Small Guide: How to set prices when starting a detailing business - TLC Auto Detail

[Flannigan]

Small Guide: How to set prices when starting a detailing business - TLC Auto Detail


A topic that I see come up ALL THE TIME, is concerning pricing for someone looking to start their own detailing business. I serious see it a couple times a week sometimes, so I figured I would write my opinions in a post. I’m going to break it down into a few section to try and keep it simple.

Location/Area:
The first thing you need to do when figuring out how to set your prices is research. You need to go around to all of the other detailers/ car washes in your area and find out what they are charging for your services. This will give you a good idea of that type of market you are in. There are some markets that a full correction will only net you $150 and others where you can charge over $1000 depending on the vehicle and the amount of work that is performed. Obviously the super high prices will only come with practice and once you make a name for yourself, but there are some areas in the country where it will just never happen, at least not on a regular basis. You need to take an average of the prices and figure out what you can charge to both make money, and gain new clients. Unfortunately, in these economic times, detailing is a luxury that not everyone will want to shell out the cash for. So you have to remain competitive and still provide a high level of service. Finding out what your market will bear is the first step in figuring out your prices.

Type of Services Offered:
So, once you have gathered all of your pricing information, you need to figure out what services you are going to offer. Are you going to do strictly product work where you charge less per service, but work on more vehicles? Or are you going to offer more of a high end set of services, and bank on the fact that you will get fewer vehicles to work on, but each one will pay you more? If you are doing this full time it will usually be a combination of both. A lot of times the products type work will pay the bills, and the high end stuff will just be icing on the cake. That said, there are plenty of detailers who do only full correction work, but that isn’t something that anyone starts out doing.

Products Used:
So now you have most likely figured out if you are going to offer strictly product work, or if you are going to go full high end, or a combination of the two. Now you need to figure out what products you are going to use. I think a lot of people, myself included, get caught up with the flavor of the month type products. When starting a business you really can’t afford to let that happen. You need to find a product that works for you (by that I mean is cost effective and performs the job to a satisfactory level) and stick with it. If you are doing product work, you obviously need to save some money on the products. This doesn’t mean you need to get the cheapest of the cheap, but you need to find something that works, that you can buy in bulk. For example, Meguiar’s Hyper Wash is a great product, and can be found in 5 gallon containers for about $70. At a 400:1 dilution you end up spending just $.10 per ounce for a wash. Compare that to some other products and your already saving a couple bucks per car, and still getting the job done. This is only an example, but there are products like this for every facet of detailing. They work great, but they just aren’t the most popular at the moment, so you aren’t paying an inflated premium for them. Try and find a local wholesale distributor, and you will save even more money, and on shipping.

So once you pick out all of your products you need to figure out what they are going to cost you per wash. I am in the process now of turning my weekend hobby into a full time business, so I have been doing a lot of research into pricing of products. I have made a spreadsheet and figured out what it will cost me per wash on all my products. This greatly helps in figuring out what I need to charge to not only cover my products, but also how often I am going to need to place orders. A good rule, at least on production type work, is to not spend more than 5-10% of the total cost of the job on products. So if you are only going to charge $50 for a wash, you better not be spending more than $5 on products. This obviously changes with the more high end work because sometimes you can use a wax that alone would be more than 10% of the entire job, but that is a whole other subject. Also on top of the actual chemicals used, you need to take into account the tools you will need, as well as towels, pads, applicators and brushes. Obviously the tools should last a long time so you won’t be paying for them forever, but you do need to take the initial costs into account. Also at some point you will most likely want to upgrade your equipment, so make sure you aren’t only making enough money to cover just your chemicals.

In my opinion it’s a little tougher to come up with the cost of polishes and waxes per job if you are doing corrections, but at first you just need to get the products that you know will get the job done, for a decent price. Meguiars M105 and M205 are a great place to start as are the MF products from Meguiars D300 and D301. These obviously won’t cover your bases for every vehicle, so you will need to add more products as you go. Just make sure you are taking into account that a correction job will cost you far more in products than a normal wash and wax.

Overhead:
So now you have figured out the products you are going to use and what your local market will bear. Now you need to figure out what overhead you need to worry about. Are you going to have a shop, or are you going to be 100% mobile? Each choice has its ups and downs. A shop gives you a fixed location to keep all of your supplies and store multiple cars at one time. On the other hand you have to pay rent, electricity, and many other bills to just keep the shop running day to day. This may be too much for someone just starting out. So maybe you should go mobile? You would need a vehicle. In my opinion you shouldn’t just be using your normal vehicle. Driving up to an office complex in your 96 Camry doesn’t really convey the type of professionalism that you should be after. I’m not saying you need to go out any buy a brand new work van, but you should look into a dedicated vehicle that has you branding on it, it will pay off in the long run. You also need to figure out the range that you will work in. Gas is very expensive so driving 50 miles to do one wash and wax won’t be making you any money in the long run. Figure out your service area, and stick to it for the most part.

What is your time worth to you:
So, you have figured out your services, your products, and you competition. Now you have to figure out the most important aspect of all. What is your time worth to you? Are you starting this business out of high school, or are you a professional with years of experience in another field looking for something new? Either way you need to figure out what you need to make to cover your bills and keep yourself happy enough to continue working. Obviously at first you aren’t going to be rolling in the dough, but you need to make sure you are getting paid what you feel you are worth, otherwise you may start to resent it, and not enjoy the work anymore. I personally don’t even see detailing as work right now. I enjoy it so much, and know I am getting paid well for it. It doesn’t even feel like work to me, it feels like a hobby, that I just happen to make some money doing.

The extra time:
Some people won’t think of this, but many will. Detailing the vehicle isn’t the only time that you will be spending working when you start your own business. You will be cleaning towels and pads in between details, you will be cleaning your shop, you will be paying bills and keeping very good records of everything you do as well. These are al things that can take up a lot of time, and really cut into your hourly rate. You also need to take this into account when coming up with your prices. Your $30/hour can quickly turn into $10 when you add in all the time you spend working, but not actually detailing a vehicle.

So these are the major factors, in my opinion of course, that one would need to take into account when trying to figure out their pricing when first starting a detailing business. This is by no means the best guide, but I think it points out some major points when talking about this topic. I might add a little to it along the way, but everyone please feel free to add what you think also helps in regards to this topic. Hopefully this will help a few people. Thanks for taking the time to read!

[Mike Phillips]

Very nice article Dave.

Well thought-out, written from experience and well written copy-wise. Most important is that the information will help others.

[Flannigan]

Very nice article Dave.

Well thought-out, written from experience and well written copy-wise. Most important is that the information will help others.

Thanks Mike! I see the question asked on a regualr basis and hope it will help a little!

[Ted S.]

Sticky Please??

Thanks for the Thread Dave!

[Flannigan]

Thanks Ted!

[Mike Phillips]

This is a very helpful article and this time a year a lot of people will be venturing into detailing, some for fun and some for profit.


I've added it to my article list under Business and Promotion


I use my article list everyday to get people a link to the information they're looking for and I foresee sharing this article often, probably every time I share this article which I share all the time because all too often new people try to do show car detailing when they should be doing one-steps...


A few tips on starting a part-time detailing business

[wgilles]

Very nice write up, thank you

[DLB]

Fantastic Dave. Well written, and thank you for the time involved to help others.

You and I have discussed some of this before. My market is one of the never gonna get a $1000 correction job. It is a little disappointing at times knowing what others are getting, but I do understand where my clientele is, and have a pretty good feel for what to expect here.

That's one reason I do a lot of interior work. People here seem to care a lot about that.

Another little tidbit to add/elaborate on what Dave has said here:
If your market area is mostly people who think a wash and wax is sufficient, it is going to be hard to separate yourself from everyone else. Find out what people are willing to spend a little extra on, and really perform in that area. I receive more compliments on my washes and interior jobs than anything else. While I wish it were corrections, that's just not the case. I have done several 3 steps on some vehicles and made them look spectacular, but people always comment on just how clean everything is. So that's what I work hardest to achieve, ultimate cleanliness. In fact, I have even told people that are skeptical of my services to take their car to the local $15 "Detail and Car Wash" drive-thru and then bring it to me. If they can't tell a difference after I finish, it is free. For a proper and complete wash (and usually wax) and interior detail I can usually fetch $150. But, it isn't a basic wash and vacuum job either. Know your market.

DLB

[Bunky]

Very informative Dave

[thrawn5499]

very good information thanks!