25.06.2015 Doing Business When The Market is Falling
02/07/2015 16:37:43

Doing Business When The Market is Falling

25.06.2015 In the times of building market falling, the same as in the times of its raising, some companies leave and some are born and take places of those who gone, and in this way they intensify competition within the limited space of the "market leftovers". How does it possible in such a hard time correctly calculate and organize the business of diamond cutting and drilling, grinding and polishing of concrete floors? Almost all contractors before making a decision to buy equipment hope to receive an income. The market of diamond tools and equipment offers different price ranges, different product quality and variety of delivery terms and further cooperation.

Traditionally, everyone wants to get the lowest price from the supplier, the longest delay of payments and "Lifelong" unconditional warranty and also 24hours/365days of technical support. Specific focus of the buyer on those conditions is often are used by equipment suppliers who have a task to sell equipment any way and "then we’ll figure out all the whats and hows". In these cases, soon after the purchase and right after promised "golden mountains" comes black everyday questioning of the supplier.

The costs of equipment maintenance, his unpredictable performance and workability, promised lifetime and quality of consumables continue to change and nullify all the theoretical calculations of business.

In order to prevent that before organization of any business it is good to try to project it one year ahead. Identify initial and future costs, calculate the estimated revenues and profits. Simple EXEL table on the basis of plan-fact allows to calculate the business, choose the right equipment supplier and to make the right decisions for the operational management of the business. Buying anything for the business (equipment or tools) you want to avoid unjustified costs and make a profit instead of working for the benefit of the supplier.

Assume you are planning to start work on the market of diamond core drilling and wall saw concrete cutting. When choosing a wall saw table data based on the experience of our suppliers over the last 5 years can help you. Compare those numbers with the equipment data of the other manufacturers and make your choice.

The table recorded figures for TYROLYT HYDROSTRESS Wall Saw.

That set contractor bought in February 2010, being used, with a running time of 980 motohours.

The Cost of Hydraulic Wall Saw PPH25***DZ-2S  is 350 000 UAH

Expenses
  per 1 year per 5 years

Average market price, UAH per 1 sq.m. cut          

1300

 

The average number of cut sq.m.

500

2500

Gross income, UAH

650000

3250000

Expenses in UAH

 

 

Equipment amortization*

70 000

350000

Equipment repair and service

20 000

100000

Diamond tool

200 000

1000000

Employees salary (2 operators per set)

100 000

500000

Advertising and orders search

20 000

100000

Administrative expenses

30 000

150000

Expenses, UAH per 1 sq.m. cut

880

 

Total expenses per year on 500 sq.m. cut, UAH

440 000

2200000

Your annual income, UAH

210 000

1050000




* Planned amortization period of the wall saw - 5 years



For a business start all the opportunities need to be analyzed and the right decision should be made. 

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