Struggling with price structure

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imported_shine

New member
I have been getting ready to do this detailing obsession thing "officially" part time. I am having a little difficulty settling on how I want to do my pricing. From day 1, I was set on a 100% strictly hourly rate; getting paid exactly my payrate x hours worked. I would be giving a "maximum cost estimate" that I would charge the customer at most. End cost would be determined by the exact time worked. The customer would know my hourly rate--would this not be such a good idea?



Recently, I've read others that have done it a bit differently: Giving a solid $ amount up front to the client, according to their expectations and how long you think you will have possession of the vehicle, keeping in mind how much time will be consumed working on the vehicle. While knowing about how much you want to make per hour, charge a bit above that, or have a range, so I would not feel like I'm slowly getting ripped off if I spend a few more hours on the project than first expected.



The goal of option #2 isn't to take as much dough from clients as I can, but to have a solid price that I will know I will be getting paid, period. Also, I wouldn't have to be so critical of the exact time I'm spending on each car. I would just keep in mind that, for example, "I need to have this car done by tomorrow at noon." If I go strictly with an hourly rate I can see myself under a bit more pressure to get things done in a timely matter, yet not rush things to ensure the client is getting only the best for their money. I always do things in as quick as I can while being thorough, but ya know what I mean?



I've probably thought about this too much. Looking forward to what other pros have to say about the 2 options.
 
I simply charge an hourly rate like you are considering. I try to give a rough estimate of time required but tell them it could be more or less.



I've been thinking about adding a few things via 'a la cart' such as glass polishing and some stuff that is asked for every now and then but not frequently enough to pitch.



The one thing I'm struggling with right now is whether or not to come up with some basic 'packages' that meet the time restrictions I put on them for the sake of telling folks: "Well for 3 hours you get x,y and z".. since some folks like to see a list of things that get done.



Hourly is simply the easiest way to do it, no doubt. Often times I think I'm trying to MAKE things more complicated when I try and lay down a rough pricing system.
 
Both scenerio's have their pro's and con's and based on who you talk to here you'll get a whole slew of answers. The best answer is do what works best for you. I'm a set rate type of guy regardless of how long it takes. The plus to this is I know exactly what income I expect and I can budget that accordingly. My customers also know exactly how much they can expect to pay before I start the work. The con to this obviously is if it takes me to long to get the job done correctly I end up hosing myself. I can accept this. I'd much rather hose myself than ever hose over my customer. I can't phathom telling a customer I work for $50/hr and the detail takes me 12 hours to complete. I guess to some handing a customer a bill for $600 is perfectly fine. If I did that to any of my customers I'd probably get sued. Of course that's just my area. Checking the nets of other details shops around the country it really varies in price to your location. It seems to me that the trend however is mobil guys charge by the hour and set location more often than not have set prices. Hopefully that helps a little.
 
The problem with senario two is that is leaves you open for things like "how about you do this, or that..." which you may or may not due but cannot charge for.



If its by the hour, then the client understands that any you do they are being charged for...
 
In my past life I was an HVAC contractor and after a few years in business, I change all my rates to flat-rate. I started out charging hourly, (plus parts), but it turned out to be a not-so-good system for a few reasons.

Example: Let's assume that it took me an hour to change a part. Now, what if I sent an employee to do it but it took him 2 hours, simply because I was the better technician. Is it fair to the customer to charge him more because someone less competent (or simply slower) is doing the job?

Example: an airplane ticket. Suppose you buy a ticket to fly to Osh Kosh and as you're deplaning in Osh Kosh an airline rep stops you and demands you pay an additional $75.00 for the flight because they ran into a headwind which slowed the plane down some and the flight took longer than usual? Sounds fair to you, the customer? No.

Example: I'd charge an hourly rate and after a while working on the roof, I'd come down to drink some cool water and take a small break from the Florida sun beating on me on the roof. More than once a customer would come out and say, "I'm paying you to drink water? I hope you deduct this time!" or, "I'm paying you to look in your truck for a part?" Bad feelings all around.

Customers don't like the hourly charge because it's too uncertain for them, plus they'd be paying more if you're not too competent or if you're a slow worker.

Hourly charge is bad for you too.

Example: Say, to make it easy to figure, you charge $50.00 per hour. You work an 8 hour day. 8x50 = $400.00, right? Wrong. First of all, and only if you're good, the average hours charged in an 8 hour work day is 6 hours. You're now down to a $300 daily max. Subtract time for traveling, eating, sitting down for a minute, on the phone, talking to clients, selling a job, buying supplies, etc., your daily potential max $$ shrinks even lower.

But, let's say you DO manage to charge 6 hours daily, every day. You're limiting your gross income to that theoretical 6 hr x 50.00 = 300.00.

I took my cue from the auto mechanics who repaired and maintained my work trucks. Example: They'd change a distributor on my truck and charge me 4 hours labor. "But it only took you 2 hours!", I'd say. "Yeah, but THE BOOK says 4 hours for that charge, so I gotta charge you 4 hours," was the answer I got.

Hard to argue with THE BOOK. Plus, they'd look in THE BOOK before quoting me a price and show me the price and the hours in THE BOOK. That's how much it's gonna cost you.

So, I made my own BOOK. Of course, you need experience before making your own BOOK. Experience in how long a certain job SHOULD take, and how long that job MIGHT take with an employee doing it instead of you. Factor in your experience in how often and how much longer it takes if something goes wrong, and put that in THE BOOK, for example, 2.5 hours. If it takes you an hour, you showed the price of 2.5 hours before the job and customer agreed.

Now that's better for me, the business, because I'm making more money on the same work and not worried about rushing, etc. I changed from an hourly rate to THE BOOK for a while.

BUT (always a BUT), how did I as a customer feel when the auto mechanic charged me 4 hours (because it's in THE BOOK) but only worked 2 hours, even though I agreed to the price beforehand? Ripped off, because of the hours in THE BOOK as opposed to how long it actually took. Not good to have your customer feeling like he's been ripped off.

So I came up with a different book. A flat-rate book. No mention of hours or hourly rate in this book.

Example: Replace a contactor = $125.00. Replace a fan motor = $325.00. You'll still need experience before you come up with the flat rates, again what could go wrong, how often does it go wrong, how long would that particular job take if I did vs if one of my techs did it, how much do supplies cost for that particular job, break even point, fixed costs, variable costs etc.

I still would charge the 4-5 hour rate (plus parts) for a job that might take me 2 hours, but no mention of time.

Immediate acceptance by customers. Not only acceptance, but they liked it!

The customers felt better because they know the entire price for the job before agreeing, and I felt better because I priced my flat-rate even more than the previously exampled 4 hour rate.

It's a win/win situation. Customers like it and my company made more money, plus I'm not limiting my gross by how many working hours charged in a day. Win/win.

This took longer to explain than I planned, hope it makes sense and hope it answered your question.
 
I offer packages, but they are essentially offered at prices that are estimates as to how long it will take to complete the detail, based on my experience (so, they are based off of an hourly rate). These packages are priced on my website on a "starting at" basis, with the caveat that the price will go up as the vehicle gets larger, and/or the condition worsens.



I always give the customer an estimate, in writing before beginning work. I have a work authorization with the date, vehicle info, outline of work that will be performed, and the estimated detail cost. I have the customer sign this prior to work beginning. This covers both me, as well as them. If I quote them $300 in writing, and they sign it, they have no reason to act surprised at the price after the completion of the detail. It also protects them by giving them peace of mind that I am not going to arbitrarily charge them something absurd once the work is done.



If the customer starts asking for extra items, that are not listed in the package deal, I tell the customer that the package price quoted to them was based off of $XX per hour, and if they would like me to add the service they are requesting, it will take me an hour longer (or whatever), so I will have to add that amount to the original quoted price.
 
To me, the payment is a token. I don't detail for a living, but have every weekend booked solid for months. I think its just the fact that I don't do it for a living that it has worked out like this.



I don't like add-ons, or up-charging. I'll strictly use a flat rate and set customer expectations up front. Leatherique, Wet Sanding, 5 step polish, Swissvax Mystery, whatever it may be. If I end up with just one car every month, it will be a finished product to be proud of and still remain enjoyable.



I have about 10 new customers over the next few weeks to service and I am changing my detail plan to meet this new direction. Previous customers will be grandfathered in. I will no longer push to finish in one day, most cars and customers need more. I want to deliver a special product that makes people proud to own their vehicles. A lot of us here are capable and know what they could do with the luxury of time. I have found that 99% of my customers are car lovers and truly value and know what perfection is. I hate watching the clock, I detail because I love it, I work Monday through Friday for money.
 
Thanks for the replies guys, I appreciate it. I'm getting a pretty decent idea of how long each of my detail packages are going to take. Multi-step corrections are a big variable though. However, I have kept track of how many hours it takes me to go around a vehicle per polishing step. But, it will differ between every vehicle. I guess that's where I got the idea of #2.
 
I sold packages when I was concerned with acceptence from new cleints and was establishing myself. Now, as I have grown over the last 4+ years as a corporation and 6+years before that as a hobby, I am making the switch to hourly. Shortly my site will be updated and that will give you some ideas if you aren't in a rush to do this today. Over the years, I have continued to learn more and perfect my skills, and as a result, I can honestly say to customers that I don't compete with car washes. The hardest part of the switch comes down to the rejection that new customers who don't know you may say... I have gotten a comment the other day from a guy who said how he can get a detail for $100 from the car wash around the block. About 15 mins later I found out that the car I was detailing for a co-worker there was done at that $100 detail shop. The car showed no signs of anything that had been done except for a vac, minor wheel cleaning, and oh yea... ALOT OF WAX RESIDUE!!! Do yourself a favor and position yourself as a premier car care agent. Simply justify your hourly rate with the use of the best products, and quality work. Let's face it, what customers would work for you for cheap? We all have to make a living and if your doing a great service at a fair price you will do just fine. Best of luck!!!
 
I hear ya MCWD. My target market isn't to compete with the local detail shops that offer "full details" for $200 or less. I want to target car enthusiasts that care about having things done the right way and can tell the difference between a 2 hour and 20 hour job. I have my website nearly complete and tried my best to describe the difference in my services versus most of the other high volume shops.
 
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