Raised his Shop Rate!!!!!!!!!!

I stopped in at Rolling Acres Tractor Repair out side Dycusburg Ky. today and noticed he raised his shop rate to $22.50 per hour and his farm calls to $30.00 trip fee! I asked him why he raised his shop rate he told me it is going to cost a lot more for heat and lights this winter!
But he is running a few special labor package specials on overhauls and clutches and is selling his parts at cost. So I guess I can live with him raising the rate $2.50 per hour!!!!!!!!!!!!!

Local repair shop by me is chargeing 70.00/hr.

Must be a socialist, working for free like that.

If the shop rate increase is too much, have you local tractor dealer fix your tractor.

Ha HA. I thought he was going to say $120. or $130 an hour.

Has to pay for his free insurance some how

Obviously uninsured and not paying taxes. $22.50 an hour wouldn't even pay the taxes and insurance at my shop. I can see trying to help people out, but there is no sense in working for nothing.

did'nt think there was such cheap labour rates out there anymore,he better add another 50.00 to that.

The poor guy won't have to worry about expanding his business. He can't afford to hire any employees at those shop rates. They sound about right for the 1980's instead of 2013.

You're lucky to find one around here for less than $100,..more likely $120 +

Only $2.50 an hour, give the man a break.

When I raised mine back in April, I went back up another $10 to $65 and hour, and raised my mileage from $1 to $1.50 per mile. Thing is I had dropped it from $84 an hour a few years ago to $55 to help both me, and most of my customers, stay in business when things got really bad. That lasted until I got tired of struggling to make ends meet myself while watching others drive around in new pickups, take week long vacations, etc, etc....all the while fussing about not making any money and how they were having trouble making ends meet. Not to mention putting money out of my pocket to buy parts for their machine and then having to wait two or three months to get paid while I struggled to find the money to keep my own equipment running.....so I could keep EVERYONE else's equipment running. Without that 'extra' money in the bank it's all but impossible to stay in business.

It might actually pay to take all my hired out repair work to Kentucky!

I think maybe the OP was kidding about the LOW shop rate. I had a hyd. cylinder fixed and the shop rate was $142/hr. The machine shop rate was $152/hr.!!! I also had to pay about $35 for shop supplies on top of that.

Labor rates and parts mark up are a fine line . You don't want to be too high and drive business away,BUT ,you have to make enough to keep the doors open and make a profit,,it's not a dirty word . There are a few shops around here living in the past and charging minimal rates. One or two close every year, New one springs up gonna set the world on fire with cheap parts and labor . Oh yea,,they are busy alright . After a year of stuggling to pay bills They are gone. Usually those shops have no insurance , pay no taxes. Eventually everything catches up with them. My buddy closed his shop after 40 years in business. Pretty sad to see. Tried to help him out , get him up to speed on newer stuff, did some diagnois on problem cars. He would not invest in training or tooling. He claimed he could not afford to. Well when his labor rate remained 42.50 and only 10% parts , he was bound to go broke . Of course he was busy for years. Cheapskate customers flocked to him . As his quality of service declined over the years those customers that were so loyal because of his cheap rates bailed the sinking ship .
I too have been there done that . Started out as a mechanic that wanted to" own my own place ".
I had no business training to start with . After few boom years of dealing with the Vampires that feed off you and cheap rates I was ready to call it quits ,find a job . Talked with some long time shop owners , got some training in running the office. I was able to turn around the sinking ship. Not where I want to be by a long shot yet , but getting there . I am no longer afraid to raise my labor rates or parts margin . This is because I know what they need to be to pay my overhead, my help, and me . I am no longer afraid to turn work away . Fire some customers that you can simply not make happy no matter what you do for them , or the price shopping Vampires . I'm still cheaper than the dealers around here,,but not by much . My rant for the day ,,thank you !

Dad and Granddad ran a business for 50 years. They charged probably the lowest labor rate in town, and made a 20% gross markup on their parts. Sure, they kept the lights on and made something of a living from the business...but after 50 years, it seems I inherited mostly used-up equipment and worn-out tools, and a building that needs major repairs. They may have had a 5-year plan, but they didn't have a 50-year plan.

Grand-dad preferred to work in the shop to running the office, and while Dad tried to keep things profitable, he spent most of his time "assisting" in the shop, or behind the parts counter, or chasing parts and soliciting more business. They'd have been ahead to have charged a little more, and run the office/sales end of things...and to have hired some trustworthy mechanics [as they did in the '50's, when the business was booming] and let them do the "dirty work."

That's almost cheaper than doing it yourself! Here in NE Iowa labor rates run from $45-$95. That's the repair shops to the big dealerships. Of course the top dollar is the green store. The only one higher than that is the computer repair place that is $100 an hour on service calls!

No you heard the truth his rate is $22.50 and he has people from southern Ind Ky. and Tn even one from Sikeston Mo bring him tractors to work on!
He charged me $210.00 labor to replce my M clutch. Good job!

I agree with the people saying that high shop rates aren't really out of line. Figure out what it costs to run a shop, and $70 sounds pretty reasonable. That said, I think some shops should sharpen their pencils a little bit. There's an AGCO dealer here that charges $54/hour. They also put up a new machine shop and charge $56/hour for that. It's an up-to-date place with good tooling, etc. He would have insurance, etc. I assume he's just really good at math and has a really sharp pencil.

Shop rates can vary, even at the same shop. These rates come from a while back but a gunsmith back home posted this sign over his bench:
Basic Shop Rate $10.00/hr
If you watch........$15.00/hr
If you help...........$20.00/hr
If you worked on it before you brought
it here..................$30.00/hr

Well said, much hard earned wisdom in that paragraph ! I have walked this walk also.

He may be good at math, and have a sharp pencil both, but shop rate depends on a lot of things. One of the most important is the area he"s in. For instance if I moved to SC I could charge a little less simply because fuel is cheaper, land prices are cheaper, taxes are lower, etc. In other words the basic overhead costs are less so you can charge less. Right along with that are other factors like how many employees he has and how much he pays them. Think about it like this. I work alone and charge $65 an hour to insure the bills get paid. Now if I had one more guy working for me I could, theoretically, charge $55 per hour and still make the same profit to pay the bills. I could do this because while I am working and making $55, I"ve got an employee also working and making $55 for me. Out of his $55 I pay him $25 an hour, cover his benefits for another $20 per hour, and wind up with $10 left over going in my pocket. Ultimately that makes me bringing in a total of $65 an hour -vs- the $65 I was charging just for myself. The problem with this is that when my employee is standing around with no work to do I"ve still got to pay him his $25 an hour, plus benefits so, basically I"m loosing $45 an hour that I"ve got to recoupe somehow. The only way to do this is to charge the regular $65 an hour all the time so there is "extra" money, to be put in reserve, to cover the times when work isn"t coming in.

Ultimately we all charge what we need to to stay in business in the area we are and under the conditions conditions we have to work under.

I know what you're saying, but in this case, every other machinery dealer is charging at least $85-100/hour. He doesn't have to be so low, he simply chooses to be that low. He's cheap in other places to. His AGCO branded oil is only $69.95, which compares to anything available from TSC, etc. John Deere, Case IH, Kubota are all $84+ He doesn't have to charge those prices, so why he does is really beyond me. I know he makes money, because he continues to update the place and keep it up.

if he is good with electrical, hydraulics and general repair he ought to be at $50 minimum, dealers are over $100

(quoted from post at 10:15:35 11/05/13) No you heard the truth his rate is $22.50 and he has people from southern Ind Ky. and Tn even one from Sikeston Mo bring him tractors to work on!
He charged me $210.00 labor to replce my M clutch. Good job!

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Flat rate for an M clutch with Lift-All pump is 1.8 hours. My charge would have been $121.00 for labor at $65.00 per hour. Additional time would be added for anything beyond just replacing the clutch.

I seen that M clutch job it included pressure washing the tractor 10 years of dirt and oil, taking the flywheel off and had it resurfaced repairing the gas line, replacing the end on the battery cable, replacing the starter drive, cleaning the gas bowl, repairing the hood latch, repairing alternator wiring,repairing a bad hydraulic leak. The guy took the old fellow more then a clutch job. Could or would you do all that in your flat rate 1.8 hrs if so direct me to your shop and I will have you clutch my 400!

(quoted from post at 02:53:34 11/07/13) I seen that M clutch job it included pressure washing the tractor 10 years of dirt and oil, taking the flywheel off and had it resurfaced repairing the gas line, replacing the end on the battery cable, replacing the starter drive, cleaning the gas bowl, repairing the hood latch, repairing alternator wiring,repairing a bad hydraulic leak. The guy took the old fellow more then a clutch job. Could or would you do all that in your flat rate 1.8 hrs if so direct me to your shop and I will have you clutch my 400!

Click to expand...

Flat rate for an M clutch with Lift-All pump is 1.8 hours. My charge would have been $121.00 for labor at $65.00 per hour. [b:fbb6292092][i:fbb6292092][u:fbb6292092]Additional time would be added for anything beyond just replacing the clutch[/u:fbb6292092][/i:fbb6292092][/b:fbb6292092].

(reply to post at 18:34:37 11/04/13)

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an anyone provide any contact information for this tractor shop???