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If you own and operate your own auto detailing or mobile auto detailing business chances are you do not know what it costs to operate your business on a daily basis. You are providing a service which is very labor intense; you actually need to know what your hourly operating cost is. Once you know what it takes to operate your detailing business per hour you will be able to price your detailing jobs better and provide more accurate estimates for over sized vehicles.
Knowing what your hourly break-even cost is will enable you to determine what you want your profit margin to be per job. Detail King has prepared a simple but effective cost/profit model that will enable just about any auto detailing business owner determine what their hourly break-even costs are. You need to know if you are making or losing money on each job especially the super-sized vehicles like super stretch limousines, boats, big rigs, box trucks, etc.
Your expenses can be broken down by what’s known as fixed costs and variable costs.
Fixed costs are costs that you have to pay every month and usually are the same “fixed” amount every month. Some examples could be rent on your building or your truck or van payment. Other examples of fixed costs could be a monthly loan payment for your start-up costs or your insurance premium for your business or company owned vehicle.
Variable costs are expenses that usually will fluctuate every month. Some typical variable costs would be utilities, auto detailing supplies, office supplies, advertising, marketing, fuel costs, labor, educational expenses, equipment maintenance and repairs, uniforms, trash pick-up, gray water disposal fees, and travel expense. The list will vary depending on the size of the business and the goals of its leader.
The formula to quickly compute your hourly operating cost is really quite easy. If you use an accounting software package like quick books for small businesses then you can easily total both fixed and variable costs. If you do not have use of accounting software you can still figure your over-head out easily.
First, list all of your monthly fixed cost for a typical month and total them up. Next, list all your variable costs and take a 4 month average of those expenses. The 4 months to include for your tabulation should include 2 of your busiest months, 1 slow month and 1 medium busy month. Add all of the 4 month totals together and then divide by 4, this will give you your average monthly variable cost total.
Now add both totals together. Let’s say your fixed costs to operate your business every month total $2150 and your average monthly variable costs total $1075. Your total monthly overhead is $3225.
Now take the amount of days you work per month, let’s say 26 days per month. Divide $3225 by 26 and your average per day cost is: $124.03. Now take the average amount of hours you work per day, let’s say its 8 hours – then divide $124.03 by 8. Your hourly break-even cost is $15.50.
Now you need to determine what your hourly rate should be. Deciding what you actually want to make per hour will help you develop what you should charge for your standard detailing services and how much to estimate for over-sized vehicles. You should at least triple the value of your hourly break-even cost. So if your hourly break-even is $15.50 your “hourly service rate” would be $46.50. So you will me “making” $31.00 per hour! That beats flipping burgers for $7.75 per hour doesn’t it?
When developing a service menu and listing your services and their price ranges the prices should be based on the amount of time you think it will take you for each service times your hourly rate. So let’s say you provide a wash, clay, buff and wax service for regular size vehicles and you determine that it should take you about 2.5 – 3.0 hours. Your advertised price range for that vehicle would be $116.50. For rounding purposes you could advertise that service at $109.00 – $129.00 depending on condition of the vehicle (and or size). You would use this same formula for determining what to charge for all of your services.
If you get a phone call whereas the customer is asking “how much to detail my RV” after you get all of the particulars including the length, color, surface type, etc. you would then determine how many hours this will take you. Let’s say it is 8 hours, and you know your hourly rate is $46.50 then you would quote your customer $372. For rounding and price range purposes; your quoted over the phone price range may be $375-$425. You cannot firm that up until you actually see the vehicle. But now you know how to price these over-sized vehicles while being fair with the customer and making $31 per hour or at least a $248 profit for a day’s work. Not bad!
Keep in mind if you have to bring along a helper your hourly rate goes up so you must factor his or her hourly wage plus at least 25% for employee taxes. But you should also be able to get the job done quicker; so you can be more productive and get more detail jobs completed per day.
It is critical to understand that if your overhead is too high and you use the formula for your cost and profit model stated earlier you may price yourself out of the market. Keep your over-head manageable. A good example would be if just starting out as a mobile auto detailer and you need to buy a mobile rig, don’t purchase a Cadillac Escalade as your mobile rig, your monthly bank note payment will be outrageous! A better decision would be to consider purchasing a reliable pre owned work van for $2500 versus paying $50,000 for a pre- owned expensive luxury SUV.
If you work smart, and work hard, you will be able to buy a Caddy Escalade someday as your personal vehicle or whatever motivates you. Keep your over-head down, do great work and keep taking your business to the next level and you will Thrive!
Be sure you are collecting your customer’s email addresses when you are creating the auto detailing work-order or invoice. You will want to follow up with your customer the very next day, not only for thanking them for the opportunity to detail their vehicle but also to provide them the opportunity to give you some critical feedback. We at Detail King prefer to make a follow-up phone call the day after the customer’s detailing appointment. You may not always be able to get a hold of your customer via a phone call, and they may not be as candid over the phone as they would be by completing a short email feedback survey.
The email feedback survey should first thank them for their business and then ask them to complete a short survey about the services your auto detailing business performed the previous day. The survey should also ask for feedback of the overall experience they had doing business with you. If you are confident that your auto detailing business exceeded your customer’s expectations then you may want to ask for referrals and reward them for each new customer that they send to you.
Shown below is a template that you may want to consider using once you have had a chance to personalize it and even make some changes that better suits your detailing business. You can also customize this by editing it and changing some of the words and sentences if you need to email it to a commercial account with a fleet of vehicles that you are trying to procure after the initial appointment. The next auto detailing business tip will discuss how to get an online testimonial from your customer and will include a template for your consideration.
Dear (customer’s first name),
I would like to thank you for choosing (your business name) to provide our professional auto detailing services for your (make and model). We really appreciate the opportunity! So we can better serve you next time could you please complete the short survey below?
Please rate the following, just type your rating next to each statement: (3- Strongly Agree 2– Somewhat Agree ~ 1 – Do Not Agree)
• The amount of time it took to complete the auto detailing service was reasonable- ( )
• The auto detailing service provided met my expectations – ( )
• The “attention to detail” met my expectations – ( )
• The individual that provided the auto detailing service was courteous and knowledgeable – ( )
• I plan to use (your business name) again in the future for my vehicle’s auto detailing needs – ( )
• I will refer my friends and relatives to use (your business name) in the future – ( )
Comments or suggestions:
Thank you very much for taking the time to complete this survey!
If you know of anyone else that you think may also appreciate having (your business name) provide our professional auto detailing services I would appreciate you tell them about us.
For each customer that you refer to (your business name) and chooses any of our full service auto detailing services, we will provide you with a complimentary hand car wash! Be sure you advise the person that you are referring to us to mention your name so we can reward you for the referral.
(your business name)
(your phone number)
(your web site)
(your Facebook fan page)
The Mytee Lite ii carpet extractor got a totally new face lift for 2014. The Mytee 8070 as it is officially known is one of our best-selling portable carpet cleaning machines! Mytee beefed up the performance along with user convenience and safety. If you have been looking for a heated carpet extractor and upholstery cleaning machine that can do the job of a full-size carpet extractor but want a compact design the new Mytee Lite is for you.
The new Mytee 8070 carpet extractor is perfect for the mobile car detailer or small detail shop operation. It is light weight, easy to move around and stow yet a very powerful carpet cleaner unit. This is one of Mytee’s best-selling upholstery machines and the first in the industry to include an on-board heater for maximum cleaning power. At a water capacity of three gallons, it’s perfect for both spotting and smaller car interior cleaning jobs. Typically it takes about 3 gallons to clean the upholstery, carpet and mats of an average size car. So the Mytee 8070 is perfect if you are cleaning a couple interiors per day.
If your detailing operation calls for units that hold more water capacity Detail King also offers a more Mytee units. The Mytee HP100, Mytee HP60 and the Mytee Deluxe Prep Center have larger solution and recovery tanks if you clean several car interiors per day or focus on RV’s, buses, SUV’s and conversion vans. The Mytee Lite ii also can act as a great back up for on eof the larger capacity Mytee extractors in a situation where you could use a second unit. Detail King can also provide Mytee carpet extractor accessories, repair parts and all the car interior extractor chemicals and cleaners that you would need including maintenance products.