How To Maximize Your Machinery Budget

It can be difficult to plan your annual budget for anything. It can be difficult to make the most of your machinery budget. It can be very difficult to factor in the costs of newer machines. There are still ways to stretch your budget even if you’re buying expensive or large machinery.

How do you calculate the Total Cost of Ownership for Machinery?

Two main factors determine the total cost of ownership: operating costs and fixed expenses.

Operating costs

Machine operating costs are the actual cost of running the machine. This includes all costs associated with running the machine and any other expenses. This includes labor, electrical, consumables and maintenance. Repairs and maintenance may also be included in the fixed cost category. You can calculate labor, consumables and maintenance by the hour, day, or month. It will also depend on how frequently your machinery is used, and for what purpose. An machine that is used every day will have a higher operating cost because parts wear faster and it will require more energy. The labor also will be more expensive.

Fixed costs

Fixed costs of machines refer to the cost that you will pay regardless of how often the machine is used. These costs are also known as overhead costs, such as loan payments or lease payments. Don’t forget to include the floor space that each machine takes up in your plant.

Price of Purchase

While machinery can be a valuable asset to your plant and make you thousands of dollars per day, they can be costly in the beginning. It doesn’t matter if you purchased them directly, leased them for a rental payment or traded in older machines to get the newer model. However, the capital cost of buying the machines is still capital. The interest cost of the machine should not exceed the amount you borrowed to purchase it.


This happens to all types of machines. The machine’s value will decrease with regular use and wear. It doesn’t take much for a machine (or the controls) to age with technology advancements.

Taxes and insurance

Machines occupy space, so you have to pay for their storage, insurance, and taxes.

Maintenance and repairs

These types of expenses are essential for most companies. Machines may need to be repaired or replaced. Regular maintenance is essential. These costs will increase as machines age and are used more frequently.

How to Maximize a Limited Machinery Budget

Regular maintenance is essential to keep your machines running smoothly. Do not wait for them to stop working or cause damage. You can save money on future repairs and replacements by maintaining regular upkeep. It also allows you to plan downtime between manufacturing deadlines. You should also consider leasing equipment when buying machinery. This can help you save capital for more important things. You should also consider unloading older equipment when purchasing new or upgraded equipment. You can sell any machines that are no longer in use. Sell your old equipment to lower the cost of your next piece of equipment and make more space in your shop.

Partner with SFMS to Maximize Your Machinery Budget

Financing is a great way to obtain the equipment that you want. Southern Fabricating Machinery Sales can assist you in financing your next purchase, new or used. We offer a variety of financing options to help you purchase your equipment. In some cases, we can even return your working capital (cash)! We can even return working capital (cash) to you for any other requirements, such as internal plant improvement. Southern Fabricating Machinery Sales can offer you high quality used and new machinery, along with financing options that will allow you to get the equipment you need and the financing you need to achieve your long-term goals.

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