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A RocketLevel playbook for restoration owners, operations leaders and anyone who signs off on equipment, backed by decades of experience in the trade. About a 12-minute read.
Size your payroll and your drying fleet for your worst week and you spend most of the year paying for capacity that earns nothing. Size them for your quiet weeks and you turn away the work that was going to make the year. You already know this trade-off. Far fewer owners have written down where their own line sits, which is why the decision gets made at two in the morning during a freeze, by whoever is holding the phone.
The way out is a three-way split with a rule attached to each part: what you own, what you rent, and what you hand to somebody else. Capacity Planning: How to Know When You Can Say Yes works out your ceiling and names the three levers. This page is about what each lever actually costs, what has to be in writing before you pull it, and which rules follow a borrowed crew onto your job site.
A dehumidifier does not care that it is January. It costs you the same whether it is on a job or on a shelf: the capital, the depreciation, the maintenance, the warehouse square footage, the insurance, and the interest if you financed it. A salaried technician costs you the same in a quiet week too. Both are fixed cost whether or not they are working.
The number that matters is how many days a year each unit earns, and that number falls sharply as the fleet grows. Your sixth air mover runs most weeks of the year. Your sixtieth runs during freeze weeks and hurricane weeks and almost never otherwise. They are not the same asset and they should not get the same decision, which is why a fleet-average utilization number is useless. Average utilization is high enough to justify almost anything, because the units that run constantly carry the ones that never do.
Run the arithmetic on the marginal unit. The question to answer is "should we own the next one," using the days that specific next unit would have been deployed last year.
Equipment Fleet: Buy, Rent, and Get Your Money's Worth makes the right argument: own your baseline, rent your surge and your specialty. What it does not do is tell you where the baseline ends, and the two steps below do.
Step one. Work out the annual carrying cost of one unit. Purchase price divided by the number of years you will actually keep it, which is usually shorter than the accountant's schedule because restoration gear takes a beating, plus a year of maintenance, filters and parts, plus a fair share of warehouse space and insurance, plus interest if it is financed.
Step two. Divide by the daily rental rate you would otherwise pay. That gives you the break-even day count: the number of deployment days per year at which owning and renting cost the same.
Worked, on a low-grain refrigerant (LGR) dehumidifier. Purchase $2,400, kept 5 years, so $480 a year of depreciation. Maintenance, filters, warehouse share and insurance at $120 a year. Annual carrying cost $600. Rental rate $40 a day. Break-even is $600 divided by $40, which is 15 deployment days a year. Check it the other way: 15 days at $40 is $600, exactly the carrying cost, so 15 is the point where the two are equal and neither is cheaper.
Worked again, on a desiccant, where the answer surprises people. Purchase $18,000, kept 7 years, so $2,571 a year. Maintenance, storage and a share of the trailer at $900. Annual carrying cost $3,471. Rental rate $350 a day. Break-even is $3,471 divided by $350, which is 9.9 days. Check both sides: 9 days of rental is $3,150, less than the $3,471 carrying cost, so at 9 days renting wins. 10 days of rental is $3,500, more than $3,471, so at 10 days owning wins. The crossover sits between 9 and 10 days. Which means on money alone a desiccant you use ten days a year is worth owning, and that is exactly the conclusion most shops should still refuse. The next section is why.
Every figure in those two examples is a placeholder to show the arithmetic. They are not benchmarks and they are not what gear costs in your market. Put your own purchase price, your own rental rate and your own logged days in, because the answer is local.
Call U the ratio of that unit's actual deployment days last year to its break-even day count.