I am considering upgrading my primary piece of equipment for my side gig. The sales person has shot me an extremely attractive trade offer to put me into a brand new machine. The spread between trade in price and my original purchase price divided by the number of hours I have run the machine puts me at $11.42/hour for cost of operation. I had built my pricing model with an anticipated depreciation per hour of $20 so i am all of the sudden way ahead of the game. My machine will need $3500 worth of repairs (wear items) in the next two hundred hours or so. I can trade into a brand new one for $30k difference. I can put cash down and keep payments in the same range as now although I'd be starting over on the payoff schedule. I did not want to make this decision now but instead wanted to wait to the end of the cutoff in late September. However the manufacturer has forced my hand by announcing some significant changes for the 2013 model as well as a significant price increase. In doing so they also truncated the time frame to order new 2012 models and the cutoff is now July 31. I will not buy a 2013 model because of the changes and I am not interested in a used one without a warranty.
Here is my conundrum: this is a side gig. I bill out at $75/hour but have significant overhead to justify the price. The machine I have is adequate although not ideal for the work I'm doing. However, it gets the job done. A new one would be much more efficient and user friendly. The new machine would allow me to work more hours before operator fatigue starts to kick my ass and make me want to shut down. That, however, is a double edged sword. Because of the price I would be obligated to work more hours to pay for it. The one I have is less efficient but gets the job done and is cheaper. The caveat is after eight or ten hours in that machine I am f'ing beat and will be sore the next day at the cost of the next day's productivity. I can swing the payments on a new one although it will demand more from me to do it.
I have to make some kind of financial move this year or I will get beat like a rented donkey come tax time. Just not sure that this is the move I want to make.
Any thoughts or opinions?
Here is my conundrum: this is a side gig. I bill out at $75/hour but have significant overhead to justify the price. The machine I have is adequate although not ideal for the work I'm doing. However, it gets the job done. A new one would be much more efficient and user friendly. The new machine would allow me to work more hours before operator fatigue starts to kick my ass and make me want to shut down. That, however, is a double edged sword. Because of the price I would be obligated to work more hours to pay for it. The one I have is less efficient but gets the job done and is cheaper. The caveat is after eight or ten hours in that machine I am f'ing beat and will be sore the next day at the cost of the next day's productivity. I can swing the payments on a new one although it will demand more from me to do it.
I have to make some kind of financial move this year or I will get beat like a rented donkey come tax time. Just not sure that this is the move I want to make.
Any thoughts or opinions?
