Ratio of Payroll Costs to Equipment Costs

[Nate Ebert]

Hello Folks,

I've been thinking and discussing with my crew the merits of investing in new equipment, which does benefit the crew as well as some equity for me. I know folks have many different business models and are equipped differently for different markets. We are a small, high volume company that mostly runs 1 crew, occasionally a second small crew. We currently spend about a comparable amount on payroll and equipment purchase/repair each year. Do other folks seem to spend more on equipment each year or payroll?

 

[Reach]

We spend more on payroll, by a fair margin.

Don’t count equipment purchases and repairs as the same thing, they should be tracked separately. If you’re spending too much on repairs, look at where it’s going. It may cost less to buy newer equipment than what it’s costing to keep the old going now.

 

[Nate Ebert]

We spend more on payroll, by a fair margin.

Don’t count equipment purchases and repairs as the same thing, they should be tracked separately. If you’re spending too much on repairs, look at where it’s going. It may cost less to buy newer equipment than what it’s costing to keep the old going now.

Thanks for the opinion. We definitely think of repairs and new equipment differently, but our repair bills have gone down drastically since replacing some older equipment with new.

 

[Fivepoints]

We spend more on equipment. Part of this is the local labor pool is terrible. Folks that arent are drawn away from this sort of work by high paying defense industry stuff. Theres zero way we can compete with these kinda of companies on a pay and benefits level. Theres almost no regulation in our market so even just being legit has some serious challenges. We are one of three in our city with work comp. Theres 112 tree services in the phone book. As a result, we are very equipment heavy.