Pricing For Your Services

[GothamAuto]

I was just speaking with another professional auto detailer this morning and I remember an exercise I had to do for another company I used to work for in the service business as well that helped justify charging what we did for the service we offered.
What my manager at the time had us to was list out EVER business expense we could think of that goes into running the business. So for auto detailing, there is the obvious equipment and products, but what else is there? Here is a short list of some of the things I came up with.
- Uniforms (matching embroidered hats and shirts, with pants that don`t have rips and stains all over them
- Marketing (running ads in newspapers, fliers, business cards, lettering for your truck if you are mobile or signs for your shop if you are fixed)
- Phone and internet service for your office (not to mention a phone and computer to use along with them)
- TIME!!! ( this is important if you are self employed or a business owner. How much time do you spend on the business besides detailing. Making phone calls, driving to and from jobs if you are mobile, writing up thank you cards for your customers, restocking you supplies after you are done for the day, maintenance and repair of your equipment).
- Training (if you have received professional training, whatever you paid for it has to go into your costs as well)
Of course this is a very short list of what it costs to run a business and what should go into your pricing. Please feel free to add!

[Jngrbrdman]

That is all rolled into the 30% I take out for "overhead". For everydetail I take 30% out for operating and restocking expenses and put that in a seperate account. It makes taxes easier to sort out at the end of the year.

Some of those things aren`t really regular operating expenses though. For example, I spent fifty or sixty bucks on `uniforms` that me and my crew use, but that was pretty much a one time expense that was paid for pretty quick. Reoccuring expenses is what you should figure on for real overhead calculations.

[Troy@Protekt]

I spent fifty or sixty bucks on `uniforms` that me and my crew use...

You have a crew now?

BTW, It should be "... my crew and I ..."

[Jngrbrdman]

Back when I was getting my English degree so I could be a detailer I swore that I would never make that mistake.

Just a few guys I trust on the really big jobs. I`ve got three dependable detailers ready to do battle when they get the call. They cheerfully donate to the overhead fund since it is my product and my customers they are detailing for. It is a small step toward becoming more legitimate as a detailing outfit in the valley. A one man band showing up is nice, but when two uniformed individuals appear and work in sync with each other and produce excellent results, it actually generates more referals.

[GothamAuto]

Well, yeah, you are correct that some of those expenses are not recurring expenses, but they are all still factors that do have to be taken into consideration.
The whole idea of this post wasn`t really to list all the expenses that you have as a business, but just to get an idea of why getting $150 for a detail does not break down to you getting $50 an hour in your pocket. All those other expenses have to be considered as well when you are pricing your services.
I posted this because sometimes people have a hard time justifying in their own head charging more then the next guy, so this is a good process to run through whenever maybe some of the newer detailers feel that way.

[Stephan]

Back when I was getting my English degree so I could be a detailer I swore that I would never make that mistake.

That was good.

[Jngrbrdman]

Here is a good example...

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Take a look at what that shop offers and then look at what they charge. They would have to have serious volumes to support the overhead of that place. The prices are competitive with what I charge, but I have nowhere near the overhead.