The purpose of this article is just to give you a quick overview of the equipment tab within your LMN Budget. For a complete tutorial, we strongly recommend you watch our onboarding videos - specifically Step #2 under LMN's Budgeting & Estimating 5 Step Onboarding.
- Only include vehicles/equipment that go onsite to jobs. Any other equipment (e.g. owner's truck, a loader at the yard, small tools/equip) belongs in the overhead budget.
- In the General Expenses section, make sure you do not include 100% of your costs. Some of your fuel/repairs/insurance/other goes to overhead vehicles. Estimate the % you should assign to your equipment budget vs. the % you should assign to your overhead budget. (e.g. if you spent $25,000 in fuel and you have 1 owners truck and 4 crew trucks, you might allocate 80% of fuel to your equipment budget and 20% to your overhead budget).
- Do not forget to include a forecast for Equipment rentals in the Equip Summary.
- You will have four options for your Equipment Class: Owned, Leased, Group and Custom. Please see more information about the Equipment Class options below.
- Use the Owned equipment calculator for any equipment that you either own outright, or are financing with the intent to own.
- Tips for the Owned equipment calculator:
- The equipment calculator's Replacement Value should be what you'd spend on a replacement, not what it's worth today (e.g. If you buy new trucks for $35,000, but you have one that is 8 years old now, use $35,000 for the replacement cost, not the value the truck is worth today).
- Include all the years you'd expect to own the equipment, not just the number of years remaining (e.g. If you keep your trucks for 8 years on average, and you have a truck that is 6 years old, you should budget for the full replacement value and the full years life (8 years) not just the 2 years remaining).
- Use the Inflation/Interest Rate to budget for interest payments and/or use 1%-2% to keep up with annual inflation.
- Use the Leased equipment calculator for equipment that you lease.
- Use the Group equipment calculator for groups of equipment that go together (e.g. Maintenance Trailer + Tools).
- Tips for the Group equipment calculator:
- Include any expensive equipment you have in your trailers (ie. Mowers, Blowers, Trimers, etc.).
- You do not need to add small tools individually to this list. Instead, you can add them in as a line item in the Group area (ie. Hand tools).
- Use the Custom equipment calculator if you want to enter your own annual equipment recovery costs.
- You should budget for all of your equipment, even if it's "paid off". You should be charging your customers to use it and saving to replace it.
- Remember - your budget is a forecast. If you plan on buying more equipment this year, you should include that equipment in your budget.