Budgeting can become a complex process if the workshop does not have the necessary tools to calculate it. We would like to point out a series of keys that the workshop must take into account when presenting an estimate to the customer.
- The budget should be prepared on a cost/hour basis. Therefore, all the workshop’s costs (professional staff, purchase of parts and spares, marketing, equipment, etc.) must be divided by the number of operating hours.
- Manpower must be charged per hour of work, depending on the type of workshop, the vehicles being repaired or the makes of car being worked on. In this respect, it is advisable to have a fee schedule that includes hourly rates. In Spain, for example, the average price is 40 euros per hour, although it can vary considerably (from 25-30 euros per hour in multibrand workshops to 90 euros in BMW or Porsche garages).
- In addition to labour costs, there are the costs of spare parts for repairs and certain additional costs such as express deliveries. The customer must be aware of the hourly rate in these cases, and if the repair workshop does not meet the agreed terms and conditions this supplement cannot be applied.
- Excess costs. In the event that the customer fails to collect the vehicle on the agreed day, the company may also charge a surcharge for the useful space occupied by the vehicle in the workshop.
- Discounts, promotions and offers. They must not imply a pointless and automatic reduction in the price of the service. At the time of pick-up, it is necessary to check the terms and conditions of the discounts and whether the customer is entitled to them.
- Profit margin. The expected cost/hour of the workshop should be compared with the actual cost/hour to establish the profit margin.
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