ADN WINTER 2022_WEB

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THE BUSINESS OF DETAILING Are your prices right? By Rob Schruefer rob@onspotdetailing.com How you price your service is always a hot topic in the detailing world. There are so many different detailing styles and markets in the industry that there is a place for everyone. I have seen this debate play out in many forums and even in person at industry events. There is always someone who thinks they are a better detailer or a better businessperson because they have the highest prices. The example I always use is to illustrate this through the McDonalds and Ruth’s Chris Steak House comparison. They both obviously serve food to their guests, but one does it at a significantly higher price point. Even though McDonalds sells food at a lower price, no one would consider them unsuccessful or a worse business than Ruth’s Chris, they just cater to a different market. Who are your customers? The most important piece of pricing your services is knowing your market. If you live in a town with a lot of blue-collar, working-class people, it will not make sense to exclusively offer $5000 correction and coating services on their super-fancy car. Sure, there are some people that could afford that, but would it be enough to sustain your business year-round and into the future? Instead, you have to create services and prices that fit the market and demographic in which you operate your business. Four important variables I also hear a lot about what other people in town are charging and worrying about what others are doing. You should not concern yourself with what others are doing. What works is you creating your prices based on the following four things” ✔ ✔ ✔ ✔ Product costs Overhead (Rent, insurance, utilities, etc.) The amount of profit needed to support yourself and your family Labor costs (if you are going to have employees) If any one of these items is out of alignment with your prices, your business cannot and will not survive. Lowering your price below the point of profitability to compete with someone else does not make financial sense. The most important variable of all If it wasn’t difficult enough determining your prices with the variables listed above, we have not talked about the biggest variable yet, and that is time. I am talking the time is takes you to complete the service as compared to the price that you charge. I cannot even begin to tell you how many times I have seen detailers talk about the 24-hour correction they did on a black vehicle. Yes, the vehicle looks absolutely perfect, but if you were only paid a few hundred dollars to complete it, you probably made less than minimum wage. If you are not charging enough for your time, everything else is irrelevant. Gauging how much your time is worth is a tough question to answer. If you ask a dozen people, you will probably get a dozen different answers. No one can tell you how much your time is worth, or what your market can support. When I try to calculate how much a job should cost, I estimate how long it will take me to complete it, and then put around $100 an hour on the service. This allows me to cover all of the costs listed above and gives a little bit of wiggle room if something takes longer than anticipated. This is by no means a definitive guide for all detailers, only you can know your costs and what you need to make per service, but it is a helpful way for new detailers to create a pricing plan. Final piece of advice The best advice I can give is to figure out your numbers (costs) and work backwards from there. Add all the costs up, add your desired profit percent on top of it, and there is your price for the service. Also remember, the better service you provide to your customers, the less the price will even be a factor. Rob Schruefer is the owner of On The Spot Detailing out of Columbia, Maryland. He proudly serves on the board of the International Detailing Association and works tirelessly to ensure that detailing business owners receive business development support to help them achieve their goals. 18 | AUTO DETAILING NEWS | VOL. 7, NO. 4 • WINTER 2022
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ADN WINTER 2022_WEB

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