yup, , i had car built, i did All the nitt picking running around to keep fab dude up to speed, toobing , components, pizza& beer,sorta like always bring your diff guy a clean pumpkin, they like that.
I missed some thing in my numbers too. It’s called profit. Or margin. At $52.50 this hypothetical shop is eating all the money up at 100% capacity level.
Profit margin needs to be added to this equation. In my book it would need to be at least 33% to make up for slow times. That would kick the shop rate to $70.00 per hour.
And if you think employees are the cheap and easy answer, look into labor laws here in Cali. Work comp sucks and don’t even think you can ask a guy to work over time with out paying him. Its easy to get sued for this. Plus after paying his medical cost since your not going to find a responsible employee that will work with out it. (and the state requires it if you work more that 32 hours a week). Your employee is going to be making more than than the shop owner. And if the shop gets slow, he works first to keep him busy so he won’t quit. Oh yeah. He gets paid first too. Because that’s how responsible business owners do it.
And don’t forget those awful state and federal taxes. Gotta pay them first too. The fines the feds levy are crazy bad for being just one day late on the employee withholding. You don’t even want to know what happen if you get a month or 2 behind. (I have seen guys end up behind bars for this when it gets really bad). You know, income tax, fica, social security, and some other stuff. Yeah, btw, all that stuff does not come out the employees income. It’s called frindge benefits. Typically is about 1/3 more on top of the employees income. The business has to pay that too. Oh yeah. Now the shop owner, lead fab man, lead sales man, and environmental compliance manager and account has to figure payroll with holding too with all his spair time. And don’t for get the permit fees. You have the city, the fire department, the counties b.s. too. Who did your storm water run off plan? Don’t have one? Well there’s a fine for that. And you better hire a consultant to get you up to speed on that. Because now your in the counties radar and they will be back to assess more “fees” to assure public safety.
In the end I don’t thing $70.00 and hour is enough to deal with the bs. And remember. All kinds of guys are working out of there back yard shops trying to be cheap while this guy try’s to do it the honest and responsible way.
Let’s not forget insurance. Garage keeps liability. That cover you when your shop burns or your broken into. Not for your stuff but your customers. Price a policy for a $1m. It’s probably not to bad. Probably a few hundred a month (but where is this coming from?). Better get some personal property insurance in there too to cover your tools while you can. Not much more (more $$$) And while we are at it, have you considered some employee liability insurance? The most common lawsuits today come from your very own employees that you put first and before you. Now the coverage isn’t 100%. But it may limit some exposer in the event of a suit. Since we are talking about lawsites, let look at your employee hand book that deitails how everything is done in the shop. From the earth quake evacuation rally point to how to use a grinder and what clinic to go to if you get something in your eye. Oh, you do not have one? This will probably void your liability policy leaving you personally wide open to litigation.
I could go on. It’s sickeing.