Shop Labor

[Red Door]

What do you charge for shop labor per hour?

[Mojo]

I do not have a charge for shop labor. The products I sell are dictated by my large competitors. I price my awning products close to their prices and because they are large corporations looking for huge profits they set the prices high. By streamlining and making changes in how I make each one I have been able to get my margins up to a level that provides a decent profit. The addition of a twin needle machine really boosted my margins.

Crunching the numbers my hourly rate would equal out to be between $ 80 - $ 135 per hour. This is labor only. Materials, shop supplies and shop costs are on top of that. If I am slow from screwing off then my hourly rate obviously drops. If I am on the mark and blowing through orders then I am at the top of the scale. My average would probably be somewhere around $ 110.

When I was sill doing solar screens and other odd jobs I think I was billing at around $ 60 per hour.
When I first started working in this business I was billing at around $ 20 per hour and that was all my work was worth at that time. :)

Chris

[Mike]

In marine work. I  harge $75. Pricig a nob i estimate the hours. Omplete on it. Plus materials.
Now it i get a old guy call me sho is on a fixed budget. Il lowered it to 60 on  occation

[Rich]

Just to clarify, since this topic has come up before and I think some posters thought one way and others another way. When I hear "shop labor rate" I think the amount that is directly charged per hour for any particular job. In other words, if the actual job takes 3 hours and two of these can be done in a day, then 6 hours of shop labor are collected even though the owner (one man shop) may spend 8 hours working in the shop. The other 2 hours are administrative time and are NOT charged directly to the customer.
Is this what you mean?
Thanks,
Rich

[baileyuph]

What to charge?  This question, a good one comes up and will continue.  I worked in several shops, dealership for example where their determination of cost to perform a function is generally like this:  They reference their time manuals to get the statistical hour for a function.  For example how much time to allow to replace a starter on a such and such. 

The statistical hour is the amount of time a professional should be able to do the job.

Then the cost of having employees plus shop overhead and profit needed per hour to keep the doors open is the hourly rate.  The product of those two is generally how the cost is figured and one can easily see that the picture looks better when the shop manual time can be beat and not as good when the time to perform a given job runs over. 

Well you say, there is no time manual available, there in lies the problem.  What is the answer?

Don't know but the answer lies in the management function of the business. 

The good ones have a challenge if they stay in business and make their living solely from the business.  If it is a hobby or sideline, different ball game.

Agree?

Doyle

[Rich]

The statistical hour is the amount of time a professional should be able to do the job.

I may be wrong, but if your talking about the time shown in the flat rate manuals, isn't that the time an average professional  mechanic should take to do the job, but not the very best time? I always thought that these times were not hard to beat by someone who became more experienced and learned the time saving tricks and that fact created the opportunity for them to make a better wage than the "average" mechanic.
Is that the statistical time you're talking about?
Rich

[baileyuph]

A shop rate is statistically derived at some level of probability of happening.  That level is statistically the sigma about the mean number.  

The sigma of any manual is your question and the manual development description is where that answer is.  

In the real world the manual values were not a piece of cake, easy to make.  There are too many variables to any job for that to be true.  We have heard it here............some jobs take 50% longer and you just don't why or things just didn't click that easy.  

Every mechanic in a large shop where I worked did not exceed the standard all the time, a few did part not the time but not all the time.  

I think you would agree that is about the same story with our small business.  Some times things go faster for a variety of reasons.

But, this subject, the hourly rate, get more technical in most cases, for example what is the competitive rate?  Consumers given a chance can be driven by price.  

Nothing is simple or easy, if so, everyone would be doing it.

My question is in shops represented here, are their hourly rates covering the work or everything associated with the work?  

Well, that brings us back to full circle because everything most of us do (unless specialized) will deliver the same profit simply due to competition local or abroad.  

Bottom line is I think all of us can agree that we put more hours into our business than our "shop rate" covers.  We wear so many hats!!!!!!!!!!

In thinking, how many here get their hourly rate when out selling/picking up/delivering/making presentations/ communicating by whatever means/ and other duties like book keeping.  I think most understand what I mean.

Doyle

[Mike]

if the actual job takes 3 hours and two of these can be done in a day, then 6 hours of shop labor are collected even though the owner (one man shop) may spend 8 hours working in the shop.

I took it the same 3 hour to do a job charge 3 hrs   latly im not at work 8 hours I am good for about 6 hours

[Rich]

[quoteBottom line is I think all of us can agree that we put more hours into our business than our "shop rate" covers.  We wear so many hats!!!!!!!!!!

In thinking, how many here get their hourly rate when out selling/picking up/delivering/making presentations/ communicating by whatever means/ and other duties like book keeping.  I think most understand what I mean.
][/quote]

I'm probably sounding nit-picky, but because this has come up before and I suspected then that some were seeing labor rate as the amount per hour for EVERY hour they worked, I wanted to get clarification.
I've said before that I try to get $100.00 minimum on everything I do. That means I charge the customer for a 3 hour job at least $300.00, more if the transaction warrants it. I usually put in about 9 hours per day, but I can't make $900.00 per day b/c my actual productive labor time is about half of my "at work" hours. $450.00 would be more like it for that scenario.
My shop labor rate of $100.00/hour better cover all the other hours that net me $0.00, or I can't stay in business. It has to cover all of the other times.
Again, sorry to sound like I'm belaboring  the point (pardon the pun), maybe everyone reading this gets it and I'm off base, but that's my input.
Rich

[Mike]

Rich i dont figure my time on a cal giving a price   But ii estimate the time to do the job as 1 day8 hours to pattern a job. That may take me untill lunch time to do. The rest of the day to me im shot as im always to hot and sweaty now and need rest   One day ot three to make it and one day to install. Even againit usualy isnt 8 hours even if its a bridge enclosure with driving time.
So i do well

I gueese ive learned to do it wuick and easy as i can. Thoose time standards ive alway thought were way to long in reality. But maybe they are the same. Done at noon all day then timewise.
Were one would rather spend time doing other jobs. Now after 20 years id rather call it a day early.

[baileyuph]

When I worked for GM, the time manuals were not generous to the garages.  Not way too long like Mike implied for canvas work.  The reason, GM developed the rates and understandable they were not padded because those time standards were used to pay the dealerships.

If the time allowance said some number, example 2 hours, if it took twice that or even more, the shop only got paid for 2 hours of work.  No, they were tough to meet, not generous.

In my upholstery business, my shop rate varies considerably, My estimates that is because there are some procedures (work) that your competition won't let you get a good price.  My best pay for my time is the more difficult work, that my competition will not or cannot do. 

Rich, does this give you an idea of how I charge and what shop rate is.  I do not get paid for cleaning, book keeping, and stuff like that because my competition usually will get the job if I even tried. 

In this perspective, most who know me will understand why I continually seek faster ways to do things and new approaches to accomplish that, a tool that can save me a few minutes is usually worth the investment because my workload is ......well never caught up status. 

If I can have a $500 day of actual labor charges, I work my rear off and make good money.  I love my work, love the challenge of always trying to get better, faster, and develop the expertise of doing the new requirements.  Air bags in auto for example, had to school myself basically on doing them, now some cars have around 10 air bags in them and if you are going to work on new cars, you have to get smart on airbags.  Not a trivial task now that we have cars selling in our country from all over the world.  There are differences that have to be respected when working on products from other countries (Germany as an example), otherwise if you trigger one of those bags while working on the car, ....................well you just blew your shop rate!

Any who, I am thankful that all through this great recession, I haven't hurt for business and I understand why, but do not complain about working hard.  Do not take me wrong, If I was fitting canvas down the Florida in that heat, the hours would have to be reduced.

Doyle

[kodydog]

Red Door, as you can see shop labor prices are all over the place. A lot has to do with your location, what type work you do, how much advertising you do, how long you've been in business, etc.

If your the only upholsterer in a good size town and have a 3 month backlog you can charge much more than the guy in the next city over who just opened his doors.

A lot also has to do with the demographics of your town. Are you in a historical location with a lot of antique furniture owned by wealthy retired customers who love to restore to original condition? $$$. Or do you live in rural poor America where most of your customers are on limited income and live in sub standard dwellings. What one-person charges in Batesville, Arkansas will be much different than one would charge in West Palm Beach, Florida. And as much as I love to see Rich and Doyle tackle the philosophical aspects of the question it is a difficult one to answer.

Now to turn this thread completely upside down, what is the average hourly wage of an upholsterer working for someone else?

[baileyuph]

Kody you said it right!

Average wage, according to government tax returns is some where 18 an hour.

Now, before blasting me too low or too high, if you understand statistics, any number has a degree of variance.  But, for most geographical areas, few would expect a well seasoned furniture upholster to work for less than $17 or $18 an hour.  East coast, higher because of demographics that support antiques and older high quality furniture restoration.  I have hear some on commission can go a good bit above the average number.

What I mean by statistical averages is how reliable is the number.  Well, by stating the numbers above the government is posting a statistical average that would be correct over 50% of the time.  Got that?

Doyle

[Rich]

One thing I will say about factors that affect labor rates is people's attitudes. Of course, I can't say for sure it's the same people, but I see in my area how people will spend on restaurants, landscaping, cars, car repairs, houses, home repairs, clothes etc, but balk at prices for reupholstery. It seems to me that many people have a perception of upholstery work as undeserving of much expense. They will spend, and quite often I might add, at restaurants, but they have come to expect the costs and have accepted them. Upholstery is something most people are not familiar with since the need for it is infrequent. When they do come in (and I believe everyone, whether they'll admit it or not has a price in mind beforehand, and it's usually below reality) they are shocked. Some, had someone recover a chair for them a few years ago (it was actually 1986, but who remembers dates) and it was not nearly as much as I just quoted them, so I look like a rip-off. So, they'll shop around and find a friend's cousin's aunt who does it out of her basement and pay what they think is reasonable. I can't deal with that on a regular basis, so I stay away from the work that I know generally pays me less and stick with what works.
Attitudes are not ours to change, but to work with.
Rich

[baileyuph]

Rich you summarized much of the shop's issues involved in furniture.  Add in the Asian factor, for example here comes there stuff made by workers paid peanuts plus cheaper quality the market is warped more in terms of consumer values regarding furniture. 

In the states, we can't compete with all that, no sense denying it.  Only a small percent of that market is hardly worth your time.  However, don't forget the repair part of the industry, they can pay better.

What is your core business?  Dental chairs?

Doyle