What’s your daily “nut?” When you’re trying to determine a price for your auto detailing services, one of the most important elements is knowing your “nut.” That’s the break-even number from which you can decide what to charge for your services so you’re not only making a profit, but also being competitive with other professionally trained auto detailers in your neighborhood.
As you’ve already experienced, properly detailing a vehicle takes up a good chunk of time no matter how skilled you are at the task. So your price considerations should be based on how long the service takes as well as the amount of products used. And you’re going to need to get out a pencil and a notepad and begin scribbling down figures in order to come up with what it costs to run your business on an hourly basis.
Here’s the quick and easy formula to determine what the break-even hourly costs are for you to stay in operation:
- Add up all of your monthly fixed costs and get a total. Fixed costs are those expenses that normally don’t fluctuate much and must be paid every month. These include rent or mortgage payments, truck payments, your bank loan and insurance costs. Don’t forget the so-called minor expenses such as annual subscriptions, membership fees and the like.
- Add up all the variable costs you expend on a monthly basis and come up with a total. Variable costs include your car detailing tools and supplies, office supplies, fuel costs, utilities on your building, employee wages (including taxes), advertising costs, cell phone bills, credit card processing fees, and all those miscellaneous costs associated with your business.
- Take all these figures and pencil out a four-month average.
- When you arrive at that total, divide it by the Continue reading…