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Equipment cost?

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flyingS

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Northern Sandhills Just East of Soapweed
Needing a little insight. I am looking at a job and considering supplying my own equipment. I probably need to come up with 2 scenarios, one with hay equipment and one without. I would supply everything that was needed for tools and equipment. The ranch is a new purchase and the owner would have to buy all of it anyway and I already have most everything. What is it worth, I will just call it a 600 cow outfit. I do not have a list of all equipment but can tell you the basics. Fully supplied shop, 2 ranch pickups, 2 stock trailers, Semi with flatbed and groundload trailer, loader tractor and feed tractor with 2 bale bale unroller, 4 wheeler and fencing trailers, portable panels and loading chute, all fencing tools and well tools, portable welder/generator, vaccine guns, the list goes on. Can anyone give me any ideas?
 
Let's see...

shop tools & supplies - $15,000
2 used pickups - $20,000
2 stock trailers - $15,000
Ranch Semi tractor - $20,000
Flatbed - $10,000
Groundload livestock - $20,000
2 farm tractors & bale unroller - $50,000
Misc. tools, trailers, corral equip. & etc. - $50,000

That totals $200,000 and that could be high, low, or somewhere in the ball park depending on availability and your mechanical ability to make lower cost farm junk, keep on workin'.

I would think there would have to be a substantial income advantage to supplying all the equipment yourself. I don't know... something on the order of getting half the calf crop or so for wages.

Best of luck.
 
who's putting up the hay you're gonna feed? how much ground/hay if you're doing it? guy'd want a pretty long term contract to make this kinda investment. Does 'new owner' have ranching background? If not---'financial disillusionment' could be an obstacle. Fuel's horrendous---who pays for that? Bale wrap or twine? Parts repairs maintenance----lots of things to work out.
 
If you figured a 10 year life with replacement cost on your stuff . that would be a big # . you could walk out of there with old stuff & no money to buy more .
I would let them buy their own . A clean cut is way easyer to make then .
 
I would treat the haying part just like a custom haying job. X amount to swath x for raking x for baling.
 
lefty said:
If you figured a 10 year life with replacement cost on your stuff . that would be a big # . you could walk out of there with old stuff & no money to buy more .
I would let them buy their own . A clean cut is way easyer to make then .
Click to expand...

Having been in a couple deals somewhat similar, I would second this motion.
If there is custom haying to be done, that is a different situation that an easy dollar figure can be applied to.

I have no idea how you would determine an hourly rate for a multi-dose syringe or a calving chain. :D
 
First get yourself a twenty foot pole.

Used on those deals you wouldn't touch with a ten foot pole.

if you buy the equipment he can walk away from the deal at anytime and you have money invested and you are bound to a certain degree. If he wants to make a good deal he needs to offer some form binding contract on his part.
If he is really into a ranch then buying the equipment won't be a big deal to him.
 
katrina said:
After the frickin mess we just got out of....."Run Forrest Run!!!" Don't do it!!! You will take the biggest sqrewin of your life.... Even if it's family!!
Click to expand...

Ain't that the truth, especially those who don't have a connect with the farm life anymore and only see $$$$$$$$$$$$$$
 
Here is my take on it. If I can furnish the equipment, it allows me to build some assets. I already own most everything that I would need. Why you ask. First off I have bought most of this equipment under value, I look at all of it as liquid assets, the rest I have accumulated over time. I need a share of it to operate on my small scale basis. The other side of that is that I don't plan on working for someone else for the rest of my life. If I provide the equipment and can get paid for it, I will be building assets and eventually should be putting cash in my pocket. I can intern use the return to invest in land or cattle or whatever makes sense at the time. If I am going to bust my butt to make someone else money I may as well make a little myself. If I were in the owners shoes the value is in not paying for maintance and repair. We all know that if it comes out of your own pocket you take better care of it, generally speaking. The advantage for my family is that when the time comes and we can step out on our own we will be set up and ready and will not have to buy all the equipment at once. Maybe I am crazy, but I have found that if I am not willing to take some risk, I probably better be happy with being a hired hand and not ever having something of my own. I can't tell you how many times I have heard if I would have started 20 years ago I could have made something work. I guess it seems like an opportunity for me to get off my can and get started.
 
Thats ok, just protect yourself. Just make sure you are protected so you don't use up your assets and don't get paid.
 
Don't put to much of your investment in iron. Equipment today is designed to wear out. Besides that, today equipment becomes obsolete in just a few years.
 
flyingS said:
Here is my take on it. If I can furnish the equipment, it allows me to build some assets. I already own most everything that I would need. Why you ask. First off I have bought most of this equipment under value, I look at all of it as liquid assets, the rest I have accumulated over time. I need a share of it to operate on my small scale basis. The other side of that is that I don't plan on working for someone else for the rest of my life. If I provide the equipment and can get paid for it, I will be building assets and eventually should be putting cash in my pocket. I can intern use the return to invest in land or cattle or whatever makes sense at the time. If I am going to bust my butt to make someone else money I may as well make a little myself. If I were in the owners shoes the value is in not paying for maintance and repair. We all know that if it comes out of your own pocket you take better care of it, generally speaking. The advantage for my family is that when the time comes and we can step out on our own we will be set up and ready and will not have to buy all the equipment at once. Maybe I am crazy, but I have found that if I am not willing to take some risk, I probably better be happy with being a hired hand and not ever having something of my own. I can't tell you how many times I have heard if I would have started 20 years ago I could have made something work. I guess it seems like an opportunity for me to get off my can and get started.
Click to expand...

OK, this will sound harsh, but there isn't any other way I can put it... The way you're framing this, you're basically just "buying" yourself a job, and at the end of it will hopefully at best be at a break even. You need to do as others have said, and supply the equipment, but charge custom rates to do all the operations. Or, you make an agreement w/ the owner that you will supply the equipment, but he's going to pay X amount of $$$'s per hour for the equipment use. And then whatever number you come up w/ as X, add about 50% to it b/c that will most likely be it's true cost once you figure in depreciation, repairs and fuel. Also, don't forget to price in your labor on all of that.

It sounds bad, but well funded operations will chew guys up and spit them out on a pretty routine basis... And there will always be somebody next in line b/c it's such a great deal. Remember, they didn't get where they are by making deals that are favorable to anybody but them.
 
pknoeber said:
flyingS said:
Here is my take on it. If I can furnish the equipment, it allows me to build some assets. I already own most everything that I would need. Why you ask. First off I have bought most of this equipment under value, I look at all of it as liquid assets, the rest I have accumulated over time. I need a share of it to operate on my small scale basis. The other side of that is that I don't plan on working for someone else for the rest of my life. If I provide the equipment and can get paid for it, I will be building assets and eventually should be putting cash in my pocket. I can intern use the return to invest in land or cattle or whatever makes sense at the time. If I am going to bust my butt to make someone else money I may as well make a little myself. If I were in the owners shoes the value is in not paying for maintance and repair. We all know that if it comes out of your own pocket you take better care of it, generally speaking. The advantage for my family is that when the time comes and we can step out on our own we will be set up and ready and will not have to buy all the equipment at once. Maybe I am crazy, but I have found that if I am not willing to take some risk, I probably better be happy with being a hired hand and not ever having something of my own. I can't tell you how many times I have heard if I would have started 20 years ago I could have made something work. I guess it seems like an opportunity for me to get off my can and get started.
Click to expand...

OK, this will sound harsh, but there isn't any other way I can put it... The way you're framing this, you're basically just "buying" yourself a job, and at the end of it will hopefully at best be at a break even. You need to do as others have said, and supply the equipment, but charge custom rates to do all the operations. Or, you make an agreement w/ the owner that you will supply the equipment, but he's going to pay X amount of $$$'s per hour for the equipment use. And then whatever number you come up w/ as X, add about 50% to it b/c that will most likely be it's true cost once you figure in depreciation, repairs and fuel. Also, don't forget to price in your labor on all of that.

It sounds bad, but well funded operations will chew guys up and spit them out on a pretty routine basis... And there will always be somebody next in line b/c it's such a great deal. Remember, they didn't get where they are by making deals that are favorable to anybody but them.
Click to expand...



:clap: :clap:
 
:agree: bin there done that, all you end up with is a bunch of old iron that takes every nickle it makes to keep it running. iron rusts and depreciates. land generally appreciates. cow's at least will replace themselve's.

can't urge you strong enough to stay out of something like this
 
katrina said:
After the frickin mess we just got out of....."Run Forrest Run!!!" Don't do it!!! You will take the biggest sqrewin of your life.... Even if it's family!!
Click to expand...

Katrina's thoughts here make the most sense. FWIW.

There are plenty of times it's cheaper to hire the work done than doing the work yourself with equipment you own.
 
I may be lost, but is this equipment that you already own, and are looking to utilize it more fully, or looking to buy to be a partner?
 
You can't make any money doing custom work. You might generate a baler payment if you were short of cash but that is a short term deal. I think you are cruising for a disappointment if you take on his work with your equipment. Let him buy the equipment and pay you to operate the ranch if you want but don't furnish the machinery. You'll wind up with a bunch of worn out iron and no money to replace it with. Make a deal with the owner to let you run a few cows on the ranch and next year a few more etc. That way you really would accumulate something.
 

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