The Handyman's Guide to Profit by A. William Benitez

Author:A. William Benitez
Language: eng
Format: epub
Publisher: Mikael Publishing
Published: 2022-02-14T00:00:00+00:00

Buying and Maintaining Your Tools

The next item to consider is the cost of your tools. You either already have or must acquire a fair collection of home repair tools for this business. I covered the list completely in Chapter Three and you may already have most of the tools needed. Whether you already have or must buy all or part of the tools, an investment has been made and must be considered as part of your costs. In addition, they must be maintained in good working order. Over the years they may require replacement either because they break down or in order to get newer, more efficient models.

All of these costs must be considered if you expect to profit as a handyman. The process of equipment aging and requiring replacement is called depreciation. You must establish a depreciation schedule for all your tools and deposit funds into an account in order to pay for new equipment when an older piece of equipment requires replacement.

In addition to funding the replacement of the tools, you depreciate tools for income tax purposes so you can deduct these costs from your gross income thereby reducing your taxes. Even after a tool has been depreciated completely for income tax purposes, the depreciation schedule should continue to ensure that funds are deposited to be available for the eventual replacement of tools.

The easiest way to do this involves establishing an annual depreciation figure based on the total cost of your tools and the years you expect them to last. For these calculations, let's assume that the total value of your tools works out to about $4,800.00 and they are depreciated over a five year period at $960.00 per year. To calculate this you would divide $960.00 by 12 for a total of $80.00 a month for the replacement and maintenance of tools. Then divide the $80.00 by the 160-hour figure we established earlier and that would require $.50 per hour added to the hourly figure.

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