Before retiring I ran a franchise company that specialized in cleaning vehicles, truck fleets, aircraft, heavy equipment, concrete, and just about anything else anyone had dirty. I used to joke with our franchisees that we were doing God’s work, since God created dirt on day one, and ever since mankind came along and kept creating structures and vehicles, God’s dirt has been covering everything. We were putting it back on the ground where it belongs. Okay, let’s talk a little bit about what it takes to do it efficiently and how to get the gear.
Pressure washing equipment can be very expensive. Some of the units we used to use were slider units with 6 gallons per minute, 180 degree water, and pressure up to 4000 PSI. That means industrial grade equipment, and then there were the environmental laws that required environmental equipment. All of that equipment, along with a vehicle or trailer to put it in, could easily cost more than $25,000. There were also incidental pieces of equipment that were needed for various categories of work.
At different times during my career, interest rates became too high or small business loans became difficult to obtain. Our new franchisees coming into the company also had to deal with paying the franchise fee, buying the vehicle, securing cash flow until the business turned a profit, and that didn’t include equipment. One option for them was to lease the equipment; however, if you take the normal amortization tables and compare them to the cost of the lease, it doesn’t always seem like a good idea, meaning you’re paying more in interest than time.
However, there were tax advantages to leasing because you can pay off the full payment every month. That was a direct deduction, and there were other rules that helped you depreciate equipment that was on a closed lease. There were a lot of tax savings in this case, and the more equipment that was purchased, the more people had jobs creating that equipment.
One thing I would recommend to any pressure washer operator or entrepreneur running a pressure washer business would be to sharpen your pencil, talk to a tax advisor, and beware of any salesperson trying to convince you to lease the equipment instead of buy. . Sometimes it makes sense, sometimes it doesn’t, and don’t forget that the people selling you the equipment are probably also getting a commission from the leasing company.
So they will tell you whatever it takes to get you to sign the lease, but make sure you get the best advice and understand what you are getting into beforehand. Please consider all this and think about it.