How to pricing the rental equipment

[Nick Nie]

We are a new sign company and has no bucket truck, we have to rental the boom lift or scissor lift for installation, but those equipment we only need for 2-3 hours but the rental company charge for the whole day, i will have to add the rental cost into the installation. compare with other sign company, they offer 175 HR for truck and installer, the same job i have to quote rental+ labor, it make my installation pricing is super high. any of you have similar situation and how you guys handle this quote?

thanks!

 

[Gino]

Anyone starting out will be in the same boat as you. You're at a disadvantage when it comes to bigger things, but the bigger guys with that equipment, generally have a lot more overhead and it's all figured into their pricing. Try to align yourself with someone who will do these jobs for you and give you a break on their equipment and work. Better to do that, until you can get on the same playing field than to price yourself completely outta the market.

 

[equippaint]

You don't have much of a choice unless you're going to eat the cost. Another issue is running into an unresolvable problem on the job such as weather and you still have to pay for the lift a second day.
No doubt that buying certain equipment gives you a competitive advantage, it's why people do it. If this is the route that you want to go in terms of what jobs you bid, then you have to have the tools to do them. When you start out it's natural to try and get every job that comes your way but the best thing you can do is turn down what you cant produce and really focus on what you can. I wasted a lot of time and money my first couple of years in business by not saying NO enough.

 

[bannertime]

Before we got our current lift truck we rented tow behinds for jobs. It was pretty nice and we still rent occasionally. We were lucky enough to setup a trade account with the rental company for self promo and resell graphics. Then we were able to charge a flat fee and not really have to worry about it.

 

[Dan360]

We only rent for installing murals or high up windows and the such. At that point our cost is our cost unfortunately, but we've never had complaints about the additional charges. If we're not installing vinyl then we have 2 companies that we contract the work out to like take down and put up of lightboxes (they bring them to us to reface), pole banners etc.

 

[Texas_Signmaker]

Yea, I just don't partake in a job that requires a bucket and that I'll only make 1 or 2 hour of labor on. My cost for a bucket is $160/4hrs or $240/day. I really only use it to install signs that I make or signs that are sent to me that are part of a larger project. Usually It only works out for me if the total job is over $1000.

If someone is calling asking you to hang a banner you can't compete at $160. Just know what you can do and focus on that

 

[WhiskeyDreamer]

You could align yourself with an installer that'll give you a little bit of a break on installs. I did this until we got our own bucket truck. It allowed me to not be absurd in my install costs.

The other option is to bundle all your installs into one day so you can get the best out of the rental rate. This doesn't help if you only have one or two jobs for installation, which is why the first option is actually your best bet.

 

[Billct2]

We can rent a tow behind pretty reasonably. The time to go get it and return it can add an hour to the job though. But given that, most shops charge $$$ for bucket trucks, so we can usually be fairly competitive for most jobs. But as has been said, it has to be a decent sized project to make sense. If it's something that will only take an hour and really requires a bucket truck we may have to pass. A lot of shops are going to charge a minimum for jobs anyhow. Shop around for your rentals, see if you can find a place that will do a half day rate. And we do a lot of installs with ladders....

 

[MikePro]

if you're renting, and still trying to be competitive, then you can't upcharge your rental costs while also upcharging your labor costs.
rental company is already upcharging you for the rental, so its no wonder the "other" company comes-in under your bid with their own equipment.

 

[Greenlight signs]

if i have to rent a lift to do a job, then on my quote i put the price it was to rent the lift to the nearest dollar. home depot has the best price around here for towable boom lifts.

 

[Texas_Signmaker]

Ya'll need to shop and try to find local, independent rental companies. The big national ones will rape.

 

[Billct2]

"then on my quote i put the price it was to rent the lift to the nearest dollar" Why? Do you also put the cost to buy the materials? I may break down the cost into the price of the sign
and the install price, but not my costs.

 

[Greenlight signs]

"then on my quote i put the price it was to rent the lift to the nearest dollar" Why? Do you also put the cost to buy the materials? I may break down the cost into the price of the sign
and the install price, but not my costs.

No, but i do see your point. never thought of doing it that way. but i will now.

 

[ddarlak]

Your options are:

#1 - Spend money to acquire equipment needed to offer the services you wish to perform.
#2 - Rent equipment to perform services you are not equipped to do and make less money than the people who chose option #1.

 

[Billct2]

Buying the equipment doesn't necessarily mean making more money, unless you are committed to making sure it gets maximum use. Buying it is only the first cost, then the insurance, maintenance and training are added on top of that.

 

[asd]

we add the cost of equipment rental at cost, we are already making money on the sale and installation of the sign, when we do the installation we let the customer know how much the installation is going to be and in that price the equipment rental is included.

 

[kcollinsdesign]

Your options are:

#1 - Spend money to acquire equipment needed to offer the services you wish to perform.
#2 - Rent equipment to perform services you are not equipped to do and make less money than the people who chose option #1.

Or (#3) sub-contract services that are not in your core capability and make more money than the people who choose options #1 or #2.

 

[davearama]

I used to build the cost of the rental equipment (usually a tow behind lift) into the total cost of the project as part of the item cost. The quoted price would include design, materials, fabrication, mobilization, installation and equipment rental. I'd typically list all those items in the body of the quote but I wouldn't break them out as separate costs. Just one for the whole item.

Now, I'll make "equipment rental" a separate line item. Not sure why, but seems prospects seem to take to this better. I'm a franchise so I mark rentals up enough to cover my franchise fee and figure 1-2 hours of labor for the pick up and drop off time at where ever I'm renting it at. Rental equipment is't a profit center when I need to use it.

As to being competitive or pricing you out of the market...sometimes it will, sometimes it won't. Depending on who your prospect calls, like everything else we sell sometimes we're less, sometimes we're more. Sometimes the price is critical and sometimes it's not.

So build it in, throw your price out there and sell like hell! The low guy doesn't always get the deal.

 

[bannertime]

Or (#3) sub-contract services that are not in your core capability and make more money than the people who choose options #1 or #2.

That is pretty misleading. You can only make money sub-contracting if your sub-contractors price's are low enough to mark up and still be competitive.

 

[Billct2]

"You can only make money sub-contracting if your sub-contractors price's are low enough to mark up and still be competitive."
and if you can find one both reasonably priced and reliable enough to show up. The problem I have had using install subs is they are mostly doing installs for other shops to supplement their own work...and their own work takes priority.