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Me and another guy are going to be doing some jobs together, I'll be providing labor and he will be providing equipment (welder, tractor, skid steer) and the like to do some barn building, pipe fencing etc. He more or less will be selling the job and allowing the use of his stuff.
We are trying to figure out how to fairly calculate the equipment usage into the rate or bid. I usually rent equipment as needed, he has it at our disposal. We are not sure if we should charge "x" per hour for equipment or a flat rate per job for use etc.
Rentals are a lot more than owning your stuff but you have to figure for wear and tear, maintenance and all that for your own equipment. I'm thinking to depreciate the equipment over 5 years and use that to figure a rate to charge into each job that the equipment is used in.
Right now, I have "x" amount allocated in my OH each year for tool replacement since my tools for light construction generally will last about 3 years, if that. This stuff should last longer and isn't depreciated the same on taxes as smaller equipment. We are kinda at a loss on this one.
Basically he wants to make sure that we cover the wear and tear on his stuff.
We are trying to figure out how to fairly calculate the equipment usage into the rate or bid. I usually rent equipment as needed, he has it at our disposal. We are not sure if we should charge "x" per hour for equipment or a flat rate per job for use etc.
Rentals are a lot more than owning your stuff but you have to figure for wear and tear, maintenance and all that for your own equipment. I'm thinking to depreciate the equipment over 5 years and use that to figure a rate to charge into each job that the equipment is used in.
Right now, I have "x" amount allocated in my OH each year for tool replacement since my tools for light construction generally will last about 3 years, if that. This stuff should last longer and isn't depreciated the same on taxes as smaller equipment. We are kinda at a loss on this one.
Basically he wants to make sure that we cover the wear and tear on his stuff.