Pricing
Pricing questions, answered.
What to charge, when to raise, and how to say the number out loud.
How much should I charge?
Enough to cover all your costs, pay yourself a real wage, and have 15 to 20 percent left over. If your current price doesn't do that, it's too low.
How often should I raise prices?
Every year, automatically, at least three percent. More if costs jumped.
How do I price a service I've never offered before?
Cost plus a margin you'd be embarrassed to share, then adjust after ten jobs. New services should be more profitable than old ones, not less.
Should I charge hourly or flat rate?
Flat rate whenever possible. It rewards you for being fast and protects you from explaining every minute.
Should I offer financing to customers?
If your average ticket is over $1,500, yes. It raises average ticket and close rate enough to cover the fee.
Should I charge a deposit?
Yes. On anything material-heavy or scheduled out more than two weeks. 25 to 50 percent, non-refundable inside a window.
What if my competitor is cheaper than me?
Let them be. Sell the difference, not the same thing for less.
Should I put prices on my website?
Starting at prices, yes. Full price lists, only if you sell commodities. The middle, 'starting at $X, typical $Y', wins for most trades.
How do I handle scope creep on a job?
Stop work. Quote the change in writing. Get a yes before you continue.
Should I charge more for emergency or after-hours work?
Yes. 1.5x to 2x your normal rate, no apology. Your nights and weekends are not normal pricing.
Should I offer tiered or package pricing?
Yes. Three options, with the middle one priced as the obvious answer. Customers pick the middle more than half the time.
How do I justify charging more than competitors?
Stop justifying. Show the difference. The customer who needs justification isn't your customer.
Should I grandfather long-time customers when I raise prices?
For a defined window, yes. Forever, no. 'You're locked in at the old rate through year-end' is generous. 'Forever' is a tax on your future.
Should I charge for travel time?
Bake it into your minimum or add a clearly stated trip fee. Don't pretend travel is free. You're paying for it whether the customer is or not.
Should I have a service minimum?
Yes. Set it at the smallest job that's actually profitable for you to leave the shop. Below that, you lose money even when you 'win.'
How should I price recurring or subscription service?
Annual price divided into monthly payments, billed automatically, with a real discount vs one-off. Predictable revenue is worth a real number off.
How do I raise my shop's labor rate without losing customers?
Raise it on a set date, put it on the wall and the invoice, and stop apologizing for it. The customers who leave over ten or fifteen dollars an hour were not paying for your overhead anyway.
How do I charge a diagnostic fee and defend it when customers push back?
Charge it every time, state it before you touch the car, and apply it toward the repair if they book with you. It pays for the time your best tech spends thinking, not turning wrenches.
Can I charge a shop supplies or hazmat fee, and how much?
Yes, and most customers accept a small, clearly labeled fee without pushback because it's standard in the industry. Keep it a flat, reasonable percentage or dollar amount, and never make it look padded.
How much deposit should I take on a diesel or performance build?
Fifty percent up front, nonrefundable once parts are ordered, with progress payments tied to milestones on anything over a few thousand dollars. Anything less and you're financing someone else's project car with your own cash flow.
How do I quote a custom build that always scope-creeps past the original number?
Quote the build in phases with a written spec sheet, and price every change beyond that spec as a separate change order before you touch it. The scope creep isn't the customer's fault if you never wrote down what was actually included.
Can I charge for R&D and diagnostic time on a one-off build with no established procedure?
Yes, and you should bill it as its own line item, separate from install labor. Figuring out how to fab a mount that doesn't exist yet or chasing a custom tune issue with no baseline is real shop time, not something you eat because there's no flat-rate number for it.
How should I price dyno time and tuning sessions?
Charge by the hour or by the pull, not a flat 'tune' fee, and separate dyno rental from tuner labor if they're different costs to you. A stock combination might tune in one hour, a custom one can eat an entire afternoon.
Should I charge a teardown fee if a customer backs out mid-build?
Yes, bill actual labor hours already performed plus a documented restocking or return cost on any parts already ordered. You don't work for free because someone changed their mind after you already had the engine apart.
How much should I mark up special-order performance and diesel parts?
Enough to cover the freight, the returns risk, and the capital tied up while you wait on backordered parts, typically 25 to 50 percent over your cost depending on how obscure the part is. Treating special-order performance parts like a stock brake pad markup leaves real money on the table.
Should I mark up sublet machine work, and how much?
Yes, 15 to 25 percent over what the machine shop charges you, because you're managing the vendor, the timeline, and the quality risk on the customer's behalf. Passing sublet costs through at zero markup means you're doing project management for free.
What should I charge for a service call?
Charge enough to cover the truck, the tech, and the windshield time, not just the drive. Most owner-operated shops land between $79 and $149 for a diagnostic trip, and the fee should apply toward the repair if the customer books it.
Should I do flat rate pricing or time and materials?
Flat rate for anything you've done a hundred times. Time and materials only for genuinely open-ended troubleshooting where you can't scope the job in advance.
How do I figure out my hourly rate for HVAC, plumbing, or electrical work?
Add up truck cost, tech pay burdened, and overhead per billable hour, then add your target profit. Most owner-operators are underpriced because they never actually run this math.
Is a maintenance membership plan worth it, and how do I price it?
Yes, if you price it to cover the visit cost and treat the real value as the repair pipeline it feeds, not the membership fee itself.
How should I handle after hours and emergency pricing?
Charge a clear premium, quote it before you roll, and never let a tech negotiate it on the doorstep at 11pm.
How do I price a change order and get it signed before work starts?
Price it like a mini bid, cost plus your normal markup, and get a signature before a single hour goes into it. No signature, no work.
What markup and margin should I carry on a remodel?
Most remodelers run 20 to 35 percent markup on cost, which lands around 17 to 26 percent margin. Know the difference or you will underprice every job.
How do I raise prices across the board without it feeling like a scramble?
Pick a date, calculate the number from your actual cost increases, announce it once in writing, and apply it to everyone the same way. A clean, universal increase reads as confidence. A quiet, selective one reads as something to hide.
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