Pricing structure questions...

[Sonic Pilot]

When determining what to charge for a certain exterior detail service, lets say for this example a full size sedan (Chevy Impala), and the service is a wash, claybar, polishing of moderate defects and application of an LSP.

One would assume that the biggest component of your pricing structure is the number of man-hours (labor) you expect to spend on this job. Generally speaking, how many man-hours do you estimate this job to be and what is your labor rate?

Without necessarily identifying your Company, what part of the country are you located in?

[TTQ B4U]

The best insight I can give you is to absolutely track your time and materials used. Get a spreadsheet and track every single vehicle you work on. The good news is you will get faster over time not only because of YOU and your skill, but you'll pick up tips/tricks, better products and pads, etc.

I tracked the time I spent on every step for every vehicle for nearly 1 year before I ended up with the pricing I'm at now. Keep in mind there are some subjectives stats such as existing condition of the paint, etc.but it will work and generate a very clear trend for you to decide how to revise pricing.

Start with a target dollar per hour you're looking at earning. Don't skimp. Even poor people in lower income areas have iPhones and toys. They will pay for quality work and results. Stories sell as do referrals and examples.

It is important to track product usage too. It's not as much as you think but it is a cost incurred and I've also learned to really stay on-point with the amount of product used. Don't over-spray Iron-X or Wheel cleaners, etc. Find out how to use less product and also less expensive product to get the job done. I always do a test area for Iron X. I've found not all vehicles even need it. (my customer base takes care of cars). I've also found I don't need to use pricey wheel cleaners on every vehicle.

In terms of a sedan like the above mentioned, it will depend on a lot of factors many I've already mentioned and many we don't know. What's the level of correction being done? What type of buffer(s) do you have? What products are you using including LSP. Coatings take longer than sealants.

Hope I've helped give you a few more factors to roll-into it.

[sudsmobile]

What we did was set our pricing initially to be about the average of our local competition. They as we gathered data, we determined how long it took us to actually complete a certain job. After we had enough data and our technique improved and our speed improved, we adjusted our pricing upwards to hit some targets. The targets that work for us are ~$50-55/hour for one man and ~$75-80/hour for two men. It also gives us a baseline for when we show up and we're doing a job that we don't have a price for. We just tell the customer "We don't have a price for this, so we're just charging our hourly truck rate for this at $xx per hour." It usually works out really well because we can tell them it's going to probably take this much time, no more than this much. As stated before, people don't mind paying for quality work.

[Sonic Pilot]

Thank you for the insight thus far, interesting.

Sudsmobile, just curious, what is the justification for discounting the labor rate so much when more than one person is working a given job?

On another note, I do agree that what the local market is charging for a given service will be very influential on rates in general.

The one thing that seems very consistent to me so far in the Detailing business is the wide range of services as well as pricing.

I do have a number of "time-studies" for various types of vehicles and am always trying to tighten them (with regard to accuracy) as much a as possible.

I think where I struggle most is determining the appropriate hourly rate. I do constantly monitor other local service providers and try to remain competitive.

[sudsmobile]

Well, it's twofold. Or several reasons. And it's not "so much", it's a 50% increase for the second person. First, I don't think anybody can convince me that two people can show up and work on the same car at the same time and complete the job twice as fast. So, adding people is not a linear event. Adding two people doesn't mean you'll finish the job three times as fast, it's really not fair to charge the customer as if you would. Second, my son doesn't work as fast as I do. When I say ~$50-55/hour for one person, that person is me. I work fast and I do a good job. My son probably increases my productivity by 50%, so we charge 50% more. It would only make sense to charge double if you could show up and do a job twice as fast as by yourself. Otherwise, you're simply making the customer pay extra for your lack of efficiency.

Your hourly rate is what it is. It's what makes you want to get out of bed to do the work OR it's what you have to make to actually make it profitable OR it's your opportunity cost of doing the job. I'm retired. I've been retired for 20 years. My opportunity cost is $0/year what I could be making doing something else because if I didn't do this I wouldn't work. The only thing I really gave up to do this is golf every day. But I've played golf every day for 20 years and I'm only going to do this for another 4-5 years.

[Sonic Pilot]

Sudsmobile,

Thanks for clarifying that. It completely makes sense to me now.