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Pricing
Posted by New Again
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Re: Pricing July 31, 2004 01:51AM |
Registered: 17 years ago Posts: 499 |
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Re: Pricing July 31, 2004 01:55AM |
Registered: 17 years ago Posts: 505 |
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Re: Pricing July 31, 2004 05:02AM |
Registered: 17 years ago Posts: 866 |
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Re: Pricing July 31, 2004 09:16AM |
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Re: Pricing July 31, 2004 03:03PM |
Registered: 17 years ago Posts: 499 |
<HTML>This is going to sound like a broken record but you need to estimate how many hours you need to complete the work and multiply that by your hourly rate. You should also factor in what your market will bear but it should be close to your hourly rate calculations. I charge $250 to start for that kind of a detail on Pickups, Vans and Sport Utilities and raise or lower my prices accordingly based on condition.</HTML>
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Re: Pricing July 31, 2004 03:06PM |
Registered: 17 years ago Posts: 505 |
<HTML>Scotty,
Some time ago, there was a group of detailers who had this conversation on another forum.
You were part of it, if I recall.
The general concensus was $40 per hour, USF, whatever that translates to in Canadian Peso's today, not sure.
Do you still use that guide line for labor costs, or have you adjusted for inflation, rising insurance, etc costs?
Ketch</HTML>
Do it right or don't do it all!
Some time ago, there was a group of detailers who had this conversation on another forum.
You were part of it, if I recall.
The general concensus was $40 per hour, USF, whatever that translates to in Canadian Peso's today, not sure.
Do you still use that guide line for labor costs, or have you adjusted for inflation, rising insurance, etc costs?
Ketch</HTML>
Do it right or don't do it all!
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Re: Pricing July 31, 2004 03:25PM |
Registered: 17 years ago Posts: 499 |
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Re: Pricing July 31, 2004 03:29PM |
Registered: 17 years ago Posts: 505 |
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Re: Pricing July 31, 2004 03:42PM |
Registered: 17 years ago Posts: 585 |
<HTML>We charge $65.00 per hour and up. depending on the services. We have broken down the service into Maintenance, Detailing, Restorative Detailing, Show and Competition, add on services (PDR, leather repair etc.Specialty services have a different labor rate...(odor removal, water damage, concrete deposit removal, Paint overspray, etc, and thos rates are determied by the difficulty level of the job and personal expertise.</HTML>
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Re: Pricing July 31, 2004 03:45PM |
Registered: 17 years ago Posts: 751 |
<HTML>for those interested, there is a guide called "managing dollar with sense " avaliable from the Automotive Management Institue , here is a brief description.
"Managing Dollars with Sense will give you a foundation upon which to build intelligent business decisions without having to guess what the price of your products and services should be, and without having to play ‘Follow The Leader’. It takes a look at the need for accurate and timely financial analysis, discusses critical metrics, including: Gross Profit Margin on Labor, Gross Profit on Parts, Car Count, Average Invoice, Service "
More info at [www.amionline.org].
Jim.</HTML>
"Managing Dollars with Sense will give you a foundation upon which to build intelligent business decisions without having to guess what the price of your products and services should be, and without having to play ‘Follow The Leader’. It takes a look at the need for accurate and timely financial analysis, discusses critical metrics, including: Gross Profit Margin on Labor, Gross Profit on Parts, Car Count, Average Invoice, Service "
More info at [www.amionline.org].
Jim.</HTML>
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Re: Pricing - BROKEN RECORD July 31, 2004 04:46PM |
Registered: 17 years ago Posts: 3,550 |
<HTML>As Ron stated, it sounds like a broken record, this discussion of pricing.
There is not magic to pricing, "you charge what it cost you to run your business and put a little something away for profit to buy new equipment, etc."
A few years ago detailers were asking everyone "WHAT PRICE TO CHARGE" without knowing what it cost them to run their business.
Then the subject of 'HOURLY BUSINESS/SHOP RATE" came up and some seem to have embraced it.
However, what I see happening is people picking an hourly rate "out of the sky" still not knowing what it costs to run their business.
Choosing an incorrect hourly rate for your work is a double-edge sword:
a. If you are too low you loose money or sell yourself into bankruptcy
b. If you are too high you price yourself out of the business
THEREFORE, you must know exactly what it costs you to run your business.
I am not an accountant but I know this much and pass it on to you when calculating your hourly business rate:
1. How much do you want to make a month, net before taxes?
2. Should the business not pay your health insuranc premiums? Any job
you would take would do that. Do not say you don't need it your wife
has it. What if she quits her job; gets laid off/fired; you get divorced?
The business should be paying these premiums.
3. Should the business not provide you a vacation of at least one week a
year? Any company you would work for would do this.
4. Should the business not provide for sick leave? Same as #3.
5. Should the business not provide something for a retirement? Same as
#3.
6. Then you fixed expenses each month.
7. Then your variable expenses each month (estimated based on past
history)
8. Profit - any business should make 10% profit after points 1 thru 7 are
paid.
Then you calculate the number of hours you will operate your business per month. For example, if you operate 5 days a week, 10 hours a day that is 50 hours a week and 217 hours per month.
You divide the 217 into the total expense number, points 1 thr 8 and you get your hourly rate. For example, if your total operating costs are $7,000 a month and you operate 217 hours per month that is an hourly rate of $32.25 per hour.
Keep in mind that your calculated rate is based on your having business all 217 hours that are making you money.
If, thru history you find that you are available 217 hours but only have work an average of 195 hours per month then your rate must be $35.90.
With the hourly rate you estimated the time to do the vehicle: car; boat; SUV; Motor Home; or motorcycle.
Now, if you find the market will pay more than what you estimate, by all means, charge what the market will bear, but NEVER charge less than your hourly rate.
Some think that volume makes up for this but it usually does not. For example, say a dealer promises you 10 cars a week, guaranteed but wants to pay $80 per car.
Your hourly rate is $35 and it takes you 3 hours to do the work. That is a cost of $105 per car. If you do 10 cars a week at the $80 your are loosing $250 per week.
There is nothing hard about pricing if you know your hourly rate. If you are too lazy to calculate it and try to guess an hourly rate then it is only you who suffer the consequences.
Hope this helps.
Bud Abraham
DETAIL PLUS SYSTEMS</HTML>
buda
There is not magic to pricing, "you charge what it cost you to run your business and put a little something away for profit to buy new equipment, etc."
A few years ago detailers were asking everyone "WHAT PRICE TO CHARGE" without knowing what it cost them to run their business.
Then the subject of 'HOURLY BUSINESS/SHOP RATE" came up and some seem to have embraced it.
However, what I see happening is people picking an hourly rate "out of the sky" still not knowing what it costs to run their business.
Choosing an incorrect hourly rate for your work is a double-edge sword:
a. If you are too low you loose money or sell yourself into bankruptcy
b. If you are too high you price yourself out of the business
THEREFORE, you must know exactly what it costs you to run your business.
I am not an accountant but I know this much and pass it on to you when calculating your hourly business rate:
1. How much do you want to make a month, net before taxes?
2. Should the business not pay your health insuranc premiums? Any job
you would take would do that. Do not say you don't need it your wife
has it. What if she quits her job; gets laid off/fired; you get divorced?
The business should be paying these premiums.
3. Should the business not provide you a vacation of at least one week a
year? Any company you would work for would do this.
4. Should the business not provide for sick leave? Same as #3.
5. Should the business not provide something for a retirement? Same as
#3.
6. Then you fixed expenses each month.
7. Then your variable expenses each month (estimated based on past
history)
8. Profit - any business should make 10% profit after points 1 thru 7 are
paid.
Then you calculate the number of hours you will operate your business per month. For example, if you operate 5 days a week, 10 hours a day that is 50 hours a week and 217 hours per month.
You divide the 217 into the total expense number, points 1 thr 8 and you get your hourly rate. For example, if your total operating costs are $7,000 a month and you operate 217 hours per month that is an hourly rate of $32.25 per hour.
Keep in mind that your calculated rate is based on your having business all 217 hours that are making you money.
If, thru history you find that you are available 217 hours but only have work an average of 195 hours per month then your rate must be $35.90.
With the hourly rate you estimated the time to do the vehicle: car; boat; SUV; Motor Home; or motorcycle.
Now, if you find the market will pay more than what you estimate, by all means, charge what the market will bear, but NEVER charge less than your hourly rate.
Some think that volume makes up for this but it usually does not. For example, say a dealer promises you 10 cars a week, guaranteed but wants to pay $80 per car.
Your hourly rate is $35 and it takes you 3 hours to do the work. That is a cost of $105 per car. If you do 10 cars a week at the $80 your are loosing $250 per week.
There is nothing hard about pricing if you know your hourly rate. If you are too lazy to calculate it and try to guess an hourly rate then it is only you who suffer the consequences.
Hope this helps.
Bud Abraham
DETAIL PLUS SYSTEMS</HTML>
buda
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Re: Pricing July 31, 2004 06:55PM |
<HTML>Since hourly rates have already been discussed, here's another way that could help to solve your problem.
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If a small s.u.v will take you 25% more time to complete compared to an average size car, then simply adjust your price upward by 25%.
Example: If you charge $200 for a complete detailing of an average size car and now you've got a small s.u.v that's going to take you 25% more time to complete, then you will want to charge 25% more($50) or $250 for the similar service on the small s.u.v.
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If a large s.u.v will take you 50% more time to complete compared to an average size car, then simply adjust your price upward by 50%.
Example: If you charge $200 for a complete detailing of an average size car and now you've got a large s.u.v that's going to take you 50% more time to complete, then you will want to charge 50% more($100) or $300 for the similar service on the large s.u.v.</HTML>
---------------
If a small s.u.v will take you 25% more time to complete compared to an average size car, then simply adjust your price upward by 25%.
Example: If you charge $200 for a complete detailing of an average size car and now you've got a small s.u.v that's going to take you 25% more time to complete, then you will want to charge 25% more($50) or $250 for the similar service on the small s.u.v.
----------------------
If a large s.u.v will take you 50% more time to complete compared to an average size car, then simply adjust your price upward by 50%.
Example: If you charge $200 for a complete detailing of an average size car and now you've got a large s.u.v that's going to take you 50% more time to complete, then you will want to charge 50% more($100) or $300 for the similar service on the large s.u.v.</HTML>
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Re: Pricing August 02, 2004 10:25PM |
Registered: 17 years ago Posts: 23 |
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Re: Pricing August 03, 2004 05:00AM |
Registered: 17 years ago Posts: 466 |
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Re: Pricing January 04, 2005 10:11PM |
Registered: 17 years ago Posts: 866 |
<HTML>Let me bring this old thread up to ask a question (I think I already know the answer)
How is employee pay worked into the figure?
I understand how to work them in so I at least break even but what % is industry standard to make as profit off each employee?
If my hourly rate by myself is $40 (all expenses plus a 10% profit) and I hire an employee at $10 and hour (lets assume another $5 per hour for workers comp, taxes, etc...) do I charge ($40+$15) =$55 per hour or do I charge $40 per each person on the job?
Thank you in advance,</HTML>
-----------------------------------------------------
Plays in the rain --- www.SuperiorShineDetailing.com
How is employee pay worked into the figure?
I understand how to work them in so I at least break even but what % is industry standard to make as profit off each employee?
If my hourly rate by myself is $40 (all expenses plus a 10% profit) and I hire an employee at $10 and hour (lets assume another $5 per hour for workers comp, taxes, etc...) do I charge ($40+$15) =$55 per hour or do I charge $40 per each person on the job?
Thank you in advance,</HTML>
-----------------------------------------------------
Plays in the rain --- www.SuperiorShineDetailing.com
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Re: Pricing January 04, 2005 10:58PM |
Registered: 17 years ago Posts: 3,550 |
<HTML>Joe:
The way you work your labor costs into your expenses is very simple.
Calculate first the salary you want to make from the business, plus all the benefits: health insurance premiums; vacation time; sick leave; retirement premiums.
Next, all your FIXED EXPENSES
Next, all your VARIABLE EXPENSES
Add all these up and you have the total cost to operate your business at a breakeven point.
Say that number is $10,000. and you want to make a 20% profit.
Say your total number of work hours for the month are 217. That divided into the $10,000 is an hourly rate of $46 per hour.
If you add 20% for profit on the $10,000 that is, $12,000 and this divided by 217 is an hourly rate of $55 per hour.
The difference between the $46 which is breakeven and the $55 is your profit.
Calculating your labor as part of your overall expenses allows you to make whatever profit you want and whatever the market will bare.
If the market will only bare a $50 per hour rate then you will have to be satisfied with a profit if $4.00 per hour.
Hope that helps.
Bud Abraham</HTML>
buda
The way you work your labor costs into your expenses is very simple.
Calculate first the salary you want to make from the business, plus all the benefits: health insurance premiums; vacation time; sick leave; retirement premiums.
Next, all your FIXED EXPENSES
Next, all your VARIABLE EXPENSES
Add all these up and you have the total cost to operate your business at a breakeven point.
Say that number is $10,000. and you want to make a 20% profit.
Say your total number of work hours for the month are 217. That divided into the $10,000 is an hourly rate of $46 per hour.
If you add 20% for profit on the $10,000 that is, $12,000 and this divided by 217 is an hourly rate of $55 per hour.
The difference between the $46 which is breakeven and the $55 is your profit.
Calculating your labor as part of your overall expenses allows you to make whatever profit you want and whatever the market will bare.
If the market will only bare a $50 per hour rate then you will have to be satisfied with a profit if $4.00 per hour.
Hope that helps.
Bud Abraham</HTML>
buda
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