in a bit of a rut...

T

tssdetailing

New member
Last year, particularly spring through fall, I was epic busy. I worked so much my wife had to help me so we could knock out more cars per diem. But it seems that every dollar I earned, was spent, either on business or for home/general bills/baby and this year I will be reporting a negative if the CPA checks off what I'm putting down. I'm seriously pissed that I worked that hard and don't have anything to show for it.



I feel like I already charge a premium for services but I have decided I need to do 1 of 2 things...or both. A blanket increase (ie 5-10% raise) on all my listed service prices OR charge milage (something I've never done). A friend of mine is very in tune with how financial structures should work and gave me a nice equation for how to figure out an actual price per mile (it's something to the air of 77¢). Do you think this will be a turn off for customers?
 
What is the typical number of miles you travel to get to jobs? If the bulk of your jobs are within 10-15 miles maybe only charge those customers who fall outside of that radius. I wouldn't think that would be too unreasonable to ask.
 
Are you writing off mileage as it is on your taxes? Im sure your cpa has asked you about how many miles you have traveled. If you have long trips, dont be afraid to start charging mileage (if you have established customers you can possibly waive this fee for them.)
 
If you're that busy during the good season you'd be best served by hiring. Trained employees should bring in roughly three times what you're paying them.



or



Double your prices, lose half your customers and enjoy the free time. :)



I wouldn't charge mileage unless you go outside of a set area. From a customers stand point it is best to roll-up all charges into the service cost instead of having multiple line item charges.
 
C. Charles Hahn said:
What is the typical number of miles you travel to get to jobs? If the bulk of your jobs are within 10-15 miles maybe only charge those customers who fall outside of that radius. I wouldn't think that would be too unreasonable to ask.
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I live rather south of the Cincinnati metropolis. The breakdown of my last years traveling is such:



Average number of miles traveled is 45.5

10% of Gigs were 1-19 miles (round trip) Avg'd $205 and made for 11% of income.

50% Of gigs were 20-69 miles (round trip) Avg'd $175 gigs and made for 43% of income.

27% of Gigs were over 70 miles (round trip)Avg'd $197 gigs, and made for 27% of income.





smoknfastlegend said:
Are you writing off mileage as it is on your taxes? Im sure your cpa has asked you about how many miles you have traveled. If you have long trips, dont be afraid to start charging mileage (if you have established customers you can possibly waive this fee for them.)
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Yes, of course, I have a long list of write offs. But even if it's a write off doesn't mean that I didn't spend money on it. I do have some maintenance clients who are a bit of a trip, but they are GOOD and consistent customers.





MichaelM said:
If you're that busy during the good season you'd be best served by hiring. Trained employees should bring in roughly three times what you're paying them.



or



Double your prices, lose half your customers and enjoy the free time. :)



I wouldn't charge mileage unless you go outside of a set area. From a customers stand point it is best to roll-up all charges into the service cost instead of having multiple line item charges.
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I tried to hire 3 times last year-each time the guy didn't show up on his first day. Shame on me for using Craigslist, I guess?



And I am certainly with you, I don't like to be blindsided by misc fees–so I wouldn't want to do that to my customers. BUT this is business and if I'm not in it for myself, then I'm going to be stuck in mediocrity for ever and not turning a profit.
 
If someone is going to pay your average of $200ish, what's another $10-15 for travel. If they're pleased with the work, $10 shouldn't be the straw to break the camels back.



Even better is if you can market it so that you're not making money off travel, you're only recouping your own costs.
 
I tried to hire 3 times last year-each time the guy didn't show up on his first day. Shame on me for using Craigslist, I guess?
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I have three employees right now. Last year I went through 10 others and probably interviewed a half dozen more. Turnover sucks but it is a way of life in this business. You have to invest in them with time and training and hold on to the good ones. It's tough but don't get discouraged.
 
C. Charles Hahn said:
What is the typical number of miles you travel to get to jobs? If the bulk of your jobs are within 10-15 miles maybe only charge those customers who fall outside of that radius. I wouldn't think that would be too unreasonable to ask.
Click to expand...



This is exactly what I do. I'm not making money off the travel charges it's money to cover my gas. Within 15 mile i do not charge. 16- 30 miles I charge $10 and outside of that it's $20. Also depends on the job. If I'm going to a customer who has 2 or more cars that I'm doing all in the same day I will usually wave the travel charge.
 
Deep Gloss Auto Salon said:
Something seems out of whack if your mileage is putting you in the red.
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How so?



I'm loosing money by not recouping a cost; if I were to have charged 75¢/mile for every gig I did last year I would have an extra $7500.
 
tssdetailing said:
How so?



I'm loosing money by not recouping a cost; if I were to have charged 75¢/mile for every gig I did last year I would have an extra $7500.
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I would think that while mileage is a variable cost, it is not (or shouldn't be) a variable that can put you in the red. Especially taking in consideration that when you are spending the $ on that variable cost you are doing so to make $. Now if you were going to meets and only doing promoting, not doing any transactions that would be different story.



You said all your money went to various areas and house/general bills were some of them. That's not a loss....



With all due respect, it seems you simply want to increase your profit which is a great thing to do. If your mileage to detail is truly what is putting you in the red that must mean you are doing a whole lot of driving to get to each job outside of what should be your "standard" area of coverage. If that is the case you should charge accordingly for mileage that goes outside of your "standard coverage area".



Otherwise, find value added up sells (opti coat, 1z klima, etct) to boost your per job margins.





Jason
 
Deep Gloss Auto Salon said:
If your mileage to detail is truly what is putting you in the red that must mean you are doing a whole lot of driving to get to each job outside of what should be your "standard" area of coverage. If that is the case you should charge accordingly for mileage that goes outside of your "standard coverage area".
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I would agree with you here Jason, but in looking at the numbers he posted, his "standard coverage area" isn't very close to home, and the market close to home doesn't have anywhere near enough volume to support his business.



That being the case, as much as I hate to say it I'd almost be tempted to look at moving closer to the market where the jobs are. With the housing market favoring buyers right now it might not be far fetched to pick up a house elsewhere and rent out where he's living now as a way to reduce expenses overall.
 
C. Charles Hahn said:
I would agree with you here Jason, but in looking at the numbers he posted, his "standard coverage area" isn't very close to home, and the market close to home doesn't have anywhere near enough volume to support his business.
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Didnt see that post....



But this part of my post still applies





If your mileage to detail is truly what is putting you in the red that must mean you are doing a whole lot of driving to get to each job outside of what should be your "standard" area of coverage. If that is the case you should charge accordingly for mileage that goes outside of your "standard coverage area".
Click to expand...





I would def start charging mileage. Establish an area that you will travel on your dime and anything that exceeds that is on the clients dime. The standard mileage rate was just decreased to .51 per mile.





Jason
 
Deep Gloss Auto Salon said:
I would think that while mileage is a variable cost, it is not (or shouldn't be) a variable that can put you in the red. Especially taking in consideration that when you are spending the $ on that variable cost you are doing so to make $. Now if you were going to meets and only doing promoting, not doing any transactions that would be different story.



You said all your money went to various areas and house/general bills were some of them. That's not a loss....







With all due respect, it seems you simply want to increase your profit which is a great thing to do. If your mileage to detail is truly what is putting you in the red that must mean you are doing a whole lot of driving to get to each job outside of what should be your "standard" area of coverage. If that is the case you should charge accordingly for mileage that goes outside of your "standard coverage area".



Otherwise, find value added up sells (opti coat, 1z klima, etct) to boost your per job margins.





Jason
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It's obviously not the mileage alone putting him in the red, it's just one factor. Every single expense has to be looked at to see if there is a way to reduce or recover the cost.



Keep looking at every expense and figure out where there are opportunities for cost savings. Add on services can also add a lot to the bottom line...what else could you offer that you don't already? Oh, and employees can be a major pain but they will get you to the next level.
 
I had to start charging for mileage as well but for a different reason. My guess is that its not the fuel thats putting you in the red, its the un-billable driving time. I would almost guarantee with amount of time you are spending driving according to your list, you could double what it costs you in fuel and you'd still be in the red. How much are you charging per hour? My guess is that your hourly rate is too low. Just something to think about.
 
I do charge a trip charge if the price is under a set amount. If someone just wants a basic detail on one vehicle, I'll charge a trip charge if it is more than a 50 mile round trip. But if they have two vehicles set up for a detail, since they save me driving from one location to another between vehicles, no trip charge.
 
Mileage charges are a bad idea, IMHO. Customer's don't like being nickeled and dimed. It's like buying a brand new car, the car $19,995, then A/C fees on top, then delivery fees, then paperwor fees, etc. Even if the car still winds up being, say, $21,000, it irritates people to be nickel and dimed. Customers like seeing a price, and having that as "the price", not "oh yeah, I gotta add this, and that, and this".



Therefore, I'm going to go contrary to what everyone else here is suggesting, and I say do a blanket price increase of 5% for all your services. Then in 6 months, if need be, go up another 5%. I wouldn't do 10%, because that's too much at one time, incremental is the way to go.



That said, I do fully agree with figuring out what your "business circle" is, how far you're willing to drive for your everyday work, say 20 miles, 30 miles, whatever, one way. If a job takes you outside of that circle, then charge a flat additional fee, not mileage. Say an extra $20 for anything outside your business circle. Keep it simple, keep it straight forward.
 
tssdetailing said:
Last year, particularly spring through fall, I was epic busy. I worked so much my wife had to help me so we could knock out more cars per diem. But it seems that every dollar I earned, was spent, either on business or for home/general bills/baby and this year I will be reporting a negative if the CPA checks off what I'm putting down. I'm seriously pissed that I worked that hard and don't have anything to show for it.



I feel like I already charge a premium for services but I have decided I need to do 1 of 2 things...or both. A blanket increase (ie 5-10% raise) on all my listed service prices OR charge milage (something I've never done). A friend of mine is very in tune with how financial structures should work and gave me a nice equation for how to figure out an actual price per mile (it's something to the air of 77¢). Do you think this will be a turn off for customers?
Click to expand...



I wouldn't do it - include it in the price. I remember having a guy that was an electrician come and wire up something for me once and the guy charged me on top of what he charged for the repair and I didn't like it. Same with the big drug store chain here charges you if you want bags when you buy something there now - pisses me off every time I go in there. I would just include it in the price.
 
You guys have been very helpful. I think i'm going to do the 5% blanket increase and then a destination charge for jobs over a certain distance away.



WIW hit the nail on the head when they said the drive time is unbillable which was making me sick. Figure a 5 hour gig @ 175 is $35/hour. And if it's a 60 mile round trip, that's 1.5 hours i'm not billing for. So nearly $50 could be made just for arriving.
 
tssdetailing said:
You guys have been very helpful. I think i'm going to do the 5% blanket increase and then a destination charge for jobs over a certain distance away.



WIW hit the nail on the head when they said the drive time is unbillable which was making me sick. Figure a 5 hour gig @ 175 is $35/hour. And if it's a 60 mile round trip, that's 1.5 hours i'm not billing for. So nearly $50 could be made just for arriving.
Click to expand...



When I had my employees, we offered free pick up and delivery within 5 miles of our shop. We stopped when I figured out with 3 FT employees, it was costing me $3k a month in unbillable driving time that I was paying my employees for. :(
 
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