Shop Rate

[gkm09]

What are average shop rates per hr?

[kodydog]

That is a million dollar question.

I tend to set my goal toward a weekly income. That way if I have a bad day full of interruptions I can work overtime to make up for it. And if at the end of the week I haven't made my quota I work Saturday and sometimes Sunday to make up for it. I have a set income I'd like to make each year. I don't always make it but usually come pretty close.

To answer your question. I could tell you my shop rate here in north central Florida but that would do you no good if you are in LA California. The price comparisons are much different. 

[gene]

Fixed costs plus variable costs plus profit. Pick a time period: week, month, year. Divide the dollar total for that time period by the number of hours worked for that time period . That's your shop rate.

Now reality sets in. The market will often not allow you to charge the full shop rate and be competitive on some types of work. Low margin work can help pay for the fixed costs but you can't make a living on low margin work. This is why SCORE encourages small business owners to find a market niche where you can charge more per hour.

Hope this helps.

gene

[Mojo]

We always based our product pricing on $ 135 per hour. This included labor, lease costs, and generally all of our overhead. That formula worked well in the beginning but we had to shit can that formula once we started going against some large competitors.

Our formula now would not work for most of you guys. We now price based on yardage sewn but remember we are an awning maker, not a furniture recoverer. Our work centers around laying the fabric out, cut it, seam it and sew. There is no tear downs, patterns to make, stripes to line up, etc. To be fair to all of you, our setting is more of a production shop versus a shop such as yours that is highly specialized. Not much chnages except colors and yardage.

With our RV parts company we always shoot for a 30 % margin ( minimum ) on parts sales. We started doing service work last fall and our hourly rate is $ 85 per hour plus a $ 16 one time shop expense fee. Think that is expensive ? We are actually the lowest in Florida. Our biggest competitors are at $ 135 - 150 per hour for service work. We will be bumping our labor rates to $ 95 per hour in July and part of that is to slow down the growth of our service. We are way too busy for my liking.

I can remember when I was doing general upholstery work and I admit I sucked at charging the right amount for each job. I tried shooting for $ 135 per hour but always seemed to end up at $ 65. A lot of that was misjudging time spent for a project and I sucked at that, mainly because I lacked experience in this trade. I got better as time went on. I do not miss the stress involved in trying to price out a job back in the days. It is a wonder we survived because I was horrible at it. I am amazed at how great you guys handle pricing. I am sure you old timers can look at one sofa or chair and in minutes know exactly how many hours it takes to complete the job.

Mojo