Benefits of new equipment

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Since I started the company, for the most part I have always purchased used equipment. I have searched craigslist autotrader you name it. Each year I have tried to purchase one new truck for around 5 or 10,000 dollars and this worked in the beginning.

The trucks would break down occasionally, but with only one or two crews, it wasn’t the end of the world. I could figure out a way to get it fixed. It wasn’t too stressful and there wasn’t too much down time.

Since we have grown, the repairs have become such a headache it is almost unmanageable. Not just the trucks but everything- Everything seems to be broken. It is more than I can handle alone, and mechanics are generally unreliable. Building the company has enough challenges without equipment- people, scheduling, customers, weather.. I don’t need another variable of what equipment is working and what equipment is at the shop.

Besides all theses factors, it takes considerable time to shuttle equipment around to get fixed and creates downtime for the crews of which we have to pay them, as well as making us appear unreliable to our customers.

Equipment repairs also hurt our cash flow. For example, a new dump truck financed is roughly $700 a month. If we have to replace a rear end in a truck like we did this spring when cash flow is already tight, thats $4000 out of pocket on the spot that we can’t plan on!

For this reason, I am working on a replacement schedule for all equipment. For a long time, I have been replacing weed wackers every 2 years. This is the end of their warranty period and they usually start to have problems after this amount of time. We use them hard and they get beat up.

Commercial mowers- I am starting to lean towards about 3 years. Our 3 year old machines had electrical problems and needed new starters.

Trucks- I would like to keep at about 5 years. I think after this you start to run the risk of needing some repairs.

On top of all these clear benefits of new equipment (cashflow, reliability) there are also other factors such as image (clients see you driving new equipment) and tax write offs. I got slammed for the first time this year with a $1800 tax bill and had I instead just purchased a new truck- that $1800 would have gone straight into the new truck.

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