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How much to budget for tools at start-up?

2K views 23 replies 19 participants last post by  Fouthgeneration 
#1 ·
I'm starting a home renovation company and am wondering how much I should budget for tools?
Any estimates, based on your experience, for what I should spend on:
hand tools
power tools
ladders/benches

Thanks
 
#3 ·
Depends a lot on what you'll be self performing.and what you'll subcontract out. It also depends on your target market.

Some people should never paint, some should never drywall. Trades people are always wishing they never got into could be good to stay away from.

Consider the size of the projects and how practical it is to sub out different things. Small projects scheduling subs can sink you.

It all depends on your business needs and target productivity levels.
 
#5 ·
just tools working out of an existing vehicle you own or including the purchase of a truck/trailer or van?

you may be able to get going with 10k in tools if you're not silly about purchases. it can be done for less and more is better, but this depends on what you're going to undertake.
 
#6 ·
It depends on what you consider tools.

Demo saws and house Jack's ate one end of the spectrum and an impact and a saw ate the other.

Hard to say without knowing your plans

Also, there are a lot of tools that you can't budget for and just pick up as you do certain jobs.

Most of us roll with probably 5-10 grand worth on a daily basis before we drag out the specialty tools.

It nothing to have 3 grand in tools to do a simple repair.

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#8 ·
Huge variation. Let's say you're doing a down-to studs but reletively simple kitchen remodel in a modest home and subbing MEPs and counters. You buy modular cabinets and do everything else yourself.

In order of appearance, you may use:
  1. zip poles
  2. ladder
  3. impact driver to remove old cabinets
  4. crescent wrench and channel locks to disconnect plumbing
  5. screwdriver to pull switch plates
  6. prybars and hammer or small sledge to remove cabinets with less grace, remove flooring, remove drywall
  7. electric tester to make sure circuits are off
  8. temporary lighting if assuming electric is getting demoed and changed
  9. circ saw and sawzall for various cuts between materials that are being kept and being removed
  10. shop vac to clean up
  11. chaulk line, tape, pencils for layout
  12. framing nailer for some changes to soffits or blocking or a partition wall (could just use impact)
  13. levels to plumb your framing
  14. drywall gun, roto zip or at least keyhole saw to hang new rock
  15. mud pan and knives, electric mixer and paddle
  16. painting gear to prime drywall
  17. clamps, hole saws, possibly jig saw, fein tool, more levels, maybe handheld power planer, table saw, miter saw, brad and pin nailers, compressor to install cabinets and trim
  18. tile saw, mixer, trowels, grout floats, leveling system, etc for tile flooring and back splash

Quick off the top of my head, maybe $5k. I'm sure I missed something major, and there are lots of specialty tools as you get into more custom stuff.
 
#10 ·
5 grand should be enough.

You can save Money by buying used equipment.

Craigslist and garage sales are great places to find ladders and ladder racks.

eBay is the best place for tools, especially new cordless tools. You can generally save 30% off of retail.

Rent bigger tools or occasional use tools.

Buy good tools. Buy once, cry once.




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#12 ·
There is always the option of buying some used equipment. I sold my drywall lift a few years back in great condition for $50.

The first battery impact driver I bought used. Tool, 2 batteries, charger. It turned out to be one of the best at that time.

Some tools I wouldn't buy used, too much downside.

Also consider, if you have multiple jobs hoingcat the same time, you're going to need multiple tool sets, at least for some of them.
 
#21 ·
I started my business just over 2 years ago. I would only buy the tools you need to complete the jobs you have booked. Include $ in your estimates to buy the tools needed to complete the job. Once you take your first payment go purchase those tools. I would never recommend going into dept to buy tools. Larger tools like a lift and bulldozers are a different story.


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#24 · (Edited)
Read how taxes and equipment works before spending any large amounts... Get a pro bookkeeper/CPA that handles sub contractors in your volume range..

# 1 Tool is yourself, your hourly rate is what you think that tool is worth ...

40 years x 2000 hours x 30.00$ = 2.4 million dollars.....about half stolen by Taxes and Payroll mandates...

Your work Truck, which you can deduct at 58 cents a mile...In a few years tax deductions should pay a large fraction of your fuel and purchase costs... only if you work at the same address for over an year does the trip mileage become non deductible...

Trailer if needed?

Shop, storage space for the tools when not in use....
everything LASTS longer stored indoors, thus allowing you MORE profit or lower bids....

Keep your credit spotless, Borrow PRIOR TO NEED for cheaper rates.
Your Credit rating is a top ten TOOL too.

Rent low usage, or Rent to own high usage machinery.

As you accumulate capital, raise insurance deductibles to lower costs.

Keep learning: Keep putting a sharp edge on the mental cutting edge and skills as you progress to larger crews, and developing a profitable company culture that doesn't depend upon just one or two star workers to make your business model profitable. If another added worker Lowers profits per hour, why hire them?

Keep the tools accessories in good condition too: sharp bits for demo hammers, air hoses, gang boxes, preform require maintenance, have a calendar/hours of use system in place.

reward workers that take care of the "old" stuff with their choice of the New tools, Gently remind them to care for their tools, but remember all tools break and wear over time/use...

Always have a spare tool that is a "work stopper" or a plan to get one in few hours, what to do when the work truck is the shop getting repaired? Again a cash &credit reserve for unplanned repairs/replacements/ rentals.

preplan rentals of possible equipment to find best deals and plan insurance costs and coverage needed at the cheapest rates. and find timely and least cost equipment movement.

Keep your eye open for Income tax auctions of contractors in your trade.... for bargains

Pay your taxes so you can keep your tools.....:thumbsup:

Remember to always price the use of a tool per hour by TODAY'S replacement costs including taxes and accessories, not your cost of ten years ago, or the used cost.

If you find you don't charge enough, you won't have enough $ to replace your equipment as it wears out....."Eating the Seed Corn" stage of going broke.

Rental rate sheets can be used as a starting point of daily use costs of similar tools, I'd start at 50% of the (8 hrs of use) day rate, and lower it as you develop real world numbers.

A tool never used costs you the lost earning power of that amount of Money every day.....Shop Queens...If you don't use your tonsils, sell them...
 
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