Useful Life Vs Depreciation Of Surveillance Gear

Hi all,

After 20+ years, I am planning to quit my day job and pursue entrepreneurship with my wife as business partner before I get too old. I am struggling to find reliable information to calculate the numbers right; before investing our lifetime savings on the new project: Opening a Surveillance Equipments RENTAL Company focused on the Commercial (NOT Residential) market.

I am having trouble matching the numbers on my business plan and finding the correct relation between: USEFUL LIVES of electronic equipments -versus- DEPRECIATION RATES -vs- SUITABLE RENTAL RATES to charge my future customers.

Any help on taking a look at my numbers and signaling fatal errors on my part, would be immensely appreciated !!

For example: I am assuming (basically guessing) that the following must not be too far from truth.

A. USEFUL LIVES (meaning the electronics will start decaying in around):
- DVR/Hybrid NVr: 5 Years.
- Hard Disks: 2 Years.
- IP Cameras: 3 Years.
- Cables: 10 Years.
- Active Networking Equipments (Routers, PoE Switches): 2 Years.
- UPS Batteries: 2 Years.
- Surge Protectors: 3 Years.

B. DEPRECIATION RATES.
- DVR/Hybrid NVr: 21% per Year.
- Hard Disks: 50% / Year.
- IP Cameras: 33.3% / Year.
- Cables: 0.84% / Year.
- Active Networking Equipments (Routers, PoE Switches): 50% / Year.
- UPS Batteries: 50% / Year.
- Surge Protectors: 33.3% / Year.
- TOTAL AVERAGE: 34.06%
- Note: It means that in around 3 Years, the whole equipments is "worth" nothing.

C. SUPPLIER COSTS:
- 4 Bays NVr: $1,900
- 4x SATA 2TB Hard Disks: $450
- 4x IP Megapixel Cameras: $970
- 4x 1000FT. Cables: $450
- 2x Active Networking Equipments (Routers, PoE Switches): $250
- 1x UPS Battery 1300VA: $190
- 3x Surge Protector: $120
- TOTAL COST: $4,330

D. RENTAL PRICES to Charge the Customers:
- Profit Margin: 35% Minimum (Meaning that Selling Price is: $5,845.50)
- Basic Up-Front Installation Fee: $2,922.75 (50% of Selling Price)
- 1st. Year: $974.25 ($81.19 per Month)
- 2nd. Year: $974.25 ($81.19 per Month)
- 3rd. Year: $974.25 ($81.19 per Month)

E. Gross Profit:
- $5,845.50 minus $4,330 = $1,515.50 in 3 Years.

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