How to properly budget for the equipment you buy

By Pavan Jheeta
Calculations being made on calculator

If you’re looking for upgrades or replacements for your workshop equipment, there’s a lot more to it than just the upfront price.

There are hidden costs that go beyond the point of sale — and the budget you set needs to include these extras.

Here’s what you need to think about before you invest:

 

Price and lifespan

Before we get into the details of budgeting for your equipment, we’ll need a couple of important numbers first:

  1. The purchase price of your equipment.
  2. The expected lifespan of your equipment.

The purchase price is an easy one: it’s what the equipment costs at the point of sale. You’ll be using this as a starting point to add to your other costs.

(If you’re buying equipment on credit, don’t forget to include any interest that’s building up!)

With the lifespan, things are little more complicated. You’ll need to think about:

  • The typical lifespan for the type of equipment
  • The typical lifespan for your particular make and model
  • How often you’ll be using it
  • And the conditions in your workplace — such as humidity, heat, and dust.

It’s not an exact science — and there’s no perfect calculation. But you can come up with an informed estimate that’ll be useful throughout the rest of your budgeting calculations.

So why is the lifespan important?

It becomes a multiplier for every other cost — so you can work out the total cost of your equipment over its full lifetime.

 

Energy costs

If you’re looking at equipment that runs on electricity, this one should be simple:

It uses a steady stream of energy according to its power rating — and you can multiply this consumption by the number of hours you expect to be using it.

With equipment that runs on other energy sources (like petrol or diesel), it’s a little more difficult to calculate. But your equipment supplier should be able to tell you how many units of fuel it uses. Once you know how much fuel it uses per hour, you can multiply this by the number of hours you’ll be using it.

But we’re not done yet:

If you’ve calculated the energy costs per day (or month, or year), you’ll need to multiply these costs by the lifespan of the equipment to get the total energy usage.

You can then multiply this total energy usage by the rate you pay for energy — and you’ll have the total energy cost over the lifetime of the equipment.

 

Training costs

This one can be easy to forget — but it’s an essential part of the costs for almost every piece of equipment.

Before you get any value out of your new equipment, you need to get your staff ready to use it. That means you need to budget for:

  • The cost of hiring a trainer
  • The labour costs for the time your teams spend in training.

If you’re replacing equipment like-for-like with the same model you’ve been using, you won’t need to worry about extra training.

But you will still need training in the future with new team members — so don’t forget to include that when you’re budgeting across the lifespan of your equipment.

You won’t be able to get around the labour costs of training your teams. But with some equipment, you can reduce the cost of hiring a trainer by using a digital training course — like our Online Training for Mobile Column Lifts.

 

Servicing and maintenance

Even the best equipment out there needs a little TLC.

And when you’re looking ahead across years of daily use, the costs of regular servicing and maintenance can start to add up.

Luckily, it’s a simple calculation to add to your budget — especially if you go with an aftersales care package, where the costs are kept simple and consistent.

Here’s how it works:

Estimate the number of service visits you’ll need per year, and multiply the cost of those by the lifespan of your equipment.

With some equipment, that number might be decided for you — like with the LOLER regulations around lifting equipment.

But with other types of equipment, you may need to estimate the number of service visits you’ll need. In most cases, your equipment supplier will be the best person to talk to — they should have a good idea of what you can expect with each particular piece of kit.

 

Need some help running the numbers?

We’ve been supplying equipment to workshops and fleets for over 40 years — which means we know a thing or two about the true costs involved.

So if you’re looking for upgrades for your vehicle workshop, we’re ready to help.

Start a chat with one of our equipment specialists — and we’ll give you the expert advice you need to understand the costs behind every piece of equipment you buy.