What is a reasonable rate?

This was gone over last winter in GREAT detail. At that time you guys were a lot lower and I was telling you to raise your prices!

Now some of you are leaning heavily on stupidity ! Where may I ask did you come up with the hourly wage crap! That's dumb, and any customer that buys your BS will eventually come back to haunt you BIG TIME, news spreads!!

This is NOT an hour type job! When a customer comes to you for service, you need to annalize the situation/vehicle and give the person a firm price (you're selling your reputation)! This way, they know up front what they owe and are getting, and agree/disagree right then and there, no fuss/no muss! If you are unable to do this then you don't know what you are doing!!

Try to confuse him with your brilliance or dazzle him with your bull **** will give you a pissed off customer that will spread the word like you would NEVER believe.



But, do what you like, it's your business.

Changeling
 
This is so irritating I just plain had to come back and kick you some more, I hope it sinks in!!!!!!!!



Example: You run into someone and do some dammage, no one has insurance (yes really), so you go to the local fix it guy and he says $50.00 per hour, and it looks like a 2 hour job. You say OK, fix it please!

You come back to pick it up, right, and he says that will be $1000,00 !

Now you know that can't happen right, really, just keep on dreaming! IT HAPPENS, what do you think that guy has to say about that shop forever after?

Changeling
 
I keep it between $40-$60 per hour.



Figure if it takes me 30 minutes to wash a car and I charge them $35 then I just made $70 an hour.:D



Typically on a wash, clay, seal and interior cleaning I'll charge $150 if not bad, and it'll typically take me about 2 1/2-3 hours total, so I make between $50-$60 per hour.



Full Swirl Removal might take about 10 hours, and I'll charge about $450-$550 so I'm still right around $45-$55 per hour



If they tip me well it's even better.:chuckle:



I know some on this forum that charge $75 per hour and not charge by the process like me, they tend to make much much more too but that means you have to have clients that have that kind of money.



Josh
 
you base your estimate off an hourly wage you would like to hit, so by judging a cars condition and realizing what it might take to clean it up properly, you are giving him and estimate of say 100-150 dollars...now sometimes I say its $40 per hour for interior cleaning because you never know how long it will take to get stains out...you cant sit there for 8 hours and collect 100 because you didnt realize the extent of the damage done to the interior, so I say per hour pricing fits just fine in some cases. So for your basic packages like interior +wax, or wash and wax, yeah, go with a set price. But for multistep polishing and full interior cleanings, I say run with an hourly rate, with a close estimate, and hold true to the top end of the estimate, and not go over it!



I gave someone an estimate of 12-16 hours on a car, ended up being 17 hours (it was a car I was told to do my best, money didnt matter), but I only charged 16 hours because that was the highest I said it would be. had it been less time, I would have charged accordingly!
 
Changeling said:
This is so irritating I just plain had to come back and kick you some more, I hope it sinks in!!!!!!!!



Example: You run into someone and do some dammage, no one has insurance (yes really), so you go to the local fix it guy and he says $50.00 per hour, and it looks like a 2 hour job. You say OK, fix it please!

You come back to pick it up, right, and he says that will be $1000,00 !

Now you know that can't happen right, really, just keep on dreaming! IT HAPPENS, what do you think that guy has to say about that shop forever after?

Changeling
Click to expand...



What are you talking about? I can figure out pretty quickly what a job will take me to do (within about 30 minutes or so), so I base my estimate on that but let the customer know that if I run into anything unexpected, the price will rise but I will consult with them first. I don't discuss it with the customer in what I am making an hour, I just give them a price for the work I am going to do.
 
As usual, Scott is right on the money. The hourly rate that you come up with is simply a guideline for you as a detailing business owner to know and not something that is discussed with the customer. Knowing ahead of time how much you think you need to make per hour gives you a better idea of how to price the job in the first place. The fact that it is based on how much you actually need to make per hour in order to cover business expenses and make a reasonable profit is something the customer does not need to know about. All the customer needs to know is how much the total job going to cost. That's it. Nothing else.
 
If you are just doing a polish/seal wax job then a price of the total job is what the customer cares about. The hourly rate is up to you and to be kept private from the customer. Jobs like this can be estimated easy.





Now, if you are doing a full correction via rotary and have to spend anywhere from 8-15 hours then you have to explain to the customer on how much it will be and maybe even put a cap on the total max amount charged, so the customer will not pay over that. When doing these correction type of jobs it is very hard to tell if it will be 8 hours or even 15. This will also help to determine if the customer is willing to do 100% or 90-95% on their budget if any. This is what I have been doing lately and it is helping me judge my customer better and also to make sure I do not work 8 hours for free. A couple of hours for free is ok, but anything more than that to make their car absolute perfect is not worth it anymore to me.



But then again, your rate also determines on what you can do, how good you really are, and if it is done by PC or you are a rotary pro. If a person is using a pc to do correction, then charging $60 per hour is crazy. If you are doing rotary and know how to achieve a 100% perfect swirl free jaw dropping gloss then $60 an hour and up can be accounted for if the car is worth it and the customer is willing to pay for it.



I know the top correction rotary pro's here know what I am talking about
 
You posted this about what a shop should charge if they want to stay in business:



AppliedColors said:
To establish a permanent detailing business, you'll need to keep this rule of thumb in mind:



Take in a minimum of $75 hourly for a mobile business.

Take in a minimum of $100 hourly for a fixed shop.



Working from home, you could adjust that rule to $60 hourly, but any home based detail shop will eventually encounter licensing, zoning, and neighbor issues, so don't count on your home being a permanent location.



Certainly you'll find that your competition will charge less than $75 - $100 an hour, but their presence (like most detail shops) is temporary. Call them in 12 months and most of the numbers will be dead.



Call any shop that's been in business more than 5 years, and you'll find that they bring in $75 - $100 an hour. It sounds high, but when all overhead costs are considered, it's the only way to stay in business year after year.
Click to expand...



And then you posted this about a job you did in the Click & Brags:



AppliedColors said:
Price: $135 to clean the cabin only (no exterior detailing, no cleaning the cargo area)

Hours: 2 detailers working for 3 hours (6 man hours)
Click to expand...





This means you're charging/earning ~$22.50 per man hour? Looks like you contradicted yourself in a BIG way?
 
David Fermani said:
This means you're charging/earning ~$22.50 per man hour? Looks like you contradicted yourself in a BIG way?
Click to expand...



To be fair, he did mention he grossly (apt word considering that van!) underestimated how long it would take.
 
On average I make ~$45/hr sometimes more sometimes less depending on who I'm working for. I have a referral program for repeat customers who send business my way and I also have a friends and family discount deal. Works out well for me but I am however in no form a full time detailer but I do however carry insurance.
 
David Fermani said:
You posted this about what a shop should charge if they want to stay in business:







And then you posted this about a job you did in the Click & Brags:









This means you're charging/earning ~$22.50 per man hour? Looks like you contradicted yourself in a BIG way?
Click to expand...



We blew it on this job. Actually, I blew it on this job because I estimated it. I'm not afraid to post my mistakes here.



Had we finished in 3 hours, it would have been a below average take, but still profitable.



We did hit $100/hr for the day though:



Interior detail RAV4 - $179

Exterior detail + touchup chips and scratches black IS300 - $250

Full detail FX35 - $199

Interior detail plumber's van - $139

Total take: $767

Open 8 working hours, including set up and break down.



Thus, $767/8 hrs = $96 an hour. At this rate of revenue, I can afford experienced and detail oriented employees, top quality supplies, and still make a living...while I work on other projects in the office.



The plumber's van is an example of underestimating work that has to be made up elsewhere. The IS300 had road rash and many scratches that I was able to upsell for $65. It took 1.5 hours and we grossed $250.



Aiming for $100 an hour at my 3 person shop has kept me profitable. You may be able to do it for less with less overhead, especially if you are strictly mobile.



Whatever the figure, keep it in your mind when you estimate and schedule out a day. Don't reveal that to the customer, of course, but if you can keep a fixed target, your income is likely to be consistent.
 
Don't forget, when you're mobile, you need to figure in the cost of wear and tear on the vehicle, oil changes and all that sort of thing.
 
I see your point with aiming at $100 per hour with TOTAL SHOP VOLUME. I've never priced jobs out this way because I don't have multiple people working on each vehicle(sorta assembly line style). Totally different scenario that could be misunderstood when someone's asking what they should be charging for a 1 person operation out of their home. Again, $60+ per hour is pretty high for this application. Especially when the fixed overhead is almost zero.
 
I try to charge so I get $50/hr for work. As stated before, if its a big correction job that will take me a signifigant amount of time, or If I am doing a boat, I give an estimate but I let them know it may cost more if it takes longer. Most people understand and have no problem with that.
 
Labster said:
Don't forget, when you're mobile, you need to figure in the cost of wear and tear on the vehicle, oil changes and all that sort of thing.
Click to expand...



True but it is a nice deduction on your taxes. :)
 
Scottwax said:
What are you talking about? I can figure out pretty quickly what a job will take me to do (within about 30 minutes or so), so I base my estimate on that but let the customer know that if I run into anything unexpected, the price will rise but I will consult with them first. I don't discuss it with the customer in what I am making an hour, I just give them a price for the work I am going to do.
Click to expand...

What is he talking about, It is the simplest of math, 2nd grade I believe, I aim to make $40 an hour for general, If the job looks as if it will take 5 hours I quote $200, I do not tell them they are paying me $40 an hour, and I usually tell them it will take longer than it actually wil. One it gives me some breathing room, 2 it makes them feel they are only paying $30 an hour
 
If you've been doing this for awhile...



Calculate the last 12 months Gross Sales/Total Man Hours worked. Simple.



Example: $200,000 in sales, 3 guys worked 4800 hours.



$41.66/Hour.



Additionally, take your total EXPENSES, divided by those same man-hours. Subtract from that $41.66 = Net Income/Hour...



Interesting. And sorta depressing... :wall



Jim
 
Jimmy Buffit said:
If you've been doing this for awhile...



Calculate the last 12 months Gross Sales/Total Man Hours worked. Simple.



Example: $200,000 in sales, 3 guys worked 4800 hours.



$41.66/Hour.



Additionally, take your total EXPENSES, divided by those same man-hours. Subtract from that $41.66 = Net Income/Hour...



Interesting. And sorta depressing... :wall



Jim
Click to expand...

Yes, income before deductions always seems lucrative, until you finish the math
 
As you can see, the key is to know what you are spending (expenses) and simply subtract that from what you are making (total income). That is why your hourly rate should be based on what it takes to cover expenses and make a reasonable profit. Anything less than that and you are losing money. And when you lose money, sooner or later you go out of business. Look around, it happens all the time.
 
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