A simple guide in how to calculate your prices

When detailing cars (semi)professionally, it helps to know what you can ask for a certain job. Although you still need experience to fill in certain formulas, this will give a rough idea of how to get a fair price and to calculate your expenses.

Why the need to calculate

Simply put, if you don’t know your expenses, you don’t know your earnings. Doing a job for 100 pounds might sound like a good deal, but if you spent 75 pounds, it starts to sound less interesting. Knowing what your numbers are will help you to calculate a fair price.

An example:
Lets say you are going to do a full days work on a car (8 hours), and you know you are going to spent 40 pounds of product on that car. you also know that you work 20 days a month and the rent for your unit is 1000 pound. What are you going to end with (per hour) with that job if you charge the customer 500 pounds?

• Your daily rent is 1000(monthly rent) / 20(amount of days you work per month) = 50 pounds
• You already know you are going to spent 40 pounds of product on the car
• You are only going to work on that car for 8 hours, and don’t do any other jobs
• You have been on the phone with the customer for a total of 1 hour to get this job
• When the customer is coming to pick his car up, it’ll take another hour from your time
• On average you can do 20 cars with your pads and MF towels before they need to be replaced. A full set of these costs 200 pounds. Making it 200 / 20 = 10 pounds per car
• You can do 100 cars before your polisher needs to be replaced, it costs 250 to replace. Making it 250 / 100 = 2.5 pounds per car
• You are going to use 40 pounds worth of electricity and water

The total is then going to be:

• Rent: 50
• Products: 40
• Pads and MF towels: 10
• Polisher: 2.5
• Electricity and water: 40

Total: 142.5 pounds to do this job. Anything over this amount will be earnings.

Amount of hours:

• Hours working: 8
• Hours on the phone: 1
• Hours delivering: 1

Total: 10 hours.

You where gonna charge the customer 500 pounds for the total job. 500 – 142.50 = 357.50 pounds earning. Divide this by the total amount of hours (10), and you end up with roughly 35.75 pounds per hour.

However. We’re not there yet. We havent taken into account that you need insurance, pension-funds, marketing, stationary, further equipment and off course taxes. So in this very simplified calculation above we found that we could earn 35.75 an hour. But after all the other expenses we have, this number will be much less. You also need to take into account that you will have days that you don’t have a full day of work. So your earning that day will be less, even though your insurance, rent and many others will stay the same. You have to prepare for those days.

Things to take into account

Knowing your spending, will result in knowing your earnings. The things in the list below might help you to get a better insight in these.

Fixed costs per month. (these are always the same at the end of the month)
To know what these cost per day, add them up and divide them with the amount of days you are going to work this month.

• Insurance
• Rent
• Marketing related expenses
• Maintenance on your website

Variable costs. (these change with the amount of days you work, the amount of jobs you get etc.)
To know what these cost per day, divide them by the amount of jobs you can do with them, divide this number with the amount of jobs you do per day (on average).

• Products used (this needs experience to estimate properly)
• Energy costs (how much are you going to use on an average job)
• Stationary (how long does it last and what does it cost to replace)
• Washing machine (how long does it last and what does it cost to replace)
• Polisher (how long does it last, and what does it cost to replace)
• MF towels and polish pads (how long do they last and what does it cost to replace)
• A guy you hire randomly to do some work for you
• Wear and tear on your own vehicle (how long does it last and how much does it cost to replace)

Others. (these are not fixed per month or per job, but do cost money)
To know what these cost per day, See what they cost and divide that with how long they last (in days). Then add them up.

• Equipment such as lighting, cabinets, your computer etc.
• Maintenance on your unit (new heater, coat of paint, plumbing etc.)

What to deduct from your earnings.
These are deducted at the end of the calculation.

• Tax percentage
• Your accountant

Lost hours to take into account.
If you want to know how much you’ve earned per hour, don’t forget to take this into your calculation.

• Cleaning the unit
• Setting up in the morning
• Talking to customers
• Delivering vehicles
• Talking with sales representatives
• Doing your administration
• Unpacking the orders you’ve received
• Ordering new products

If you know all of these variables, you start to add things up.
[Total fixed cost per month] + [Total variable cost] + [Total others] = (semi total) – [Total what to deduct from your earnings] = total cost per day.

When you have done the above, you can make a very fair estimation of what your costs are per day. If you know how long a certain job will take, you can make an accurate estimate of what that job will cost you. Then it is much easier to calculate what the price should be for this job.