Monday, 15 February 2016

How much a bicycle mechanic makes per year?

The BIG question - Discussing mechanics pay-cheque

How much can a bicycle mechanic make per year or charges per hour? This will depend on many factors, like; your time served, skill level, knowledge, your reputation and your location.

Question: A job that comes to you, that 2 other mechanics have looked at and could not fix. But you sorted the problem out in less then 10 minutes while the customer waited. How much would you charge for knowing what to do?

People may think mechanics is not a skilled job or don't understand what's really involved. If you want to embark on this career and you decide that working in a bike shop is for you, especially at a young age, it will give you good mechanical skills and knowledge while you are on a low wage, that you can then use your time served to start your own bike business. Providing you have managed to save a small nest egg to get your business off the ground or on the road as a mobile mechanic.
I talk with many people who offer a great services and that are a cut above the competition, but they are failing to make any money. These people who stay stuck in a cycle of undercharging for their work. They won’t budge out this trap, no matter how many people tell them that they’re not charging enough (even their own paying clients).

“If you’re making £35,000 or less in your business, it’s not a business, it’s a job - Nell Merlino"

I was a little offended with those words. But I’ve come to see the validity in that message (and I realise that I was in denial about money at the time, not charging enough for my time and skills).
If you were working for someone else, and had to work for long hours a day to make ends meet and still generated less than £35,000, you’d say something would have to change, right?
  • Folks who constantly undercharge also tend to work very long hours each day and don’t stop.
  • That drive to keep working without stop often stems from a lack of confidence that what you deliver is really good enough.
  • What you offer is different from your competitors, but do you know how, exactly?
  • Are you finding you are spending too much time with a customer then what you originally anticipated? You thought it would only take an hour but you was at the job for over two hours and only charged an hour of your time, plus you had to travel to the customer.  
  • If you are becoming stressed from this, then the customer will see this and is not good for business as the customer will not recommend your services. (Don't want to become known as the grumpy bike shop owner)
It's how you can offer your service and give your customer a sense he has had value in the service you offer and you show that you actually take care of his bike(s)

Every customer wants your time, focus, patience as well as a quality job. By charging more you become less stressed and then you can focus on their real needs, giving more time and customer support. Amazing work is better then doing a lot of work!

If you are not really sure what your work is worth, and what it could command. Then contact me today. and I will show you. 

The mechanic working in the bike shop: 5 & 1/2 days a week, depending on skill level and time served is between £13k to £19k and the head mechanic is found to be below the national average of £26k. It can be seen as being paid shop assistants pay and not a skilled person's pay.

The Mobile Bicycle mechanic: While it might not be regarded as a highly skilled job, it does take a certain type of person to be a bicycle mechanic, along with time and money to build your business. And if done right is very profitable.
Your weekly work hours may be less than a shop, at actually fixing bikes, as you will also have non-productive time. Such as time travelling, booking in customers and looking up parts. Its more about having multi skills and not multitasking.
Running your own bike business, you will need to charge more then triple to what your employer in the bike shop is paying you per hour.  

The Spanner In The Works: Depending on your work area, your business setup, your brand name, your customer care, your mechanical skill level, your skills of running a business, running costs and how you manage money, will all have an impact on how much you can earn. If you feel you are worth it and work hard, then sky is the limit.

A mechanic in and around London and affluent areas across the UK, rather than remote areas of Scotland can charge more per hour. People living in affluent areas are higher earners, have disposable income, ride more expensive bicycles known as "high end" and also clock up the mileage, resulting in more servicing and tune-ups.

"You need to cover business running costs and make a living".

Working out what to charge per hour

The figures are set as being prudent, to allow any hidden costs or unforeseen circumstances. Once you are established, have the knowledge and conference you will earn a lot more. Nothing is guaranteed and you could make more or less then these figures show or even lose money.

This is only an example and will depend how you intend to run your business. This can be discussed in more detail in a meeting or Skype chat.
If you want the freedom of being your own boss but with the support of a national network, working in one of the fastest growing leisure sectors please do get in touch with Martin Wilkins at for an information brochure.
Put your business figures in below to see how much to charge per hour.

First work out your yearly overheads for running your business:

Vehicle maintenance costs
Vehicle insurance
Business insurance
Bank charges
Office equipment

Your Total = £      

(You should also think about cash flow, buying stock and quite times)

For example, you want an annual income of £30,000 and consider 1350 chargeable hours realistic (30 hours a week for 45 weeks of the year, taking into account holidays and time off sick). £30,000 divided by 1350 = £22.00   
(Bike mechanics tend to work 6 days a week, you could say this would be 36 hours a week)

If overheads are £20,000, divide that by 1350 to give the amount you need to charge to recover in a year (£14.81).

Now add in a margin for the risk of being in business of say £7,000 (again, divide by 1350 hours, which equals (£5.19). Note: Increase this amount if you also want to increase your stock level by reinvesting.

So to cover your £30,000 income, £20,000 overheads and £7,000 profit you’ll need to charge £42.00 an hour (£22.00 + £14.81 + £5.19).
Still feasible? Compare this with your direct competition.

Once you’re satisfied that you can set prices that meet market expectations and give you a return on your investment, calculate if you can realistically meet ongoing financial obligations and commitments to ensure that everything runs smoothly.

Hourly rate for mobile mechanic across the UK varies widely according to location, demand, client and service offered. With the average hourly rate being £40.00. Min £30.00 and £55.00 upper level.

"You will need to have the courage after around 6 months of trading, to review your business and put your prices up to the going rate in balance with the value of service you now offering"

As a service-based business, even though people might be paying you for your ideas, expertise or specialist knowledge, essentially you’re selling your time. Given that you (and any staff) will need to take holidays and spend time on administration, business planning and other non-chargeable tasks, avoid basing your calculations on 40 hours of chargeable time every week for 52 weeks every year. This is both unrealistic and unsustainable.

"Be realistic about how many hours worked each week will actually be chargeable".

Note: There is a mark-up on selling parts*. This profit can be used to cover hidden costs, stock of parts and Tax. But you need to have a good stock control and know what to stock!
With experience and demand, you can expect to charge more. Also work out what you will pay tax per year and divide by 12. And deposit this amount each month in to a savings account such as a cash ISA. You can also do this for your business insurance and then you will have the money each year ready to pay out. Once your business is established, you can pay yourself a monthly salary in to your Private Bank account and keep a good cash flow in your business account.

"Running costs is the second most important factor behind pricing. At the start, it's very unlikely that your costs will be low".

I am often asked how many jobs do you need to do a day, as a mobile mechanic? One if it’s the right job! It is a good question for anyone looking at starting a business plan, but needs to be looked at in more detail:

Whilst a good majority of what type of work you will do is unique to the individual requirements of each repair/customer you see. (Every job and every customer is different and your prices and service will reflect this)
Getting your pricing right, is one of the biggest factors in starting and running any business. It's all too easy to devalue yourself and your services. You should have an hourly rate and a price menu that should be used as a guide to help you charge accordingly.  

Gauge your pricing by what your customer's say: You are getting tips and the customers says you are too cheap. Or if you have a customers saying that you are charging too much, then you know to keep below that higher price. You can always bring the price down, but it's hard to charge more after. You don't need to offer discount on everything.

"You should not give quotes (or even vague estimations) without seeing the bike in question".
Example based on a mobile mechanic after trading for 6 months or more:
The basic service carried out is £65.00 plus any extra work and parts.  Depending on type of bike and use (You may fit tyres to a service, but don't charge extra for fitting. But any extra work to the service becomes chargeable as extra labour)
Parts will have a minimum mark-up* of 30% Work shop parts such as chains, cassettes, brakes, cables, tyres and tubes can be brought in bulk and give you a better margin. It used to be fair to say in the bike trade that parts did have a 50% mark-up, but now it would be more like 40 - 50% on bulk buying items. That a minimum profit of £40 for every £100 worth of parts and accessories you sell. That may sound good, but you do need first to know what to stock, have the investment to buy and even when you have been in business for a while you still need to replace stock.

You would need to sell around £25,000.00 of stock each year to make £10,000.00 profit

You will also need to consider a day rate per mechanic for event support, fleet and corporate work.
Typically, £280 - £350 per mechanic.

"Consumers are used to cheap products but not cheap services. If customers value your product more than that of your competitors, they may pay more. However, in order to charge higher prices, you have to know how to sell the value you're offering".

Service & Repair times:
There is no book times to use as a guide, you need to have some flexibility, with the different types, styles of bicycles. Using your guide and hourly rate, should cover your running costs. Make sure you are charging for your time, including any diagnostic work, any cleaning to make inspections, time undoing rusty/corroded parts, time with customer making any last minute tweaks and adjustments.
A basic service takes an hour to complete. (this will depend largely on the bike and its usage). Here at Cycle Tech UK, to help new business owners and to show the customer what exactly has been carried out in a service and including a report, we work to a service check sheet.
As a guide once you have worked out your hourly rate you can work out your time for any extra work carried out. If you have carried out a service and fit extra parts, you may do the extra work at a slightly lower rate, as you will also have a profit margin on all parts. Where the customer supplier's parts, then you may increase your labour charge slightly. (30% value of the parts you are fitting is a good guide)
So for example if you fit two brake cables and re-tape handle bars during a service you need to charge for your time, bearing in mind that part of the service is adjusting brakes and the bike is already in the work-stand. You can do this in two ways, charge slightly more for the parts to cover your time or calculate the extra time. If the extra work is an extra 1/2 hour, times your hourly rate by .50 (An hour becomes 100th so 45 minutes = .75) 

"You need to have a minimum charge of say £20.00, to cover your time".

As a mobile mechanic from time to time we will arrive at a job and the bike is not economically worth repairing or it's a BSO.
A good mechanic will give the customer a report and advice, or even sell them a new bike

If you also have to travel out of your way you can also add a travel charge, I find customers are happy to pay, as it saves then the hassle and time taken their bike to a shop. 

Doing 4 services a day fitting extra parts such as tyres, brake/gear cables, chain and cassettes. This will give you an average turnover of £300.00 a day. Of course jobs day to day will vary, but over the year it will average out.
High end bikes have more expensive parts; means a bigger margin.

"Know how and when to raise or lower prices. Raise prices when you offer, and can sell, more value; when your own costs have increased; or when you see higher demand and have the flexibility to do so".

There will be days where you service more bicycles or the bicycle needs an overhaul service and more parts are required and you need to order to complete. These jobs are called work in progress.
So you will need a cash-flow to cover these jobs until they are completed and then invoiced.

I don’t recommend offering credit, all jobs should be paid on completion and any specially ordered parts should be paid for at time of ordering.

"It's best to be known for doing a good job and charging the correct amount then being known for doing a cheap job!"
Because you are worth it.
Those who contact me or I meet to talk about the possibility of them starting their own mobile bike business that they often say; They see a gap in the market with offering a better service or they feel they can do a better job then what they have seen at their local bike shop.

Customers are often happy to pay more to have someone do a good job and take care with their bike. Rather than their bike taken into a broom cupboard and told to come back later or we will call when its ready.
The professional mobile mechanic is not only convenient by visiting the customer, but also offers a face to face service, where the customer feels they are receiving good value. And it's not unusual for the professional mobile mechanic to charge more per hour.
"Good mechanics take their time with customer’s bikes, they do not rush procedures and they make sure to preform each step carefully. That means they will not be able to handle large number of customers". Continue reading

What others say: 

How much should you pay for a bike repair in a London bike shop?  24/02/2010
The bike shop assistant will then test out the bike, confirm it doesn’t work and tell you how much it costs.
At this point you either just go yes, hand it over and walk home in a miserable state or go home and think about it. In a miserable state.
How do you know if what they have quoted you is a good price?
Continue Reading: London Cyclist

What do you charge per hour or what are you willing to pay for someone to come to you and fix your bicycle at your home?

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