Swingman wrote:


I agree with you ... if you want to make a living in this business,
obviously the cost of your tools need to be paid out the work.

Well, yeah... to a point. Common tools and/or equipment is part of the
investment that gets amortized over many jobs. Bill's charging full
reimbursement for a common bit that would normally be expected to be within
the arsenal of someone charging for the work at hand. If this were more of
a specialty tool, I could see charging for it.

Then again there is the practice of charging for a bottle of glue, when the
project itself will only consume less than 1% of that bottle. In this
case - a small matter since the price is low, but in principle it's not a
good pricing strategy.

This fall squarely into the area of personal opinion, but my belief is that
you build your minimum required tool inventory out of your labor charges. I
guess what I am saying is that unless the tool is something outside of the
normal expected tools for a particular task, I believe that if you are going
to charge for labor on work then you better be prepared to deliver that work
and that includes having the capability to do it - both skill and equipment.
We might be saying the same thing in different ways, but I believe Bill
would be better served to capture a small percentage of his cost for the bit
as overhead, and expect that he'll either need to pony up the rest out of
his pocket, or find more work to pay off that bit.


If I need a specific drill bit to do the work, it will most likely be
charged for accounting purposes as a direct cost to the specific job
for which it was necessary, rather than as an indirect cost, such as
supplies, and charged as overhead.

That makes sense from an accounting standpoint.


IME, you need to be careful how you handle these details ... that's
where the devil is.


Yup.

--

-Mike-