I need some business accounting help

So guys as some of you might know dad and I operate our own repair shop. I love doing it and have no interest in quiting.

My question to you guys is how do I go about charging the customer. We have a hourly rate of $60 per hour. I struggle when it comes to making the bill because I don't want to screw the customer yet I don't want to short my self either.

For example the other day customer rolls in with a 2008 Chevy trailblazer suv. Power steering is noisy. Diagnose it with a bad pressure line. No problem I have done hundred's of pressure lines. Well let me tell you this was a learning experience like I've never had.

Any way book time said 3 to 4 hours to do this line. I got started on it around 9 and finished and 4. So that would be 8 hours I put in but I had a half hour lunch in there also so that cuts it to 7 And a half hours. But as you guys know running your own business you have customers that come in that also need attention plus dad pulled me off the job to help him with what he was doing. So honestly I don't know how long I truly did work on this. I'd say I have in a bit more then the 4 hours but in no way do I have the 7.5 hours.

I honestly feel like I'm shorting my self a little labor money at 4 hours, but again I don't want to rip off the customer.

Short of having a timer sitting at the vehicle that I can start and stop each time I'm not sure how I can properly bill. And this isn't the first time I've struggled with this problem.

Thank you guys for your help.

Oh by the way if you're going to do a power steering line on this vehicle, the air box and washer fluid tank come out on the passenger side. The skid plate up front comes off. 5 retaining clips come off. Driver front wheel comes off. And then a hold down bolt that holds the two lines into the rack comes off. Once that's all out then you fish the return line out the driver side wheel well then finally you can snake out the pressure line. Oh and if you're going to put the two seals in the rack ports I think the only way to do that is to pull the driver front axle shaft.


Edited by bobkyllo - 05 Jan 2020 at 6:45pm

John you're correct I was off an hour.

I didn't mind fixing out and I'd do it again if another showed up. Yes it did suck that's for sure.

I will work on anything and everything and that's mainly the train for my post here. Because I may not see another one of these all year so when I do get another I may be Rusty at it. It's a different story when a dealer only with on Ford or Chevy or what it may be and they do this day in and day out

You need to find out what the flat rate manual says, then adjust accordingly..

The way it sounds, you spent approximately between 4 & 4.5 hours on it.  The only real way would be to have a notebook and write in it when you start and stop all the way through and then you would know for sure.
Obviously you don't have that here, so just saying time spent on other stuff, lunch and what ever,  I'd say the 4 or 4.5 is workable.  Actually $60 is DARN CHEAP so no matter what you decide, it is going to be fair.  If I were on the other end and you charged me $350 for labor, I'd probably give you a $50 tip!
Let your conscience be your guide.  You have a good one, as it's bothering you right now about it.
One thing that more people are aware of andglad of is someone in your position who above all else, is honest.  Take pride in that and you'll never go wrong.

When I worked in a shop we charged flat rate manual time for every job. Some times I could complete 2 or 3 brake jobs in the time allowed in the manual. some times it took twice as long as allowed. working in a shop with others there were times when Id have help the guy in the next bay would remove and balance all the tires while I worked the brakes id get done twice as fast id do the same for him. you'd spend a lot of time trying to separate out how much time was on each job so just use flat rate time on every job. also we charged $60/ hr 20 years ago. most places are at least $120 now. you need to be getting enough money from the work to not only pay labor (the cheapest part of the job) and all overhead. that building, heat, power, and insurance aren't free.  also add shop supplies to each bill rags, lube oil, break free, parts washer fluid all cost money a small fee on every bill is the fairest way to account for it.

Business rule #1:  Always take care of the customer.....if you're going to error, error in their favor.

Oh, and if you can obviously see that someone else attempted to do the repair prior to you getting the job .  .  . You need to charge twice as much!

john(MI) wrote: Oh, and if you can obviously see that someone else attempted to do the repair prior to you getting the job .  .  . You need to charge twice as much!

John you won’t believe how many times I have heard “but I already had it apart why full price”

Was in family business over 50 years, first with Dad, then mine, and last Son-in-Law & Daughter. Lots of great advice above, take care of your customers and they will take care of you (repeat work) sometimes you have to 'eat' part or all of a job to be fair and that's a learning experience, The Auctioneer I help out now said to me one time "I don't ever want my integrity questioned" when I pointed out a bidder that lied about his bid and wanted it cheaper. He said he knew that but $20. was cheaper than all the bad publicity the guy could spread, He told the guy don't ever try that again. Remember some professionals are expensive at $60.00 per hour and others are cheap at $100.00 per hour. You may lose some customers if you charge the going rate but you are probably well rid of them, I had those guys say "never coming back" but they did when cheaper professionals screwed up.  Good Luck, I predict you will have a successful business. Sorry for long post...Harvey.

I ran into that a lot when I was doing excavating - people wanted a firm price , so most time I gave a bid of XX a hour and not to exceed a certain price rather than a actual dollar amount . It allowed some variation in final price . 
 One neighbor I bid a basement for at not to exceed price / but he said he wanted a firm bid so I told him firm price about twice the not to exceed cost  - he hired a neighbor kid to dig it with a skid loader at some price lower than mine , Machine broke down , large rocks and buried water line exposed , old foundation from previous building exposed . 
 He asked me to finish job - told him it would be for the firm cost estimate , no matter if 1/2 of the job was already done as all the problems were now known . 
  Mad a H but paid me to finish it + he paid the neighbor kid also 

Coke, I made estimates for mechanic work as you did for grade work, the client would walk to someone else and end up paying more where the job was still not done right or completed at all, then they would come back insisting I repair for price quoted.  Explained to nearly all of them I quoted PRIOR to a Botched Mess, to fix the Botch Up is T&M ONLY and they could take it somewhere else if could not do that.  90% of them agreed and lived with the costs.

Hey, I recommend that you know how to value your work and time. Nowadays, a good mechanic is hard to find, and you must charge customers fairly. When I started my small business, I was indulgent with my workers and asked for little money from customers. My mom found out and was mad at me because I didn't handle my business correctly. She also owns a company and told me about https://www.prendo.com/leadership-challenges/engaging-stakeholders. She said that learning how to become a leader and managing my time is vital. Perhaps you should think about this. Good luck!

Edited by Bekebe - 06 Mar 2022 at 5:43am