Labor hours question

[TheFixOnMain]

Howdy friends. I'm a 23 year old in Ohio that got a helluva deal on a 2.5 bay service station. I went to The Powersport Institute in Cleveland, Ohio. I was educated in metric powersports but my lack of experience in a formal shop setting has made my job learning-heavy, and i focus mostly on mowers to make a living and supplementing that with some powersport work.(I also do some buy sell trade stuff)
My biggest problem is taking a long time to do a job and not wanting to charge a customer the full 5 hours it took me to figure out a 3 hour job. What I'm really looking for is some type of labor hour book for various jobs such as belt installs and spindle rebuilds and much more. I have a book that tells the labor times for engine work, but my lack of experience has stopped me from really digging into engines. (most of my money is made from carb cleans, services, tire repairs and bad bearings.) I would like to profit more, as i feel I'm cutting myself short in labor times.
Any guidance would be helpful!

 

[StarTech]

What you are looking is called book rates. I haven't seen many of them for small engines. Maybe some the other guys have.

Here when it comes to a new job I bill what I figure it would if I knew what I was doing compared to the learning curve. The problem is every job is different due rusted parts or having to straighten out some tech's screw ups.

 

[TheFixOnMain]

I see, Thanks for your input. Ive been timing myself doing tasks and averaging them to make flat rates for stuff. I've kinda been estimating jobs against a $55 carb clean. Like if it was twice as hard as a carb clean its 110. I've also called shops in other states for input and all the answers are wildly different. A place in alaska does 100% markup and is 98 an hour for labor. I'll let this forum steep and see what everyone else has to say.

 

[Hammermechanicman]

As far as i know some manufacturers supply flat rate manuals for time paid for warranty repairs but that is about it.

 

[StarTech]

Also your shop labor rate needs to compareable other local Brick and Motar shops in your area. Overhead can be a killer at times Like my shop, I brought in $200 in repairs that actually got billed out last month but my CC bill alone was 1100.00 as I got repairs still sitting on the yard to only part of parts have arrived for and I can't bill out the repairs until they are completed. Plus with me having to work outdoors the weather lately has also caused delays.

 

[TheFixOnMain]

the shop down the road that i have a good relationship with is 50. and they love me because I work on the junk they don't want to work on. My overhead is only about 1000 a month with everything, and i still seem to struggle,but were getting by, Figured id try to suck some info from the limitless internet.
And i'll definitely look into some warranty labor books

 

[Hammermechanicman]

Don't sell yourself short. If the other shop is 50 i would probably be 50 an hour also. And don't be too quick to not bill hours. If you are lost in the weeds that is one thing but wrench time is wrench time.

 

[bertsmobile1]

Google "Scheduled Service Fees, Rates or Charts "
All mower companies put them out but they are a PIA to use as they all break down ever job into individual tasks as decimal hours
Eg:- remove bonnet = 0.05 clean engine bay = 0.15 Remove muffler - 0.1 remove carburettor = 0.085 etc etc etc.
So you have to sit down and add up all of the steps it took you to do the job then multiply it out by your hourly charge out rate.
The problem is these numbers are what it took a factory trained mechanic to do the job on a clean mower strait off the production line so you can safely double all of them for any mower over 3 years old .
This is what I did when I started as like you I knew engines inside out but the actual mowers was a different thing.
Then after a couple of years I made up my own scheduled HOURS .
The other little trick is to set service hours at less than repair hours
So for instance replacing the spindle bearings during a normal service is 10 minutes each + bearings & seals
Doing spindle bearings as a repair are charged at 30 minutes each + bearings .( because of complications )
I have a set rate for tractor style mowers of 3 hours , up to 42" decks , 3.5 hours 42" to 61" decks & 4 hrs over 61"
ZTR's get charged out at 4 hrs up to 48" and 5 hours above 48"
Complicated mowers like Walkers that can have over 50 lubrication points are 6 hours .

And these are SERVICE Rates for mowers that are running fine when they come in for a routine service
If they come in for a service because they need a repair, then the repair cost goes on to of that .
This encourages people to bring in their mowers for regular service
I have also just started sending out christmas cards with service reminders in them

The previous owner f the business used to drastically overcharge for parts and under charge for labour .
I go the other way and price match the local discount on line retailer for parts and set mine 50¢ to $ 1 lower but pad out the hours
So if the customer thinks it actually takes 6 hours to service their mowers then they do nor get upset when I take 3 weeks to do a repair and many will offer to pay extra for immediate repairs .

Now my bread & butter is overnight servicing of the commercial customers mowers for which they pay a big premium as they can not get it from any other dealer and for them , loosing a day or more costs a lot of money so they drop it off in the afternoon & pick it up in the morning .
Most have a gate key so they can drop off when I am not there & the same for pick ups .
I now do over 100 regular services for commercial customers to the point where residential work does not matter any more .
And because I service them 2 to 6 times a year, they never have any field problems apart from a broken belt or bent bade and even those are lower because I replace belts way before they are worn out .
As one customer said " an extra 1 or 2 belts a year at $ 150 each is nothing like loosing 1/2 a day at $ 500 or more then having to work on the weekend to catch up .
I used to sell repaired mowers but now I hold onto them & use them as loaners during the busy season
Right now I have 10 out on loan because I have a yard full of mowers waiting for parts to turn up and occasionally some one will buy one as a back up . They get trashed but most have big ticket items like torn seta or broken/missing bonnets that would make flipping them uneconomic in any case.

 

[StarTech]

And whatever you do don't get suckered into giving estimates up front.

An give a repair might the one I doing now. The JD 925A came in with oil leak and broken muffler. I just replace three missing engine mounting screws. Got lucky there as the last required the engine to be pulled and the holes resized. While getting ready to pull the muffler notice it needs a new deck belt. After the muffler was pulled found #1 cylinder exhaust leaking oil into the muffler. Now the head must comes off for a valve job. Up front it looked like a simple job but it is not by a long shot. At least the customer knows upfront that I know what I am doing and don't charge work not done but he also expects me to charge appropriately.

 

[Rivets]

Before you set your labor rate you should consider your expenses, as well as your expectations.
1. What are your electrical expenses for a day? Let’s say $20.00
2. What are your heating/cooling expenses for a day? Let’s say $20.00
3. What are you supply expenses for a day? Let’s say $5.00
4. What is your rent/mortgage expenses for a day? Let’s say $40.00
5. What is your insurance expenses for a day, both building and liability? Let’s say $40.00
6. What is your other expenses for a day? Lets say $10.00

This is only an example and each number is not close to real

With this example you need to bring in $125.00 each day just to break even. Five day week equals $625.00 and the two days you’re closed half cost, or another $$125.00. This means that you need to make $750.00 each week before you open the doors, and we don’t have any money for you to take home.
If you charge $50.00 an hour labor and can bill out 5 hours each day, you will bring home $1250.00 each week, bringing home $500.00 each week. Not making much are you, and my numbers are not close to expenses in most areas. This is why with most businesses you don’t start making real money until year three to five, before that you’re just keeping your head above water.

I would calculate my labor rate to just keep my head above water the first year and then recalculate at the end of the year. 5 hours a day doesn’t seem like much, but remember there will be days with only 3 hours and hopefully a few each week with six hours. Remember this is just an example. I’m not trying to burst anyones bubble, just want you to remember that most small businesses fail due to poor planning. Use this post and the others to set your goals with your eyes wide open. Also remember that most people just starting out have to work 10-12 hour days to keep their heads above water. Hope you have a better half who has your back and agrees with your ideas, because if they don’t your chances of success are reduced by 50%. Good Luck.