Chipper thoughts

fhudo

fhudo

Location
Chapel Hill
I have a small tree business where 100% of our work involves climbing takedowns / pruning. We are a two person shop.

I am looking at buying a
BCL1000 / equivalent but want to run some numbers to establish ROI.

Assuming a brand new machine costs 41k what is a sensible depreciation timeline? 5 years? 7 Years? I would expect to run the machine 2 hours per day and ‘look after it’.

Does anybody know a better way to depreciate (ie the cost of an hour?)

Any help / advice would be greatly appreciated.



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Two hours a day!?! Try ten or fifteen years. Get a 15 inch machine and avoid buyers remorse. I bought a 12” bandit new in 2006 and it’s going very very strong, though since I got a 15” chipper last year it’s been a backup.
 
Be flexible. Depreciation is literally a number to help you on your taxes. Don’t set up a schedule, use what is needed to limit your tax liability. If you are looking to set up a replacement schedule, that’s different. Where you can really take advantage of the tax law is when you depreciate fully, and continue to earn money with it while buying your next depreciated asset. The one thing my accountant insisted was that we don’t depreciate fully until the debt on the unit is paid. If not this turns into a vicious cycle of owing money and not getting the tax benefits.
 
fhudo said:
I have a small tree business where 100% of our work involves climbing takedowns / pruning. We are a two person shop.

I am looking at buying a
BCL1000 / equivalent but want to run some numbers to establish ROI.

Assuming a brand new machine costs 41k what is a sensible depreciation timeline? 5 years? 7 Years? I would expect to run the machine 2 hours per day and ‘look after it’.

Does anybody know a better way to depreciate (ie the cost of an hour?)

Any help / advice would be greatly appreciated.



Sent from my iPhone using Tapatalk
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Try to remember that the chipper is an extension of the operation, it alone is hard to justify, but together with dump truck it streamlines the ( process ) and allows you to do more jobs more effectively and creates a product that is easy to get rid of. Yes you can do thew math tax wise and end up with an asset but the earnings are shared with the rest of the equipment as is the cost of maintenance. You will be able to generate much more revenue with a chipper than without, that extra revenue will more than pay for the machine. However, if you are borrowing the money remember to have insurance in the event you hurt yourself and can't make the payments. I didn't borrow for mine.
 
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