Contractors costing tool
NAAC members can work out their prices accurately
It is vital that contractors can accurately cost each operation, to carefully work out what each job is costing them and to make a profit. NAAC members have access to a costing tool to help with this.
The NAAC contractors costing tool
How do you calculate prices for your work? Are you covering all your costs? Do you know how much profit you're making? When you quote for work, are you sure you're covering everything?
Contractors often find it difficult to increase their prices due to local competition. However, the cost of machinery, inputs and labour continues to rise, whilst the need for more specialist training and technology keeps growing.
Farmers rely on contractors to provide labour, skills and machinery, but the contractor must be able to afford the on-going and escalating costs of running a business.
It is vital that contractors can accurately cost each operation, to carefully work out what each job is costing them and to make certain some margin can be made. This is the only way to ensure a sustainable business, that can offer customers a professional, reliable service, with well-maintained machines.
This is why the NAAC has partnered with financial experts, the Andersons Centre, to create a contractors calculating tool exclusively for NAAC members. This spreadsheet allows members to easily and accurately work out prices for single or multiple operations and provide customers with a quote.
For the last 18 years, many contractors (and their customers) have turned to the NAAC Contracting Prices Survey to find prices for work. Whilst this provides a good benchmark within the industry, the prices quoted are simple averages that vary across the country, with different soil type, customer size and machinery. They are not a precise costing for an individual business, and it is important that contractors provide their customers with a fair and accurate quote, that can be backed-up by facts.
What does it include?
Our contractors costing tool includes easy ways to calculate all costs involved in a particular piece of work, including:
- Fixed business overheads
- Business owner’s time
- Machine purchase prices
- Depreciation
- Repair costs
- Down time
- Target profit margin
What are the benefits of using the costing tool?
- Be fully aware of what profit (or not) each job is making
- Ensure that pricing can be explained to customers
- Pricing correctly helps to run a stable, sustainable and efficient contracting business
- Protect the future of professional agricultural contractors
How do I use the tool?
Members can download it and use it on their own computer, after entering a member only password. We estimate that initial (but straight-forward) set up of the tool will take a few hours to input data, but after the business overheads and machine prices are entered the first time, you’re ready to go with calculating all your quotes. Once you’re ready with a quote you can print or email it, and start the fact-based negotiations.
