The hardest part of being a building contractor is figuring out how to grow your business. Doing the work is only part of the job. You may find yourself spending just as much time finding new projects and deciding when to invest in new tools and equipment.
If you install rain gutters for a living, the biggest equipment investment you are likely to face is a gutter machine. A new K-style seamless gutter machine can cost anywhere from $5,000 to $15,000.
At those prices, does it make sense for you to buy your own gutter machine?
In many cases the answer is "yes." The cost savings from owning your own machine are reason enough to buy. But in addition, having your own gutter machine allows you take on bigger jobs, gives you more control over your work schedule and opens opportunities to be a subcontractor to other companies.
Lower Material Cost
First, let's take a look at the cost saving in having your own gutter machine. To roll form your own gutters it costs between $0.70 and $0.80 per foot. Buying the same gutters from a supply house will cost about $1.25 to $1.50 per foot.
For a typical-size house, you can save $100 - $200 in material costs per job using your own gutter machine. That means you could potentially recoup the cost of a low-end machine after 30 jobs, and recoup the price of a high-end machine in as little as 75 jobs.
If you have a two to three-man crew installing one job per day, the machine will easily pay for itself in a few months.
Bigger Jobs
Seamless gutters are the norm in the industry today and highly in demand. But getting them to the job site can pose some tricky logistical problems. Basically, the size of your truck ends up determining how long of a gutter you can install. If a job calls for a 50-foot length of gutter, you'd better have a big truck.
Of course, you could skip the seamless option and transport your gutters in sections. But that requires more work putting the gutters together on the jobsite, which creates a lot more opportunities for leaks in your finished gutters. More leaks means costly service calls to fix a problem that could have been avoided in the first place.
With your own gutter machine, transport isn't an issue. Just bring your machine to the jobsite and get started. That means you can take on bigger jobs with less headaches.
Greater Control
Instead of buying your own machine, you might choose to hire a contractor who has their own gutter machine and let them roll form your gutters at the jobsite. That's a great option that reduces waste and shipping costs.
The only downside to this option is that it depends on the availability of the delivery service. During peak season a company with a gutter machine can be in demand, and you may have to wait in line behind their other jobs.
If there is a scheduling delay or they are unavailable for any reason, it will hold up completion of your entire project, which means you don't get paid on time.
New Job Opportunities
Instead of hiring a delivery service that has their own gutter machine, you can be that seamless drop off service yourself, selling materials to other gutter installers. That means you can make money without having to hang gutters. Just drive to the jobsite and turn on your gutter machine.
It also gives you a chance to win more gutter jobs. If a roofing company wants to subcontract their gutter work, a contractor with their own gutter machine has a big advantage because of their greater flexibility.
Resale and Tax Breaks
Finally, keep in mind that your gutter machine may not cost as much as you think.
Your machine is a tax deductible business expense and may be eligible for a generous tax break given to small businesses. Section 179 of the Internal Revenue Code allows businesses to immediately deduct up to $125,000 in 2008 business expenses. In the past, such expenses had to be depreciated over several years.
Finally, keep in mind that there is an active market for used gutter machines, so you may be able to resell your machine a few years down the road. A used 5-inch machine in good condition will sell for around $2,000 - $4,000.
That means if you take good care of your machine, you can recoup part of its cost down the road.
When you add up all these advantages, owning your own machine is an easy call.
Mike Milliman is a managing partner of GutterSupply.com, the leading online seller of gutter supplies and equipment. Visit their web site to learn more about gutter machines.
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