You always need the right tool for the job, but where do you get it? You can own it, rent it, lease it or even borrow it, depending on how long you will need it. These bottom-line decisions involve everything from $50 power tools to $500,000 excavating equipment, fork lifts, scissor lifts, snorkels, mobile cranes, welding machines, water pumps, generators, trench boxes, ladders and scaffolding.
The best place to start is to inventory what you now own and what each item costs. You should calculate how many hours each item has been used during the past year.
Your next step is to go shopping. America has become a “do-it-yourself” nation with tool rental shops that would easily fulfill your needs for those one-time tool needs. Walk through their stores to see what you can rent for far less money than buying it.
You should also check out the large equipment dealers and discuss rental rates, leased-purchase options and outright purchases of new or used equipment. You could also buy or sell your equipment at an auction.
You need to discuss your needs and feasible options with your chief financial officer, comptroller, tax advisor and/or accountant to determine what route would produce the most bottom-line profits. Keep in mind, you also will have maintenance costs and jobsite delivery expenses for equipment that you own.
Our family company did site work, utility and industrial construction, as well as building commercial buildings. In addition to buying, renting and leasing all of our major equipment, we also rented our equipment to other contractors and customers.
We monitored all of these costs to ensure our bottom-line profits and concluded that contracting firms should purchase any equipment they can use productively for half of the year. Any item that is needed for less than six months a year would be more economical to rent or lease.
You should consider this use and cost of expensive tools and equipment in your value-engineering at bid time, before you start a project, when you coordinate your schedule with the general contractor, and when you are preparing to do that work. You should look at your entire workload to be sure that you do not need two machines this week and have nothing for your only machine next week.
Horse Trading On The Jobsite
But your biggest cost savings for short-term use of expensive tools and equipment is borrowing it from another contractor on the site. We call this “horse trading” or sharing. Typically there are five to 10 other trades working beside you who are glad to share their equipment for those short-term tasks that would otherwise require you to rent or move in your own equipment.This is only a sample of what goes on every day throughout the country. There are no backcharges or signed work orders involved, but you need to document what you give as well as what you receive in order to eliminate any misunderstanding or abuse.
Using Your Own Equipment
Let’s look at some cost-saving strategies of using your own equipment and tools:1. You need a maintenance checklist for each item to keep cutting edges sharp and engines in good running condition. This checklist should accompany that machine to the jobsite.
2. Your operator needs to be trained to operate that equipment in a safe and productive manner. You need to have a back-up operator available.
Fork-lift operators and powder-actuated tool users must be certified. Your equipment suppliers can arrange this certification.
3. Using flex-time will permit work in restricted areas and also will get the most production from that equipment.
4. Your foreman needs to do a final check-up at the end of each shift to secure or lock up all tools and major equipment. In addition to preventing tampering, vandalism or theft, you must consider possible accidents with children playing on your site and/or curious sightseers.
5. Schedule your transportation moves to eliminate wasting costly hours sitting in rush-hour traffic. Early morning or early evening hours are generally free of major traffic.
6. Return that tool or piece of equipment to your shop as quickly as possible. In addition to being safer and free from theft, someone else in your company might be waiting to use it.
You and your management team should always keep in mind that even though you own that equipment, it is not free. Many companies actually charge rental against their jobs to remind their foremen of what it is costing.
Renting
When you do not own whatever tool or piece of equipment that you need and you decide to rent, consider these strategies:1. When you are not certain what size to rent, always get one size bigger to be certain it will do the job. What little it may cost for the larger equipment will be offset by less rental hours. A larger machine also works easier and safer.
2. Have the delivery person instruct your employee on the proper use and care of the machine. Each tool and piece of equipment is different because of different models and manufacturers.
3. Do not let the equipment sit idle. Coordinate your work to complete the task and return it to reduce rental costs.
4. Offer any possible assistance to the other trades to encourage and continue your horse-trading atmosphere.
