at it long enough that I'm pretty well stocked.
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Old 02-05-2017, 11:06 PM   #9
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Re: Do You Set A Budget For New Tools Each Year?


I spent 13k or 14k this last year.

I prefer to look at large tools in terms of repayment period and/or tax deduction. You should read about section 179 if you haven't already.

Generally, I find a profitable tool will pay for itself in one or two jobs. If it doesn't make that kind of revenue I rent it if necessary to do a job.

When you specialize and have job specific equipment that few other operators possess the return on investment goes way up.
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Old 02-05-2017, 11:11 PM   #10
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Re: Do You Set A Budget For New Tools Each Year?


Quote:
Originally Posted by Stevarino View Post
Do you set a budget each year for what you plan to spend on new tools and equipment?
Theoretically as tools depreciate, you put aside money in an account for replacing them. OTOH, if something new comes out that will make you more money than it costs, you buy it. I know what I've spent in past years to cover all that.

If you're doing something new to you, you obviously have to buy any additional tools and pay for them out of the new project. If it's an unforseen opportunity, then it isn't planned for to begin with, so it isn't budgeted for.
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Old 02-05-2017, 11:12 PM   #11
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Re: Do You Set A Budget For New Tools Each Year?


Quote:
Originally Posted by EricBrancard View Post
No, because the number would scare the sh*t out of me.

Ain't that the truth. Spent about $15k in 2016. Already have plans for a wide belt sander, forklift & shop addition in the first half of 2017.$15k won't cover the shop addition & concrete. Gearing up a cabinet shop is not cheap.
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Old 02-05-2017, 11:16 PM   #12
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Re: Do You Set A Budget For New Tools Each Year?


Last year just bought a couple of drills and some cheap hand tools.Try not to spend too much . Soon I will need to possibly buy 3 trucks to replace my aging mini fleet. 2 are 17 years old and other has 200,000 miles cant wait.


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Old 02-05-2017, 11:37 PM   #13
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Re: Do You Set A Budget For New Tools Each Year?


You're a GC and your budget is $1,600? I call Dad and ask if I can spend that on a tool he may not have known existed and he says yeah. We spend more than 10 times that a year on tools. If it's a tool that increases your profitability and efficiency, it's probably going to be a good purchase.
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Old 02-05-2017, 11:54 PM   #14
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Re: Do You Set A Budget For New Tools Each Year?


An 18 or 16 gauge battery nail will definitely make you money.

Mine is always in the truck.

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Old 02-06-2017, 12:01 AM   #15
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Re: Do You Set A Budget For New Tools Each Year?


I tried a tool budget. Ha, what a joke. I spent a hair over 10k this year, probably be more next year since will probably be getting another truck.

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Old 02-06-2017, 01:33 AM   #16
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Re: Do You Set A Budget For New Tools Each Year?


I just buy what I want. It used to be whatever made the job faster and made me more money. Now's it more, "whatever makes the job easier".
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Old 02-06-2017, 05:34 AM   #17
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Re: Do You Set A Budget For New Tools Each Year?


How do you budget an addiction?
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Old 02-06-2017, 06:02 AM   #18
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Re: Do You Set A Budget For New Tools Each Year?


Quote:
Originally Posted by Californiadecks View Post
I just buy what I want. It used to be whatever made the job faster and made me more money. Now's it more, "whatever makes the job easier".
To me, easier equates to more efficient.
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Old 02-06-2017, 06:30 AM   #19
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Re: Do You Set A Budget For New Tools Each Year?


I spent $45,000 on tools last year, not including the van I bought.

My opinion is that when you're in the growth stage you just go all out and buy the tools you need as the money becomes available. After a while you're either going to plateue or keep buying due to growing needs of more employees.

Personally, I'll be in year three in february. I'm getting to the point that I'm setup pretty good and will be cutting back significantly on tool purchases this year. I'll look to pay off my transit and then plan to build a modest shop which will take me out of our three car garage.

Looking at ROI is important. As the tool arsenal grows the ROI on what you buy tends to become less and less. Easy to get sucked into the "I wants" and convenience tools that don't produce a good ROI. That's where establishing a budget can be a life saver.
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Old 02-06-2017, 06:49 AM   #20
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Re: Do You Set A Budget For New Tools Each Year?


Never have made a budget for tools. There's been times when I have had to watch what I spent.
A couple things that make a tool purchase decision easy is,
will it make a job go quicker.
Will the job pay for the specialty tool and still make money.

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