Operational cost per hour? - Snow Plow Forum - Let's Talk Snow Discussion Forums
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Old 02-27-2004, 06:44 AM
ratlover's Avatar
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Question Operational cost per hour?

Doing some figuring on what my equipment costs per hour to plow with. I know pretty close what it costs me per mile but am looking to see if my figuring is right per hour and see what other trucks are running and other guys. I'm just currious about fuel and scheduled matinence and wear items and fluids, I do my own work so I wont count labor costs. Not depreciation or ins. costs or actual cost of the truck.

Truck in sig. with blade in sig. Mostly all larger/med comercial
$6.00 perhour (this sound right? it dosnt to me)

Thanks.
Wish I woulda taken better accounting this year of what my truck was costing me
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Philip
06 2500HD Chevy LBZ Duramax with a

Wrecked 03 2500HD RC D/A with some goodies
TTS programing - Suncoast stage 5 trans
9'-6" EZ-V
Best of 11.75 in the 1/4
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Old 02-27-2004, 06:51 AM
John DiMartino's Avatar
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I come up with a much higher number using aprox figures

My plow is approx 4500,I get new ones about every 3yrs. we plow about 500 hrs in 3yrs(these are approx) at which time i get about 2000 for the plow so the plow ends up cost 5 dollars an hr to run.
the trucks maintenance over 3 yrs is 3 sets of tires,and whatever services are needed (one set of shocks,brakes, at least)the services come to about 4000 bucks,(tires alone are 1800 over 3 yrs,the rest is routine maint.
so theres 8 bucks an HR
Fuel is about a gallon an hr in a Cummins diesel diesel runs abotu 1.80 a gall here in winter, thers 900 bucks

Im sure im missing plenty if expenses,but you just wanted the plow,and truck fuel costs. I come up with about 15 hr,with what you asked for. I guess I have to figure in equipment costs to get your cost per hr,I dont know any other way to do it.
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Last edited by John DiMartino; 02-27-2004 at 07:15 AM.
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Old 02-27-2004, 07:09 AM
ratlover's Avatar
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Must be all that unburnt # 2 going out the sewer pipe

I'm making me an excell file and am trying to break out basicly just what the cost for consumables and wear items. Oil, breaks, fuel and additive and increase wear and replacemnt and exellerated change intervalls and such. I am sticking cost of the plow with the truck because the cost to change fluids and edges and such is fairly small. Basicly what it costs to have the truck running plowing snow. Not cost of manning it. I've got insurance, depreciation and all the other costs of the initial costs of the equipment and the other stuff broken out in another place.

You da man
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Philip
06 2500HD Chevy LBZ Duramax with a

Wrecked 03 2500HD RC D/A with some goodies
TTS programing - Suncoast stage 5 trans
9'-6" EZ-V
Best of 11.75 in the 1/4
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Old 02-27-2004, 07:13 AM
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I have the whacking a pole or tearing up the plow on a man whole or the like in another place so if $ for unforseen damage is in there then please leme know guys.

And bottle fills arnt factored in either John
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Philip
06 2500HD Chevy LBZ Duramax with a

Wrecked 03 2500HD RC D/A with some goodies
TTS programing - Suncoast stage 5 trans
9'-6" EZ-V
Best of 11.75 in the 1/4
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Old 02-27-2004, 07:30 AM
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Thanks

Duh......forgot about tires

My equipment is somewere else in the equation, that way I can alter the lenght of keeping it and such......
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Philip
06 2500HD Chevy LBZ Duramax with a

Wrecked 03 2500HD RC D/A with some goodies
TTS programing - Suncoast stage 5 trans
9'-6" EZ-V
Best of 11.75 in the 1/4
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  #6  
Old 02-27-2004, 10:54 AM
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This is not exactly on topic... but I think relevant to point out since it does address maintenance costs and how you account for them in your business. It's a fairly easy equation to figure out if you want an overall budget number. You can add or delete numbers depending on what you want to measure. But ask yourself, why are you measuring this? What do you hope to accomplish by tracking this? What are you going to change?. The biggest determining factor is going to be how many hours you are going to bill out your truck and this will be the denominator.

Hypothetically:

$30,000 - Truck cost (assuming paid cash - no finance cost)
$4,000 - plow
$1,000 - upgrades/extras, etc

$35,000 - total vehicle cost to put on road
$10,000 - residual value after 5 years on the road

$25,000 in principal cost to recover over 5 years

$5,000 vehicle cost per year
$2,500 average maintenance cost per year (will be less in first three years, increase in years 4 and 5)
$2,000 fuel cost
$1,000 insurance

$10,500 total cost to operate vehicle. This works out to be $875.00 per month.

In order to recover this cost you have to make an assumption about how much the truck is working. For instance, if the truck is going to work 250 days a year, the cost per day is $42.00 to operate, or $5.25 per hour.

I do not think this an accurate way to build vehicle cost for snow plowing since you do not know how much it's going to snow and therefore how much you're going to be working.

In most cases we don't need 3/4 ton automatic drive trucks with 4wd for daily drivers. The cost of the plow and the add on extras for a truck are really attributed to snow plowing. Otherwise a 1/2 ton 2 wd truck is all that most would need (not necessarily what we'd want to drive though).

If I were to delete the extras on my $30,000 truck that I don't need if I were not plowing, I would save approximately $8,000. Add back in the cost of the plow and the total cost for plow related items comes to $12,000. Of the $35,000, $23,000 is the base cost of the vehicle.

Rerun the above numbers to cost for $23,000, the same factors as above, an the annual cost for the truck is $2600.00. Add in the same maintenance and other costs.

$2,600 vehicle cost per year
$2,500 average maintenance cost per year (will be less in first three years, increase in years 4 and 5)
$2,000 fuel cost
$1,000 insurance

Total cost is $8100.00, or $675 per month. Now, add back in the cost of the snow plow ($12,000/5 years = $2400 per year or $480 per month for five months of the year).

The cost is $675 to run the truck in the 7 summer months and $1,155 to run the truck in the winter for five months. Yes, you could tighten this and put the plow maintenance only on the winter time months where as in this example the fuel, maintenance, etc. are all figured over the course of the year for simplicity.

When it comes time to truly assign overhead and equipment costs between two "divisions" in your company, you can see how a landscape or contracting business may be pulling an unfair share of the equipment costs relative to snow plowing - making the snow plowing numbers look great due to lower stated costs!

Once you figure out the monthly costs to run the truck ($875 average for 12 months, or weighted average of $675 for summer and $1155 for winter) you can figure out an hourly cost for working the truck.

In the summer time, you might work the truck for 4 weeks at 40 hours per week, or 160 hours, equalling $4.21 an hour or $33.75 per day. If you charged the average cost to the job you may be less competitive since you're overstating your costs.

In the winter time you might work the truck 200 total hours plowing (assume average trips time the number of hours for each trip). $1155 x 5 months = $5775 for the winter, with 200 billable hours = $28.88 per hour to operate.

If the truck is dedicated to snow operations its a little easier to figure out since you don't have to weight the numbers for two different seasons.

Obviously these numbers are for example sake. The formula can be tightened by adding more costs or become more conservative by lowering residual value of the truck or adding more repair costs (e.g. body work after a couple years of plowing).
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Old 02-27-2004, 11:19 AM
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You bring up some excellent points.

One of wich that makes things seem kinda worse and allows you to fudge the figures a bit to your advantage(come tax time ) Is the fact that I dont need at 2003 2500HD D/A. I dont need it for daily transportation and I dont even really need it to plow snow. I bought the truck because I wanted it. I also cant factor in it costs X for insurance for the year and I plow for X hours so this adds to the cost.....I have to have insuracne on the thing anyway, I've gota add the cost difference yes but for my calcs I have that broken down by a yearly fixed thing.

The basic reasoning of that I want the truck I have is why I am breaking things out the way I am as apposed to just figuring my hourly rate for the whole deal because I would have it anyway, I get to write part of it off though since I have a blade on the front of it. If I figured the operational costs of my truck based on actual costs then my cost would be through the roof, I dont think I can charge extra for having a cowl hood can I?

I was just wondering what peoples matinence and fuel costs were for different rigs. To see if I'm inline and also curious to see the cost differences between gassers and diesels of different years. Initial investment cost is pretty easy to come up with.
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Philip
06 2500HD Chevy LBZ Duramax with a

Wrecked 03 2500HD RC D/A with some goodies
TTS programing - Suncoast stage 5 trans
9'-6" EZ-V
Best of 11.75 in the 1/4
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  #8  
Old 03-03-2004, 01:59 PM
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I figure my cost per hour at 15.00,year round for any of our trucks
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  #9  
Old 03-03-2004, 02:10 PM
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My CPA beaks all this down into my lawn care biz, so the truck is covered for everything including the plow and spreader.

However I make sure each time we go out working, a tranny rebuild is factored in. This is factored in each and every time we go out.

Now for the flip side, my hourly price is much higher than others, so I will make money.
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