Business is slow this season

[wlhequipment]

Random thoughts about business and money.

I remember my first year out on my own. It was about 10 years ago now. You could darn near hear the crickets. That changed eventually, and business has been growing since. I didn't even slow down much during winter. Maybe a little. Business has slowed recently though. This winter is worse still. Q4 last year was the worst in 4 or 5 years. Q1 is on the same path, so far. Fixed costs go up every year, and profit margins are going down. It's getting harder and harder to keep a shop profitable, but the truck is fairly profitable. In fact, running the truck is what is keeping the shop alive, really. I don't want to lose the shop, because there is nothing else even close anywhere near here. Not to mention the massive effort to clean all my crap out of it, and give it back to the landlord. I feel like I'm a little hamster running in his wheel keeping it going though. I raised my shop rates last year. It looks like I'm going to have to raise em again. I guess it's a good thing the price of new machinery is through the roof, so my existence stays justified. I wonder how long that will last.

 

[Old Doug]

I figured the rest of the country was like here . Not enough shops and mechanics everyone having more work than they can handle. I think if there were double the shops maybe they could keep up.

 

[sfrs4]

Is it worth speaking to the landlord, some are ok, some are heartless. If you've been a good tenant that pays on time and hasn't trashed the building, then they might be open to negotiation on rates, I'd rather receive less rent with less hassle and payments regular, than more money but more headaches etc. Even go as far as to say if and when work picks back up you can pay a little more again maybe

 

[Shimmy1]

Random thoughts about business and money.

I remember my first year out on my own. It was about 10 years ago now. You could darn near hear the crickets. That changed eventually, and business has been growing since. I didn't even slow down much during winter. Maybe a little. Business has slowed recently though. This winter is worse still. Q4 last year was the worst in 4 or 5 years. Q1 is on the same path, so far. Fixed costs go up every year, and profit margins are going down. It's getting harder and harder to keep a shop profitable, but the truck is fairly profitable. In fact, running the truck is what is keeping the shop alive, really. I don't want to lose the shop, because there is nothing else even close anywhere near here. Not to mention the massive effort to clean all my crap out of it, and give it back to the landlord. I feel like I'm a little hamster running in his wheel keeping it going though. I raised my shop rates last year. It looks like I'm going to have to raise em again. I guess it's a good thing the price of new machinery is through the roof, so my existence stays justified. I wonder how long that will last.

I have always tried to not be part of the problem, and held my rates in check as long as possible. That being said, if you started 10 years ago, your rates should be at least 25% higher. Some guys insist that things should close to double every 20-30 years in normal cycles. I think that's a bit extreme, but I guess it'll be another 10-15 years before we can accurately answer this question.

 

[wlhequipment]

Shimmy is definitely on to something there. When I started out, my shop rate was 95/hr. I got that number adding up all my fixed costs, mixing in some variables and guessing at how many hours a day I'd be productive, etc etc. I held on to that rate for awhile. When I got a truck a few years later, my shop rate was the same, but the mobile rate was 110 / hr. Now shop is 105 and mobile is 135, and that is still the lowest around. I raised em both last year, and it looks like I have to keep doing that. It's nutty how much stuff costs, but that's the world we live in, I suppose. I really hate doing that. I mean, 135 an hour sounds crazy to me, but calling around to other mobile techs, it's dirt cheap. Alright, pity party over, back to work.

 

[Shimmy1]

Shimmy is definitely on to something there. When I started out, my shop rate was 95/hr. I got that number adding up all my fixed costs, mixing in some variables and guessing at how many hours a day I'd be productive, etc etc. I held on to that rate for awhile. When I got a truck a few years later, my shop rate was the same, but the mobile rate was 110 / hr. Now shop is 105 and mobile is 135, and that is still the lowest around. I raised em both last year, and it looks like I have to keep doing that. It's nutty how much stuff costs, but that's the world we live in, I suppose. I really hate doing that. I mean, 135 an hour sounds crazy to me, but calling around to other mobile techs, it's dirt cheap. Alright, pity party over, back to work.

You never want to be the cheapest option, but also you will cost yourself business if you're the highest priced. I like to make sure I'm in the 75th percentile. I took a pretty good bite last year, because I had been holding pretty steady.

 

[Acoals]

I think 25% is a bit light. Here is an interesting exercise: Google "Starting price 2014 Ford F250"

Google will inform you that they started at $30,000.

Now Google "Starting price 2024 Ford F250".

$47,000.

That's more than 25%. I am an excavating contractor, 99% of my work is done with trucks and machines. I am not an economist or a math guy, but the pickup prices are more like 50% up. Used truck prices and parts prices follow new prices. I just bought a 2011 F250, between initial price and getting it into shape I am past $35,000. For a 13 year old truck with 200k on the odometer.

The rates have to be able to sustain the equipment.

If you are a mechanic, dig out some old Snap On receipts, and check the current prices; you will find about the same thing.

 

[hvy 1ton]

What the dealer shop rates around you? Here it's $140-160. 3 years ago it was $90-110.

 

[skyking1]

Prices are very regional, but here's the picture I took on my truck shop the other day.



They're probably middle of the road on pricing for around here.

 

[Mobiltech]

Nothing has changed here . Still swamped in work. I turn away a lot of calls. I don’t even answer if I don’t recognize the number.
On the rate side I don’t often change my rate but I do charge more hours if it’s a job that requires more experience and is higher difficulty.
I don’t post my rates on the bill or the hours. Just a lump sum for each segment of the job. I also charge extra if I use my crane or telehandler.
I built my own shop which I do 50 percent of my work in . It’s 50x80 with 20 foot ceiling .Gives me lots of room to get things in. I can be working on 5 projects at once. With parts delivery being shitty that is a good thing. I built it on my acreage so it isn’t a big tax problem.

 

[Jonas302]

Rates have no meaning if the guy doing the work can't perform I would rather pay 200 an hour for some one that knows the job than 75 an hour for someone that takes an extra day

Applys to mechanic work and dirt work

 

[skyking1]

Nothing has changed here . Still swamped in work. I turn away a lot of calls. I don’t even answer if I don’t recognize the number.
On the rate side I don’t often change my rate but I do charge more hours if it’s a job that requires more experience and is higher difficulty.
I don’t post my rates on the bill or the hours. Just a lump sum for each segment of the job. I also charge extra if I use my crane or telehandler.
I built my own shop which I do 50 percent of my work in . It’s 50x80 with 20 foot ceiling .Gives me lots of room to get things in. I can be working on 5 projects at once. With parts delivery being shitty that is a good thing. I built it on my acreage so it isn’t a big tax problem.

Being able to spread out and organize the parts and pieces on several jobs in the dry is priceless.

 

[Welder Dave]

If you've been a long term tenant it wouldn't hurt to ask if you could a bit of a break on slow month's just until business picks up.

 

[Vetech63]

Don't sell your labor too cheap.......or too high. If your well-equipped and have the experience, try to stay within 15-20% of the highest dealer rate in your area.

 

[Shimmy1]

Don't sell your labor too cheap.......or too high. If your well-equipped and have the experience, try to stay within 15-20% of the highest dealer rate in your area.

Hmmm. Sounds familiar............

 

[CM1995]

I just bought a 2011 F250, between initial price and getting it into shape I am past $35,000. For a 13 year old truck with 200k on the odometer.

Curious what the spec's are?

I have a 2013 F350 6.7, CC, 4x4 with 200K on the clock. Bought it new.

The rates have to be able to sustain the equipment.

Without a doubt. I am responsible for setting the pricing that we need to sustain our operation and make a profit. Others come in cheaper than us all the time but the last thing I want is someone else pricing a job for me. If I can't get what I want to do the jobs we bid, then it's time to close the doors and find another avenue of revenue.

 

[Acoals]

Curious what the spec's are?

Probably pretty similar to yours. 6.7L, four door crew cab, short box, 4x4. We brought the truck out of Wyoming; local trucks up here tend to be all rusted out and not worth the effort. I am pretty picky with the mechanicals, and I am streamlining my equipment so as to just run one light truck, so we ended up doing quite a bit of work to the truck. It's like all used stuff, buy it and then pour a whole bunch of money into it.

I am pretty much of the current opinion that I would have been long term money ahead to have bought a new truck, but it is what it is.

 

[Truck Shop]

135 an hour sounds crazy to me,

What percentage scale do you use to mark up parts?

 

[Mobiltech]

Being able to spread out and organize the parts and pieces on several jobs in the dry is priceless.

It beats working out in this stuff!

 

[CM1995]

I am pretty much of the current opinion that I would have been long term money ahead to have bought a new truck, but it is what it is.

IIRC I paid $43K in 2013 for a F350, CC, 4x4, 6.7, power equipment group, factory gooseneck hitch and towing package. A 2023 of similar spec with a few extra cab conveniences can be bought around $60K.

Depends on what I am using the truck for. Our '13 is a spare truck that gets very little milage in its retirement. If I needed another daily performer I would probably opt for the new truck as downtime is expensive with the cost of labor burden these days.