Congrats on the purchase TM! Pretty amazing that machine has enough hydro power in such a compact house to run a mulcher. Have you thought about gel filling the tires? Not the rigid foam but the newer softer gel.
Our 420DIT backhoe has the soft gel filled front tires that works very well. The soft gel gives enough where you don't rip the lugs off the tires like the hard foam in a dirt moving situation. Destroyed a set of new to me rigid foam skid steer tires back in the early 2000's..
BTW TM don't you mean 1% of purchase price? That's the ratio the old timers used and I'm trying to get back to for what little hourly work we do. The last hoe we bought, a 325FL was around $200,000. 1% of purchase price hourly would be $200 per hour.
At the moment I charge out the 325 at $155 an hour, which needs to be $200+ to make a profit. One reason why I don't perform work hourly. Building part of a project from a subcontractor perspective including materials, labor and equipment is more profitable for us as there is a markup on each line item however it does comes with more risk.
I just typed up a huge diatribe about market location, conditions and how it may impact rates....and decided to delete it. Too wordy!! There are a lot of factors that will have an impact on market conditions. Since you've mentioned your 325F Cat @ $155/hr it brings into question how much more may be involved. For my similarly sized (+/-60k#) Deere 245G I charge $220/hr. My Cat 315CL (+/-40k#) goes for $150. My rates for these machines have not changed since I implemented them. From what I see you posting on HEF, I would assume (yes we all know what assumptions can get you) that you are currently enjoying unprecedented success in your industry. That being said why not set your rate to the amount required to make a profit. This is what you've done with the bid work....Why not do the same for the hourly? If the market for the hourly dries up, who cares? You've got plenty of bid work. In my humble opinion, the reason you should have a profitable hourly rate is because there is often some hourly work that is born out of the bid work ("Since you are here could please?"....) and I (personally) would rather let someone else do that work if it means doing it for a loss. Even if at a profit I may be doing it for less than what I could be making if that machine was doing bid work instead. I'm not trying to tell you how to run your business (It looks like your doing fine on your own and I have enough trouble managing mine, let alone adding yours.
) but I'd bet your not doing this type of work because you need the practice anymore. I know that I'm not. I have spent decades building my business to what it has become. In my case that has meant sacrificing time with my family and friends, other interests I have, and often times sleep! I'm going to do the job as a professional, correctly, ethically, and with integrity (even if I have bid it incorrectly), but my (substantial) investment, and my time, are valuable to me and I will be compensated fairly for them. If one is being asked to do things for free, as a favor, or at a reduced rate, one must look to see if there might be a lack of respect in the ask.
All of the above is my opinion and how I am seeing this topic at the moment. It doesn't mean that what I say is absolute, or appropriate, for all persons and/or all situations. As individuals we all must look at our own truths on the subject.
As it relates to the OP's question, having ones machine costs is key to being able to make quick adjustments which, in my opinion, are based on work load. I think an excellent source to help determine your costs (and even estimating production) is the Caterpillar Handbook. It is not just a source for machine specifications and applications but there is a paragraph dedicated to cost of machine ownership. They used to hand them out as paper backed books but I think now they are on disc...actually they are probably just a link now. Ask your Caterpillar sales rep. They've always given them to me upon request.
Treemuncher:
BTW, those hillside "spider" type machines are amazing! Are you trying to say that this machine is $500k to buy? That seems a bit "spendy" for what I'm seeing. One thing you have going for you is that there are not many of those around. This gives you an edge (your already seeing it when you compared it to hand working those hillsides) but one would have to "make" a market for it (maybe you've already carved your niche). $500/hr might be hard to sell in TN. I hope that there are a lot of people with money who want the underbrush removed from their hillsides!
The
prices for those items you've mentioned!! I think a set of loader tires (much bigger your tires appear to be) aren't that expensive (they are with mounting, etc. but not just cost per tire). What really scares me about that work is what happens if you break down and have to try to recover that machine to work on it at a shop?...and who even supports those machines?
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