EQUIPMENT: FINANCE, BUY, OR RENT?
The decision is set by utilization, and the sticker price barely moves it. Run a machine more than about 60% of working days and owning it, financed or bought, beats renting. Run it less than that, and renting is cheaper than carrying an idle asset. Cash position and the replacement reserve decide whether you finance or buy outright.
Most owners run this comparison backward. They set a monthly payment next to a monthly rental rate, see that the payment is lower, and buy the machine. The payment isn't the cost of the machine. The cost is the payment plus insurance, registration, storage, depreciation, and the capital that's no longer available for payroll, all divided by the number of days the machine turns a wheel. A machine that sits most of the year costs more per working day than the same machine on rent, however good the payment looked.
WHAT IT MEANS.
Equipment utilization is the share of available working days a machine runs, and it's the figure that decides whether owning beats renting.
Rental rates aren't charity. A rental company prices its own idle time and its own profit into the day rate, which is why a machine you keep busy is cheaper to own than to rent. Run the machine less than that and you become the one absorbing the idle time, without a rental fleet to spread it across.
WHERE THE DECISION GOES WRONG.
The sticker price makes the decision
Most subcontractors decide by setting a purchase price or a monthly payment against a rental rate. Neither figure is the cost of the machine. The cost is what the machine consumes in a year divided by the days it works, and until somebody counts the days, that comparison can't be run at all.
The idle machine keeps billing you
An owned machine that's not working still carries insurance, registration, storage, and depreciation, and the capital sunk into it's capital no longer available for payroll or materials. None of that stops when the machine parks for the winter. Rented iron carries no idle cost whatsoever, which is the whole reason a utilization threshold exists.
The specialty machine bought for occasional use
The common trap is buying specialty equipment for occasional work on the assumption that owning looks cheaper. It looks cheaper because nobody calculated the utilization first. A machine bought for two jobs a year is the most expensive machine in the yard, measured per day worked.
Cash and credit both get spent
Buying outright uses cash and reduces borrowing capacity. Financing uses credit capacity and adds interest on top of the same idle carrying cost. Renting touches neither the cash nor the credit line, which is why the buy-against-finance question only gets answered after you know what the cash position and the replacement reserve can carry.
WHAT IT LOOKS LIKE IN DOLLARS.
Run a machine more than about 60% of working days and owning it beats renting, whether you buy it or finance it. Under 60%, or for a one-off need, renting comes in cheaper than carrying the asset. The reason is that rental rates cover the rental company's idle time and its profit, so above the threshold you're paying for somebody else's parked iron.
One verified civil client at $7.1M in revenue owned a machine sitting idle on one job while renting the same type of machine on another job. Nobody was tracking utilization per machine, so nothing in the reporting caught it. The company paid for the same capability twice at once, which is what guessing costs.
UTILIZATION FIRST, CASH SECOND.
A machine running more than about 60% of working days should be owned, because the rental day rate has the rental company's idle time and profit built into it. Buy it outright if the working capital position is strong and the purchase won't put payroll or materials at risk. Finance it if the cash is worth more in operations, which trades ownership cost for interest expense and keeps the money working.
A machine under the threshold, or one needed for a single job, should be rented. Idle owned equipment carries insurance, registration, storage, depreciation, and the cost of the capital tied up in it, and renting carries none of those. Off the books is the right place for iron you can't keep busy.
Utilization decides own against rent. Cash position decides buy against finance. Those are two separate decisions and they get made in that order, because a high-utilization machine is worth owning whether or not you can pay cash for it, and a low-utilization machine is a bad buy at any interest rate.
SPM builds the equipment cost basis and tracks utilization per machine as part of CFOS, so the decision runs off a number instead of a feeling. Once the working days are counted, the own-against-rent call takes about five minutes. It also catches the case where a company owns one machine and rents the same type at the same time.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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