You bought a truck. Do you know if it is making you money?

Quick story. A company in North Carolina bought a used grapple truck to speed up removals. Good logic. But the truck broke down constantly. Repairs, downtime, crews standing around. Was it worth it? Crunch the numbers…the used truck had cost more in lost production than a new one would have cost outright.

They sold it, bought a new one, and the new truck paid for itself within the year because it actually ran every day.

Most equipment purchases in this industry follow the same pattern: the owner sees a need, writes a check, and hopes the math works out. No utilization tracking. No cost-per-hour calculation. No breakeven analysis. No idea what the machine actually costs per hour to run.

How many pieces of equipment in your yard right now can you prove are earning more than they cost?

Before we get into the one number that tells you whether your equipment is earning you cash or burning it, we need to talk about something shifting in everyone’s market.

The $3,500 jobs are finding someone else.

AI search traffic grew 527% last year. The homeowners using it are not the emergency callers. They are the planners. The $3,500 oak removal. The annual trimming contract.

These people research before they call. And right now, AI is pulling answers from Angi and Yelp instead of your website.

We built a fix. Takes about 3 hours.

Now, back to it.

One number decides whether that machine earns or burns: Utilization Rate.

Utilization rate is simple. The hours the equipment actually ran on a job divided by the hours it was available to run.

If a chipper is available 40 hours a week and runs 26 of those hours, that is 65% utilization. Industry guidance says equipment running above 65% utilization is a strong candidate for ownership. Below that, you are probably better off renting.

Why 65%? Because below that threshold, the cost per hour of owning (payments, insurance, maintenance, storage) starts to exceed what you would pay to rent the same machine only when you need it.

Do you know the utilization rate on your three most expensive pieces of equipment? If not, you are guessing.

The cost-per-hour formula.

Take everything you spend on a piece of equipment in a year: loan or lease payment, insurance, maintenance, fuel, storage. Divide by the number of hours it actually worked on a job site.

If you spent $38,000 on a bucket truck last year (all in) and it logged 1,200 hours on jobs, your cost per hour is about $32. If it only logged 600 hours because it sat half the time, that jumps to $63. Same truck. Same payment. Double the cost per productive hour.

That second number might be higher than renting a bucket truck at $300 to $400 a day.

Buy, lease, or rent. The decision framework.

Runs 5+ hours a day, most days of the year? Buy it. You will recover the investment faster, and your per-hour cost drops every month.

Runs seasonally or a few times a week? Lease. You keep cash free and can upgrade when the lease ends.

Use it a few times a month or less? Rent. Paying $175 to $400 a day for a stump grinder you use six times a month is cheaper than owning one that sits in the yard the other 24 days.

One more thing. A $45,000 chipper purchase in the 25% tax bracket qualifies for a Section 179 deduction worth roughly $11,250 in the first year. That changes the math on buying versus leasing. At the bare minimum, talk to your accountant before any major purchase, not after.

The equipment trap in this industry is real. Owners buy iron because it feels like progress. New truck in the yard. New chipper on the trailer. Feels like growth.

But some of the most profitable tree services I have seen run lean fleets. They own what runs every day and rent what they need occasionally. Every piece of iron has to justify its spot in the yard with a number, or it goes.

Meanwhile, there are $3M companies with more trucks than $8M companies. One yard is full of payments. The other is full of production.

Which one is yours?

Equipment is one side of the equation. The other side is making sure those trucks are rolling to the right jobs, from the right customers, at the right price.

If you have the crew and the equipment, but the phone isn’t ringing with the work you want, reply and tell me what your ideal job looks like. I will tell you if we have seen companies like yours solve that problem and how.

Until next week, keep your equipment maintained and your job scope clean.
See you next Saturday.

-Jacob
The Backcut