Here in S OZ I suspect that some surveyors do not reflect the cost of purchase and ongoing maintenance of their total station and GPs in their hourly rate.... Quaintly using the logic when using the GPS " but I can get more measurements in the time, so can do more work"
Effectively an indicative charge out rate for your expensive gear is the weekly rental charge you would pay a company to hire it.
Surely your surveying gear as well as your grey matter are there to make you a good income, not to be a generous public benefactor, so those you service profit further.
RADU
Equipment charge out...
There you go again. Making sense. Is that allowed anymore?
Surveyors are notoriously poor business people. What you are suggesting is indicative of that inclination.
My thought is that if using one method would take 10 hours at $X per hour and using a different method would take 5 hours, then it makes sense to charge $2X per hour and let the extra $X cover the outrageous costs that go with owning the second set of gear as opposed to the first set. If it's worth a $1000, let's say, with the old gear, it's still worth a $1000 with the new gear.
For got to say that no mater whether you pay cash for your purchased equipment or purchase on credit you need to make a profit from your outlay. Cash purchasers wanting a percentage higher than borrowed money interest and those on finance need to bill the difference between the two so have similar charge out rate.
? pie in the sky.
RADU
Simple math, which we are all supposed to do well.
I will use the standard 40 hour a week model as an example to illustrate this.
There are 26 weeks in a year, with 5 working days in each week, which equals 260 working days. Let's take away the average 10 statutory holidays, leaving 250 effective days of work with the equipment.
Suppose we wanted to pay for the cost of the equipment, interest if you financed, support agreements, yada yada, etc. over 3 years. For simplicity, lets say you are all in for $75K for a Robot, GNSS setup, Tripods, Level, Rods, Pet Rocks, etc.
$75,000 / 750 days = $100 daily equipment charge, or $12.50 an hour.
So, take the total equipment cost divided by the estimated number of days it will be used during the time you want to pay it off gives you a daily rate.
I've worked at three employers who actually make money on their equipment charges. This is not an odd concept. Equipment is a huge part of being a surveyor, so charge for it.
That's my 0.2%.
> There are 26 weeks in a year
6 months of vacation -- sounds great!
Oh, god... CORRECTION, 52 weeks in a year.
I feel like Michael Bolton in Office Space right now. When I started the post, I was writing out something overly complicated that had to do with pay periods and billing cycles.
Where is the Face Palm emoji? +o( :poop:
No problem
The 250 was the number you intended to have. Put another way, 52 x 5 = 260, less 10 holidays = 250. To this you can subtract some additional number of days per year for your local climate when you absolutely would not expose the equipment to the elements. That could be another 20 or more days. Then consider how reliable your work flow is. How many days do you simply have no work for which the equipment is needed? One more thing for small operators to consider is the number of days that equipment sets idle because YOU are doing research, drafting, meeting clients, attending continuing education programs, healing from that muscle pull from not quite jumping that chain link fence on the first try, waiting on one of the key pieces of equipment to get back from the repair shop, etc. For many small operators the actual number of days of use could easily be much closer to 100 per year. Again, you must cover the total cost of owning that equipment, not just the list price. Interest isn't as big a factor as it once was but it can still be significant. I remember paying nearly 18 percent on one major purchase. I remember getting caught in a downpour resulting in excessive moisture getting inside the TS. The repair bill was more than the invoice that was sent out for the job we were doing at the time. One should be a serious pessimist when evaluating the true cost of ownership.
No problem
Looking back, I made it a little too simple, but the jist of it is basic. It really depends on what one does. If I were to strike out of my own, I would probably rent most of my equipment to start.
I do most of my work fixed fee, for several reasons;
- I don't have to keep time sheets!
- The client can budget their project
- It reduces any confusion on price
- I don't have to itemize my costs and then add a profit % (although I do it in internally, just not exposed to the client.)
I would be concerned that I would appear as a tradesperson if I started charging mileage, equipment, stakes, etc. where would it end!
I have examined my cost of business, the local market and the value of my services, I expect that my clients will assume that I have the appropriate equipment and the means to get to the project.
Dtp
No problem
I think you should have said "That's my 0.1%."
No problem
Glad you picked up on what I was insinuating. 😉
Don, I understand your fixed fee approach , but today clients now want to be able to nit pic your charges and get their rocks off by saying , "but your hourly rate is offensively high"
Back to the fixed fee approach, which I prefer, you still need to first assess all the components that go into determining your hourly rate.
Yes the experienced diligent know that the "how long is a piece of string" when it comes to costing many difficult surveys. Sadly what I am finding is literal drive by surveys by throwing corner markers in on wing and prayer surveys. Making the astute surveyor appear to be rip off merchants when the land owner has only paid the sleeper price for future conflict.
RADU