Labor sales

Ken Diagnostician Seattle, Washington Posted   Latest  

I am curious on my labor sales vs how many billable my guys produce overall should be ?( example : if I collect 75 hours in labor in sales , and I pay my techs 100 hours .) what should that percentage be ? is there a standard?

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Luke Owner/Technician
Lansing , Michigan
Luke Default
 

What you are referring to is their effective labor rate. I don’t know if the industry has a standard in this department. I like to shoot for 80 percent of door rate overall on average. Your highest paid/skilled technicians should be collecting 100 percent, based on the difficulty and your lower rate technicians should be doing canned jobs that effectively lower your labor dollars to billable…

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Ken Diagnostician
Seattle, Washington
Ken Default
 

Thank You ! This did answer my question ,but would also be curious on others opinions .

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Paul Owner/Technician
West Collingswood, New Jersey
Paul Default
 

I'm not sure what is your question.

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Michael Owner/Technician
Montague, New Jersey
Michael Default
 

It depends on a few factors but generally they should be able to give you 100% billable hours vs paid or more. Most really good shops operate at 110-120% efficiency. Look at it on a flat rate scale. If you're paying a tech 8 hours a day and he's producing 6 billable hours, the tech may be inefficient, the shop may be under billing the job or the tech may need more/better training. There could…

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Ken Diagnostician
Seattle, Washington
Ken Default
 

Thank you for your response!

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Nathan Owner/Technician
Hillsboro, Ohio
Nathan Default
 

I set in on a class 5+ years ago and that topic was brought up for discussion I do not remember who the speaker was but I do remember it was in Cincinnati, Ohio. He suggested that top tier shops only hit around %75 and most average %50 efficiency. He also stated that in a perfect world no shop could hit %100. I cannot remember all his reasonings but shop cleaning was one he hit on.

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Michael Owner/Technician
Quakertown, Pennsylvania
Michael Default
 

The calculation to get your effective labor rate slipped me. Anyone know off hand?

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James Owner/Technician
Pike, Pennsylvania
James Default
 

Ken if your getting 75% production I'd say your doing well that percentage would then be calculated into your other cost of doing business to come up with what your hourly rate should be.

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