Pricing & costing
Labour rates, flat fees, parts pricing and written estimates.
The hourly rate is the most copied and least calculated figure in a workshop. Read it off the shop next door and you inherit their rent, their lifts and their utilisation — three numbers nobody can see from outside. It is calculated the other way round: a year's costs divided by the hours that actually get invoiced.
That is where the most expensive mistake sits. What is paid for is not attendance but the productive hour, and between the two lie holiday, sickness, training, cleaning, waiting for parts and every diagnosis nobody charges for. Calculate with attendance and you spread your costs over too many hours, then wonder about the year-end figure.
Around the rate sit the questions that decide the margin: flat rates that look attractive and give time away; parts pricing with a markup that has to carry procurement; and the estimate, whose legal effect many underestimate. This section takes each of these apart on its own — with the arithmetic behind it, not with a rule of thumb.