Hello all. I am considering a mulching head for my Cat skid steer. I had two Marshall Tree Saws and both were complete junk. The first ones arrived with a leaking hydraulic hose that Marshall to me to just "go get fixed". The hydraulic seals blew out after 20 or so hours on that saw. The second saw blew out after about 2 hours. Totally overpriced and under performing junk... I have a hundred or so acres of my own that need a mulcher ran through and several people want work done as well. I was charging $75/hour with the Marshall but I've heard that the mulchers can command a higher price. Does anyone have ideas on what the going rate is for a skid steer equipped with one? They are pretty darn expensive to own and operate at 75 bucks an hour. Thank you for any insight you can provide.
Running a 299D XHP at $75/hour for nearly anything more than idling is a losing proposition out of the gate. Hourly Breakdown: $28.33 Depreciation ($85k/3k hour life) $20 Operator $14 Fuel (3.7gph @ $3.79) $5 Tracks (optimistic) $1.50 Preventative Maintenance $1.50 Insurance (750 hours/year) That's $70.33/hr in expenses right there before any attachments are added, any overhead, and safety margin, or profit. I can't think of anything I would want to do for less than $100/hr aside from acting as a static power plant using the aux hydraulics... and I haven't found those jobs yet!
This isn't as related as much to this as it is to general estimating. But you seem to know what you are talking about, lumberjack, would you be able to give more of an explanation to how you compute that 'depreciation' cost to factor into an estimate. Obviously it varies from machine to machine. Do you just take the estimated life of the machine divided by the total cost? Is there a database or anything that gives you the estimated hour life of a machine or is all of that knowledge just learned via hard knocks university?
Pretty much, acquisition cost divided by the hour estimate of your choice. On my track loader I chose 3k hours as the engine, final drives, main pumps, etc should make it to there without requiring replacement. A machine is a sum of parts, in theory its service life is only limited by parts availability. A practical example, in February I bought a Kubota KX121-3 for $35k with 818 hours on it. I want it paid off by 2500 hours. 2500 hours was chosen to have the machine paid off while still retaining ~$20k in resale value. That means I need to pay off $35k in 1682 hours which is $20.80/hr. It's financed for 4 years, so 1682 hours/48 months means I need to make one payment every 35 machine hours. If I have a busy month with it, I may make 2 payments in a month. In the winter I will get "hours ahead." The premise is it will get paid off at 2500 hours, or 48 months, whichever comes first. I don't want to make payments only monthly as I might end up with a machine with 3k hours and still not paid off. Regarding selecting the hours for depreciation/payoff... it's up to you. If you get overly optimistic, you're only cheating yourself. It doesn't matter if you're paying cash or financing, depreciation/replacement cost needs to factor in. At 3k hours my track loader will owe me nothing, anything after that is gravy. If you'd like you could also budget for big money replacement items like the final drives, drive pumps, and engine. MSRP on those parts for my MTL325 (Takeuchi TL250) is currently around $30k. I hope they make it to 5k, but that's optimistic.
Awesome, thank you very much for that explanation. This is some good info I am going to have to remember.
Thanks for the feedback regarding depreciation Lumberjack. In my case your numbers were off quite a bit though. I work for Cat and the purchase price and track price is way off. That's how I carved out my niche around here to make a few dollars. Everybody and his brother is doing "bobcat" work for 75 an hour. I can charge the same thing with a more productive machine and still pocket a few bucks. It's worked out fairly well but I am still considering raising the price. Any ideas on what the average going rate for mulcher work is? There's no way even $100 is going to fly with that.
In Georgia they charge 175.00 per hour. I have two heads. A bradco magnum and a loftiness g3 I think it is, I'll have to look at it again I can't remember. They're both good heads and I really can't tell much difference between the two. I'd says the bradco has a finer finish product but they both do a good job. The teeth are expensive to replace and your machine will eat some fuel because you run it wide open.
Oh yeah, 3.7gph is a 65% load on my 325. When pushing out fill I will burn around 4.5gph. On a full day, if the trucks keep up and I stay in the loader, we will burn 30-35 gallons. Mulching will burn around 5 gph I figure, provided you can keep the head working. Fuel burn is a good indicator of duty cycle and production assuming you're not bogging the engine with poor technique. The more production you can accomplish per hour, the more you can justify per hour.
$150-175/hr. makes the upfront investment on one of those bad boys a little less scary... lol.