Running Cost of Chipper Per Annum

[Dean Lofthouse]

Talking from personal experience... there was a period last year where i decided it was much cheaper (and easier) for me to sit on my arse at home earning nothing and having a chance to develop my business than going out cheap and working my bckside into the ground for nothing..

 

Anyone can be a busy fool.. my dad told me that when I started in this game and I didn't believe him, I thought it was better to be out every single day I could and earn something rather than nothing and one day it would come good...

Now I realise that he was right, working for cheap because you're competitors are cheap dosent do you any favours, you end up stressed, with knackered kit, no money in the bank and wondering how you ended up there.

 

:congrats:

[18 stoner]

Yeah but so will a high one.

 

I would rather have some work and earn money than no work and earn nothing.

 

Sometimes I think I live in a different world to some people.

 

Its one where cost matters.

 

With that mentallity, you will never earn a good living, retire early, be able to replace kit as needed, afford to have two months off if you are ill, etc, etc.

 

You will cover costs and earn a wage, but never have time to scratch your arse. Sorry its a bit harsh, but one day you will reflect and say "you know what, that big daft bloke on arbtalk said i would end up like this"

 

You are also one of the reasons prices are constantly driven down in some areas, but thats another post!

[ukminch]

In reply to Highland forestry:

 

Bang on my accountant explained this really well to me. I was struggling for work when I lost out on renewal of contracts and started panicking. I'd go out and do jobs that paid immediately and do them cheap as it really helped my cashflow (I was on 90 day terms for some work) I'd have equipment on hire or owned for other jobs and have a fuel card for the van so didn't really see these expenses. When the accountant told me I was working for about £60 a day for a 12 hour day I was shocked. I had loads of money in my pocket, when he showed me the figures I discovered that actually what I'd got was a loan, and there were better ways of borrowing that money for the short term that I needed it.

 

A good accountant will save you more money that you spend on them. I don't use mine enough and need to make better use of him as I know he's very good.

 

R

[Highland Forestry]

In reply to Highland forestry:

 

Bang on my accountant explained this really well to me. I was struggling for work when I lost out on renewal of contracts and started panicking. I'd go out and do jobs that paid immediately and do them cheap as it really helped my cashflow (I was on 90 day terms for some work) I'd have equipment on hire or owned for other jobs and have a fuel card for the van so didn't really see these expenses. When the accountant told me I was working for about £60 a day for a 12 hour day I was shocked. I had loads of money in my pocket, when he showed me the figures I discovered that actually what I'd got was a loan, and there were better ways of borrowing that money for the short term that I needed it.

 

A good accountant will save you more money that you spend on them. I don't use mine enough and need to make better use of him as I know he's very good.

 

R

 

 

I'd totally agree with that, and know the scenario well!!!

 

My accountant costs me in excess of 1k a year but does absolutley everything, all the bookwork, VAT, TAX, the works..

 

Last financial year he picked up on the fact that I was still owed over 6k that I thought had already been paid, he then saved me quite a bit off my tax bill so if you look at it in those terms, having an accountant can also be a good investment in yourself and you're business.

 

On an even more positive note.. I used to do all my accounts, tax, vat etc myself and found I spent all my spare time trying to keep it up to date.. I hate doing accounts so now I don't have to do any of that.. just hand him a massive pile of paperwork at the end of the quarter and concentrate on running my business.

[Ty Korrigan]

Hello all,

I'm running a wee chipper, Greenmech CS100

I'm budgeting for 5euros p/h fuel/oil/filter.

A life of 1000hours with a re-sale of 500euros... perhaps...

So thats approx 5euros p/h

Blades are expensive and one of us put something through that damaged one side of the blades after only 10hours or so.

So I must allow for the 'cockup factor' in costing.

In short, I reckon that allowing 15euros+ p/h costs is fair for even this smallest of chippers.

What say the venerable ones here?

Ty

[arbclimber]

Completely agree with Dean regarding the use of per hour calculations. Per annum calculations serve no useful purpose in this instance.

 

Dean, your comments about people conducting bad business have got me thinking. This is no way a pointless dig, so please hear me out.

You seem to have huge respect on this site and have your head screwed on from what I have read but, i'm not sure i'd take criticism regarding business from someone who openly admitted making a profit of c £20k for a whole years graft.

 

Hope you take this post in the spirit its written. Just seems to me that with the kit and experience you have, to make only 20 ish grand a year, it may be you thats getting it wrong.

 

Advanced apologies if I have offended you, that is never my intention. However, I think you know i'm a 'type what i'm thinking' kind of bloke.

[Kev Stephenson]

Yeah but so will a high one.

 

I would rather have some work and earn money than no work and earn nothing.

 

Sometimes I think I live in a different world to some people.

 

Its one where cost matters.

 

That works well provided you are actually making money after ALL deductions. There is no point going out on a £200 tree if your costs are £150 (including hourly wear on all kit) and you have to pay £50 for the labourer. You have been out knackering yourself and your kit for nothing.

 

I work 3 days a week and find I can pick and choose my jobs leaving the low/no profit jobs (and pain in the arse customers) to those who feel the need to break their balls 40+ hours a week to increase their turnover (not necessarily profit). I honestly don't think I would earn a lot more by working 5 days over the three I am doing now

[Dean Lofthouse]

Completely agree with Dean regarding the use of per hour calculations. Per annum calculations serve no useful purpose in this instance.

 

Dean, your comments about people conducting bad business have got me thinking. This is no way a pointless dig, so please hear me out.

You seem to have huge respect on this site and have your head screwed on from what I have read but, i'm not sure i'd take criticism regarding business from someone who openly admitted making a profit of c £20k for a whole years graft.

 

Hope you take this post in the spirit its written. Just seems to me that with the kit and experience you have, to make only 20 ish grand a year, it may be you thats getting it wrong.

 

Advanced apologies if I have offended you, that is never my intention. However, I think you know i'm a 'type what i'm thinking' kind of bloke.

 

No worries mate, I can make more if I choose to but I dont. I only choose to work 3 days a week actual tree work and that included 1 month off over xmas

 

I earn enough money to live comfortably off and the rest gets ploughed into the business, I have or had a Landcruiser Amazon, a landroverr, a brand new chipper, an 18m tracked mewp, 2 acres of prime land and all my kit is as new.

 

If you invest youir money, you can make a smaller profit and not pay as much in tax. Invest it rather than give it to the taxman

[renewablejohn]

I'd totally agree with that, and know the scenario well!!!

 

My accountant costs me in excess of 1k a year but does absolutley everything, all the bookwork, VAT, TAX, the works..

 

Last financial year he picked up on the fact that I was still owed over 6k that I thought had already been paid, he then saved me quite a bit off my tax bill so if you look at it in those terms, having an accountant can also be a good investment in yourself and you're business.

 

On an even more positive note.. I used to do all my accounts, tax, vat etc myself and found I spent all my spare time trying to keep it up to date.. I hate doing accounts so now I don't have to do any of that.. just hand him a massive pile of paperwork at the end of the quarter and concentrate on running my business.

 

Highland Forestry

 

I am pleased you are happy with your accountant. As a qualified accountant myself its always nice when people appreciate how much an accountant can help and assist a business. Unfortunately not all accountants come up to these standards but when you do find one stick with them. I wish I could comment more but giving general advice is now taboo as far as the accounting bodies are concerned.

[josharb87]

out of intrest dean, are you expecting to keep youre bandit for the full 20 year/2000hour life youve given it, or chop it in for a new one before that time? did that calculation take into account the resale value after the 2000hour deano life?