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Do you find that your landscaping equipment is costly to maintain? While most landscape business owners recognize that their equipment maintenance costs are high, they might be unsure as to exactly what they’re investing in it. That may be the case for you. In fact, you might even be wondering: Is this equipment costing more to maintain than it’s worth?
If you feel like you make decisions on equipment maintenance more on emotion rather than good business sense, then it’s an issue that requires further exploration. You may even feel as though you are unaware of just how big your equipment costs are and whether or not they’re hurting your profitability.
There should be a way to easily figure out the tipping point for when equipment maintenance has passed the threshold and should just be replaced. And you ought to be able to get a better understanding how landscaping equipment cost affects your overall profitability.
Understanding Operational Costs
The profitability of your landscaping business hinges on understanding your operational costs. If you don’t have a good grasp on these numbers, then there’s simply no way to be pricing your jobs in a way that is definitively profitable.
While a lot of business owners who have been in the industry for a long time have a good “gut feeling” on what to charge, the fact of the matter is, this is not a smart business practice. Pricing jobs based on the gut is a surefire way to put your business at risk for overpricing or (probably more common) underpricing a job.
These are the four primary operating costs that you need to know about your business before you try and price a landscaping job.
- Labor: This is undoubtedly your biggest expense. When you are in the landscape business, you know it’s all about the man-hours.
- Fuel: How much you are spending on fuel is also a big operational cost that you must understand in order to price your jobs accurately and ensure profitability.
- Indirect Time: The time that is taken for crews to drive to or from a job site, set-up the job, load or unload, make material runs, or even fill out paperwork is indirect time that you must pay for, even though it’s not hours directed specifically at job completion.
- Equipment Maintenance: Finally, equipment maintenance, which we will primarily focus on in this article, is an operational cost that cannot be overlooked. How much it’s costing to maintain your equipment can have a big impact on profitability.
Your Biggest Landscaping Equipment Costs
Landscaping equipment is not cheap. And besides the investment in purchasing the equipment, you must also invest in maintaining it. Your biggest equipment expenditure by far is your fleet of vehicles.
This is also one of the most important aspects of your business to keep “up and running.” Whether it’s a snow plow during the snow season or it’s a heavy-duty dump truck during the rest of the year, if one of your vehicles goes down unexpectedly, it can leave you dead in the water.
Of course, your vehicles aren’t the only pieces of equipment that need to be maintained. Mowers, skid steers, trimmers, blowers, and other pieces of equipment also need regular maintenance. While keeping your equipment up and running is important, even with ongoing maintenance, nothing lasts forever.
But maintenance isn’t cheap and the truth is, sometimes if you have a truck or a mower that continuously needs repairs, it’s going to end up costing you more than it’s worth. Knowing whether or not that’s the case comes down to tracking a variety of factors as well as ultimately knowing your numbers.
The following factors are just a few examples of items that should be tracked on your valuable pieces of equipment. Tracking this data allows you to know not only what kind of money you are putting into the equipment but also when it’s time for service.
- Usage: It’s important that you know the number of hours that you’re putting on any given piece of equipment, including how many hours it’s already been used for as well as how much it’s currently being used.
- Fuel Consumption: By tracking fuel consumption you determine how fuel efficient your fleet is and also make changes if needed.
- Routine Maintenance: Among other maintenance tasks, you should be tracking when your tires were last rotated, when your oil was last changed, when your brakes were replaced, and when filters were last changed out. Without tracking these important routine maintenance services, they can easily be overlooked.
Using Landscape Equipment Maintenance Software to Track Data
All of this information and more can be tracked in landscape equipment maintenance software. By tracking this data, you’ll know exactly how much money you’ve invested in a piece of equipment.
For instance, if a new mower costs you $10,000, but you see that you’ve already invested $4,000 into servicing it, then you can make a judgement call as to whether it’s worth continuing to maintain that mower or whether it makes more business sense to replace it with one that will have fewer maintenance costs.
Every business is going to have a different threshold for when this makes sense. But the only way to make that call is with hard data. Otherwise, you are just guessing, and that’s not a good business practice.
Of course, making this judgement call is impossible without having data at hand. Unfortunately, it’s quite common for landscaping businesses to have no idea how much investment has gone into a piece of equipment.
Unless you’re spending time combing through reports and adding it all up, you likely don’t have this data readily available. But software can change that. Instead of having to spend so much time tabulating costs, you’ll have a current and ongoing report of just how much you’ve invested.
Landscape Equipment Maintenance Scheduling
In addition to having the data in regards to how much it’s costing to maintain your equipment, you can also use landscape equipment maintenance software for its scheduling capabilities in order to manage service and repairs. This is critical because keeping up with regular maintenance is going to ultimately allow your equipment to last longer by prolonging its life expectancy.
After all, nobody is going to be performing preventative maintenance on your equipment if they aren’t tracking when it’s due. And paper spreadsheets are an antiquated way of trying to keep up with that information. They can get lost, oil stained, or accidentally thrown away, just to name a few mishaps.
But by having this data in a software system, with reminders when they are needed, you’ll know exactly when it’s time to change the oil, rotate the tires, or have your vehicle inspected, among other things.
Using Data to Make Smarter Equipment Decisions
Another benefit to using landscape equipment maintenance software is that it’s going to allow you to make better equipment-related decisions going forward.
In the past, you might have been tempted to opt for a less expensive piece of equipment in order to save some money. But having tracked the data and knowing exactly how much it has cost to maintain it, you might come to realize that it’s worth investing in something that costs more upfront but will be less expensive to maintain over time.
This can save you a lot of money in the long run but is a decision that could not have been easily made without data tracking capabilities and understanding maintenance costs.
Data being tracked via landscape equipment maintenance software can also help you to make smarter decisions regarding renting versus buying. The “rent versus buy” dilemma is one that can be tough to solve. But with data on your side, you’ll have a better grasp on what’s best when it comes to a particular piece of equipment.
Say that you have a large piece of specialty equipment which was expensive to purchase and is also expensive to maintain. It may have made more sense to just rent this equipment as opposed to buying it. With software, you’ll be able to track utilization data and make better decisions going forward regarding renting versus buying.
Keeping Costs Down on Equipment Inventory
A lot of landscaping equipment also has a variety of inventory associated with it. Tires, hoses, oil filters, or even the oil itself are all inventory items that are needed in order to keep your equipment running.
With landscape equipment maintenance software, you will also be able to keep better track of your inventory. By knowing exactly how much inventory you have in stock in your shop, you’ll be able to ensure you have the appropriate amount on-hand to keep your equipment running. This means that you’re not constantly calling your vendor or waiting for parts to be delivered. Instead, you’ll be able to remain as efficient as possible without lack of inventory ever slowing you down.
Your Choice in Landscape Equipment Maintenance Software
Without software, all of this important data would be virtually impossible to track. While it’s possible that you could create a variety of spreadsheets and attempt to track data on paper, the truth is that it becomes quite cumbersome to do things this way. Not only is it inefficient and not up-to-date in real time, but, as previously mentioned, it’s also easy for paper and spreadsheets to go missing.
You ought to be able to make smart and current decisions about your equipment and its required maintenance. And you ought to be able to know if a piece of equipment is beginning to cost more than it’s worth.
By choosing to have all of the data at your fingertips with a comprehensive software program, you’ll be able to make those wise decisions.
And improved equipment maintenance is not your only benefit. In fact, this is just one function of Asset. It can also assist with estimating, reporting, customer relations management, and so many other facets of operations. In turn, that will have a positive impact on your business by helping you run leaner and more efficient in every aspect of the operation.