By Duncan Russell,


Last weekend, I decided to have a proper play with KitMaster, the machinery costings software, which has been specifically developed for contractors.

Having spoken to Mike Rigby some while ago, I just needed to put aside some time to have a proper look at this interesting software. The starting point was I had to imagine I owned my own contracting business and ask what it was I needed to know that would help improve the profitability and sustainability of my business.

Firstly, I set about inputting all the relevant data of those machines I required to offer the following services – combining; ploughing; drilling; rolling; spraying; hedge cutting. Although this process took a good couple of hours, it proved not only to be straightforward but also informative as the software started to calculate the cost of each machine either per acre or per hour

Having established my machinery database, I was interested to see whether I was making a profit and, if so, what return I could expect. First, though, I was instructed to input an overhead cost figure to allow for all those other costs which can be easily overlooked such as office costs, labour downtime, accountancy fees etc.

On doing so the software immediately recalculated my actual machinery costs. Now for the acid test as I clicked on the handy ‘Job costings calculator’ ,which revealed a mixed bag of results:

This led to all sorts of reflections on safeguarding the business going forward:

• Spraying and combining are my two most profitable operations, but can I take on a larger acreage?

• Rolling is doing OK, but both ploughing and drilling are letting the side down. Ideally, need to increase their prices.

• Hedge cutting, although not losing money, is performing badly. Would like to up the price, but there is a lot of competition locally. Perhaps better to cut my losses?

• Is it possible for me to cut my overhead costs and/or my machinery costs?

• What about other more profitable opportunities I should be exploring?

Whilst this was only a fictional paperwork exercise, I found the software easy to use and informative. I also have no doubt that using this software to help drive decision making would enable NAAC members to look closely at their costs and charging structure to increase the profitability of their businesses.

(The figures used are for illustrative purposes only and to spark discussion.)

Combining Ploughing Drilling Rolling Spraying Hedge cutting

Cost £27.95/Ac £20.12/Ac £19.45/Ac £6.24/Ac £3.65/Ac £31.12/Hr

Price £36.00/Ac £23/Ac £22/Ac £7.50/Ac £5.20/Ac £33/Hr

Margin £8.05/Ac £2.88/Ac £2.55/Ac £1.26/Ac £1.55/Ac £1.88/Hr

%Margin 28.80% 14.31% 13.11% 20.19% 42.47% 6.04%

Total Units 3200 330 620 1200 2600 460

Gain/Loss £25,760 £950 £1,581 £1,512 £4,030 £865