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 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.
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
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.
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.
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.
What the dealer shop rates around you? Here it's $140-160. 3 years ago it was $90-110.
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.
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 ****** that is a good thing. I built it on my acreage so it isn’t a big tax problem.
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
Being able to spread out and organize the parts and pieces on several jobs in the dry is priceless.
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.
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............
Curious what the spec's are? I have a 2013 F350 6.7, CC, 4x4 with 200K on the clock. Bought it new. 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.
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.
What percentage scale do you use to mark up parts?
It beats working out in this stuff!
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.
Garbage truck and salt spreader should be right there with motor home
Around here every heavy truck/equipment shop is covered up with work for months, some are charging astronomical prices as a result (which I don't agree with.) As to pricing, I'm probably in the top 10-15% on price for a lot of the work I do. You don't sell work on price, you sell it on value. Sometimes the most expensive is actually the best value, the cheapest rarely is. If you do premium quality work and offer an excellent customer experience, charge accordingly.
Fire apparatus and ambulances . . .
The dump truck needs some extensive engine work and I have no place to get it in out of the weather. In the PNW it is not so much snow, but rain.
Undercutting the competition can backfire in a big way. Customers may think you don't do as good of work and/or aren't experienced. Another big thing you don't want is to get a reputation as basically a scab that can't get work unless you undercut everybody else. Nobody will want to work with you or deal with you. Equipment dealers and other vendors you deal with will get wind of it from their other customers who might happen to be your competition. Your undercutting could be affecting their business as well. It's not good to have a bad reputation, right off the bat, in the industry you're trying to break into.
The key is to start with a small core group of faithful customers that trust you and your work. Do your best to keep them running.Your business will grow from that group as they bring in other good customers by referrals. If someone is giving you a hard time about your work and or is saying they can go anywhere they want to get work done . Cut them off and let them go elsewhere. Also “ Never Put All Your Eggs In one Basket” Customers will retire and new ones will take their place.
I don't know Colorado. But I thought it was a high cost state. You being near a big city. If so your rates seem very low. I have heard it said that raising rates did not cut anybody's work. It just brought them better customers. Remember also, with 10 years experience you have become much more efficient. So you will have less billable hours to accomplish the same tasks. Your rates need to rise to cover that, and then some, so your profit will be higher, and also account for inflation in the money you are profiting. I also don't think your web page is helping you. It makes it look like a small power tools shop. I am more web site oriented than FB oriented. Of course I do not have much of a web site and no FB anyway so who am I to talk. I have active marketing all over the territory. If you can find somebody to put your name out there to the customers you might want, it helps. Word of mouth is great and the internet is full of stories about guys who only run on word of mouth, but the right marketing pays back. You have to find the right marketing guy though.
I believe 5% rate raise every year is inline with inflation. Everything gets more expensive, so your services should follow. The biggest thing is not assume that your customers will leave due to a price increase. Offer value, not price.
Inflation is over 8%. 5% will not cover it. You need to be well north of 8% because otherwise you are getting cheaper or staying the same. And you always need to be advancing your business. I agree that customers will not necessarily leave. First, who will they go to? Any outfit that has their own jobs lined up will be more concerned with getting fixed quickly and efficiently than the bottom line on the invoice, so they can get back to making money for themselves at 10x the rate you cost them for some repair.
When I started doing skid steer services back in the 90's I wasn't sure what to charge. I wanted to be in the range of what others were charging. My dad said if people will pay $35/hr. they'll pay $40/hr. The same applies the other way too. If people will complain at $40/hr. they'll complain at $35/hr. Charge $40/hr. and you're not throwing $5/hr. away.
I slowed down a bit in December but most of my customers are loggers and the mills had cut them all back because they’d met the annual quota. in January we went on vacation for a week and then Had a cold snap that kept the loggers home. Last week we got 6-10” of rain which kept them home. weather cleared up Friday and phone started ringing just about the time my vgt actuator decided to retire. I suspect I’ll be back to wide open next week. I charge about $50/hr less than the dealers around here and I’m fixing some of their F ups. it seems like most of my customers are more concerned with minimal down time and not so much the cost.
You need a more personal touch with your web site---something along this line. Business cards either get the publics attention or it's so bland they ignore it and round file. I did some work for a business about 12 years ago--it did make a difference according to the owner. *
Absolutely! If you have a distinctive business card or even a company logo that's really unique can bring instant recognition. It's a really good way to advertise and get your company known and a very inexpensive way to advertise. Doing other things no one else is can also make you stand out. My sister's salon was the first in Victoria to advertise on busses. She's been doing it long enough she gets better deals and even extra busses at times. There's also been times they've just left ads on even though though they were technically ended. She also changes the ads so they're new and not the same old thing. Other salons have tried but never did it long term or more than 1 bus. I think my sister does it on 4 busses generally but has had as many as 6 or 7. It does cost a bunch but she's always busy. Her salon is very well known for the ads on busses. She makes some of her own hair products too and Westjet featured them in their in-flight magazine one month. Getting your name and your services out there in creative ways sets you apart. Potential customers won't have to search the internet for contractors if they remember seeing your catchy business card or logo.
Over here in the UK we fell into recession during October 2022.This is just my opinion and we’re not officially into any economic dip. The quarries are the first to slow down, then the construction industry follows. My D9 has been snoozing for 14 months now with no work.I have had a couple of jobs come in for it,but it wasn’t with regular customers,so I turned them down.I don’t actively seek work for the tractors anymore. The D8 has suffered too,but it’s still out doing a few days every month.This is how I actually like things to be honest. In general, the construction boys kept steady enough last year,but most of it was legacy jobs needing finished off. Now things are really biting for many of them. To be honest,our country has had it too good in reactant years with abit of a deceant boom in the game.Silly rates from drivers haven’t helped either.Things needed to cool down. They have now.
As for prices and machinery sales and exports,One of my customers is a dealer specialising in medium to large Cat construction and mining gear.Sales are pretty poor in the domestic and foreign markets,but by no means dead.Things are ticking over. I was at the big Euro Auctions this week and watched 6000 lots go under the hammer. There were big crowds and heavy turn out of internet bidders. I suspect we were all there as we’ve nowt else to do at the moment and hoping to get some bargains. This wasn’t really the case.There was no evidence of silly prices either way,but it’s reassuring the see the big boy brands making 25 to 30% more than similar machines of lesser . Cat is still king.
As for the OP’s thoughts on paying rent to his landlord,This is the main part of my business, so I can offer him my opinion as a landlord. I have quite a lot of my tenants struggling to pay me through the winter months.Many of them are small mom and pop outfits who don’t have much behind them,but are of sound character.I allways let missed rents build up and the they tend to get themselves squared up with me within a couple of months.I also should point out that I tend to let the commercial and domestic properties cheaper than what they should be.This ensures I have 100% occupancy and it’s also a better the devil you know situation.No landlord wants to evict tennants out unless absolutely necessary.Things can be worked out.As the OP allready said,there’s a lot of belongings that need moving and huge upheaval for both parties. I suspect his landlord would give grace on the rent.I would suggest offering part payment with a promise to square it at the earliest possible moment.However,I would not recommend you asking for a rent reduction.I would serve notice if that was the case. Best of luck with it all,and remember this……..if you’re a year or two of feeling the downturn,then you’re allready a year or two closer to coming out the other side of it.
Nicky what type of properties do you have? Generally speaking of course. Retail, apartments, industrial?
A partial payment is along the same lines as asking if you could get a reduced rate in slow month's. My sister told her landlord she couldn't pay for 1 month during covid and the landlord agreed. Maybe reluctantly but my sister was a long term tenant and always paid on time. She couldn't be open for a while during covid and had to lay off most of her staff. In doing so had to pay $30,000 into unemployment. That's a good chunk of money when you have nothing coming in for several month's.
its been 30% since day 1. +30 on everything
My website blows, I'll be the first to admit. I am not a web designer, it was the best I could do
I bet he would, if I asked. He's a total c$%t, but can be reasoned with.
All good points!
A good website will keep you plenty busy, find a guy to build it for you. The kind you build yourself won't push work into your shop.
I get asked often if I have a website.. I have to say no.. But to be honest, I can’t imagine being busier than I already am.!!!
A guy that accepts bad checks doesn't need a website! LOL
Bravo if you don't need a website to keep busy.
Oh man he accepts bad checks? I wish I knew that sooner
I have a small portfolio of commercial and domestic properties.Some I deal directly with the tennants,but I have an agent dealing with the domestic tennants.Its best not to get emotionaly involved with people that live in houses you rent to them. The D8’s are what I have referred to as a profitable/diabolical side business,depending how they are behaving.It keeps me with a thirst for life and beer and in contact with my father and the likes of all the fitters etc.I consider all these men in this industry to be of the finest breed or real men. The types of associates I deal with in my other little businesses are not to my taste so to speak.I’m allways suspicious of men with spotlessly clean hands lol
" Looks at smashed nail that will never grow back right on one hand, and that finger that slightly pointy from being snipped off by the tailgate" We could probably have a pint next time I get over there
Dirty hands= clean money......
Unless it's blood then it could go either way.
Customize your logo for starters as others say, and add some pictures of your work. Who am I to speak I haven't gotten over 1 customer yet
I don’t have a website. Never have. I’ve thought of it but I always figured that word of mouth was the best advertisement. I’m not saying it to brag, I just never thought people would go looking for a field mechanic by way of internet. on second thought, I do have a google business page and a LinkedIn account but I never do anything with them. Does that count?
I did a job yesterday from Texas.. I have one coming today from Utah.. People sure do like to talk.!! Lol
I was doing an eviction once. The judge here told me when I took a partial payment I effectively changed our contract. I will never do it again.
Oh, he takes checks? I thought he wanted money .
I never did any of that and I stay busy with a waiting list. Of course I'm not basing my livelihood from my shop, but it could be a full time profession if chosen. Just do good work at a fair price and the rest kinda takes care of itself.
I have a web site but a web site alone is obsolete. In order to find your web site, the customer needs to get there from a search engine. And search engines are all filled with advertisements in the first page. So they will never find you among the noise. It used to work but not any more. Now the purpose of the web site is to provide a place for the customer to go after they have clicked on your ad. You have to pay to get ads on Google to get people to your web site. And it is not a DIY project. You have to hire somebody to manage it all. And it is always changing. So have a professional web site. But without extra effort, nobody will find it. Put it on your business cards. They will find it that way.
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I have never seen a real connection between web sites and heavy equipment contractors who need work done. Half of my best customers don’t even know how to text! They will ring the phone repeatedly then get one of their young guys to send a text. I get a lot of “how come you never answer your phone” I tell them when I’m working the phone sits in the truck. Just text and I’ll get back to you next time I stop for a break. Remember the days gone by when we would head out on a job for the day and never talk to anyone until we got home. The world could be ending and we were oblivious.
I just had that discussion with my brother. I miss those days.
If you have plenty of work then that method is fine. I say that without sarcasm. Of course everybody who leaves a VM needs a return call at the end of the day at least. Not a couple days later. I heard a plumber say one time. If you are laying on your back in a crawl space in the mud and the phone rings. You answer it. That has always been my motto although it is changing now I have more work than I know what to do with. It is a hard habit to break. Although mine is more of an emergency service business so it is a little different. Best thing you can do is get your wife or somebody to answer the phone when you are busy. People like to speak to someone when they call. At least they know the message got through and a real person is there. I had been using Google Voice free version. But support for multiple phones is ending. I am in the process of switching to Vonage. Have not got it working yet. Voicemail transcription, texts and everything from a computer desktop.
You get it in writing it's only for a specific time or month(s).
Things are different between where you are and where I am. I had given them a receipt which stated the payment amount they made and their owed balance. That is as 'in writing' as it gets.
You were dealing with an eviction. The judge may have been sympathetic to the renter. Judges aren't always right. If something was written and signed in advance may have had a different outcome.
That’s one thing that has changed in my business since I moved to Texas. People will not wait down here and seem to get frustrated that I’m busy working on someone else’s equipment. People I’ve never met will call and it goes like this “ hey my name is bob. I got your name from Jim who says you’re the best mechanic in east Texas. (Here we go) I need my whatever repaired. Can you do it ? Me: sure but it will be a couple days. Bob: ugh. It would be better if you could do it yesterday All I can think is that if I’m the best mechanic in east Texas (I’m not by the way) is what makes them think I’m sitting home waiting for their call. Then they make an excuse to not get it scheduled and I never hear from them again. Phew! I’m done ranting. I do have a pretty good customer who calls me and the dealer. Whoever can get there first gets the job. Typically it’s me because they are always 2 weeks behind.
"Well the crane we had booked for tomorrow- just called and cancelled. We don't usually use you because you're so expensive". I'm booked up for a couple days, I can try to fit you in maybe Thursday afternoon? "oh no, we've got the framers scheduled and the trusses are here- you'll have to get here tomorrow morning" Me laughing....
People will not wait anywhere, instant gratification, I want it and I want it now. And how did that happen, the PC and cell phone created that culture. The only area left where people have to wait {unless a cancellation} is in the medical health field. * When working on cars, trucks or equipment it's the customers lively hood. If they don't see it parked outside they get nervous. Towards the end of taking care of a companies {outside work} at the shop, I really enjoyed being able to tell them ain't going to happen today or tomorrow, parts are three days out. Out would come the fiddle & the whining would start like a country western tune. * The older and longer you guy's stay at it--you will get sick and tired of the public and there demanding. after awhile they all look the same--a sphincter on top of shoulders one big pucker. * Then there's the 8 year old kid that comes in asking if you can air up his bicycle tire, you drop what your doing and take care that in a minute-seeing him smile put's a smile on your face, for that kid was the best happiest customer all day.
The joys of retail: I've learned through the years and various involvements, the transients don't matter much and tend to cause you grief. Doing good work and standing behind the occasional failure of the same, (even if no fault of yours) will carry you far. A strong, repeat customer base is very important but again, don't worry about the transients. It's like everybody can purchase something cheaper online than local, I get that, but usually won't install furnished parts and stand behind them if installing them at all. Sometimes "parts is parts" and I get that too, but that markup is what keeps the lights on, and the tank fueled which is what the customer doesn't see along with you have to live too. You don't need those that are pinching pennies and expect you to follow the same analogy. Send them to the curb. Takes a while to weed them out for certain, but once your reputation is cemented it can be built upon and clientele built upon that reputation tend to follow. Of course you have the ones that will surf for the cheapest price they can find, but they too remember getting screwed and then are quiet when returning so you can make repairs. Not your place and don't step into berating anyone, just make the repairs and charge accordingly without barter. Make certain it's on their dime as that drives the point home without even talking about it.
A cell phone is a double edged sword. If you answer it a potential customer will figure you aren't busy. If you're really busy, sometimes you just want to ignore the phone. The worst is people expecting you can come and do their job right away after there's been a spell of rain or bad weather. They get all upset like it's your fault you're behind and have other customers ahead of them due to it being too wet to work. When we get snow in the forecast is when there's all of a sudden a mad rush to get winter tires. Nobody does it a few weeks in advance, it's always last minute. The tire shop I go to put a notice on their door "No walk ins appts. must be made for all services".
I have the msg on my vm: Thanks for calling but if I don’t answer, I’m elbow deep in calibration fluid.. I’ll return your call as soon as I wash my hands.. That seems to hold them off for a few hours..
I didn’t deal with this attitude back home very often. I mean, sometimes a plow truck would break down in the middle of a snowstorm and we’d scramble but generally people didnt assume I was sitting at the house with my boots laced up and the truck warming up just waiting for their call. last spring I was working on a tub grinder and a fella who owns a pile of equipment called me about a broken mulcher. I had been trying to get his business for a while with no luck. Told him I could be there the following morning but I was elbows deep in a job and couldn’t leave. He told me he’d get someone else and I’ve never heard from him again. To this day I still feel like I made the right decision. I’m not going to bail out on a job from a customer who was regularly hiring me to help out someone who had never given me a job. as far as the cell phone goes I always try to answer it during regular hours. At night I leave it downstairs with the ringer off. Family knows if there is an emergency to call my wife’s phone.
A Perceived Emergency In your mind does not necessitate panic moves or excited changes of plans for Me. Each takes their turn. Had that sign for years, do not know where put it. No need of it these days. Bad checks were never good especially when the passer came back months later forget passed bad paper but needed more work done. Could get really interesting in a hurry.
It can be an interruption that will cost some day. Again people impatient can't leave a message, on a phone full of gadgetry just for that reason. And as time rolls on as with the use of texting it's going to boil down to just a-----{.} which I see is becoming a common thing on here, because people too lazy to type out a reply, that gets in the way of right now.
As noted needed day before yesterday put it off for weeks now machine down panic. No my concern. Shop rates in house heee even in a Ag/Tourist Burg as ours $110 at Ford, $135 at Tractor shop, independents are overwhelmed at $130/hr cannot fend off calls. Go bigger city, shop rates from $150-230/hr and that Per Man on a job, takes two or assistance for one are paying for two.
Well what's needed is for everyone to come on HEF to get all the free info and go to work taking care of their own.
Had a Laugh this morning, had a Interested party in the KW, for a day. Asked how many miles on Engine, explained still less than 1000, he asked who overhauled, just stated, Myself. Long Pause then Thank You. No word since. Got to love those that never ask further, believe ONLY a Shop can do work on Cat engines. Be another winder shopper along shortly undoubtedly.
“Window shopper”.. lol Wife calls them “tire kickers”.. She’ll see me on my phone for 30 minutes- an hour at a time answering emails.. and say, “what. more tire kickers”.. lol
You're a saint, pumpguy.
Had a guy text me on December 31. Had a skidder that got rolled into a pond and now has electrical gremlins. Wanted to know how much to fix it. I gave him my hourly rate and mileage. Never heard another word until late january. Wants to know how soon I can get to it. Told him the following week but it ended up being the week after because of the 8” of rain in 3 days we got. I was behind and then lost the vgt actuator on my truck. Now he’s getting impatient and I’m in no hurry but finally got over there. He’d replaced the ecm and the dash display but never got matching software. Unfortunately the dealer has to provide the correct software. he tells me “Yeah I thought that’s what the problem was“. So why didn’t you just call the dealer a month ago and have them take care of it?
I probably shouldn’t put this for all to see: I have a conversation book.. I jot down names, types of pump they have, the problem and how much I ball parked the job at.. OH, AND THE DATE.!! SO… when you call me 3-5 months later.. whining that u NEED your machine, I can “probably” fit u in.. lol My favorites are the locals that tell me they have about 20 machines and I’ll be getting all of their work from now on...and I never see them again..
And don’t forget the guys who promise to flood you with work if you’ll give them a deal. I also had a guy ask me for a kickback because of all the work he got me at a sawmill. I pretended I didn’t hear him.
Yes, that’s what I was getting at.. I’ve learned.. but it still hurts KNOWING that they’re standing there lying to my face, after I pushed jobs back to HELP THEM OUT..
The only customers who get jumped to the front of the line are the guys who don’t bitch, pay on time, and actually give me all the work they can. Other than that, I’ll just put you on the list.
I get those calls sometimes, guys calling and asking me to come fix their whatever, and can I give em a deal on this one because they have lots of other business to give me. Every single one of those clowns is full of it. Most of the time, when I do get new legit business, they don't even ask what my rate is, they just ask how soon I can fix their machine. Their downtime cost is always higher than my rate anyway.