You job probably does not matter much, when it comes to how much you would like to be paid. Most of us would like more money, but what is fair? What is right? Some argue for a minimum wage: but if the employee does not produce profit, minimum wage means do not hire to a business owner. A technician in a quilt shop recently asked me what was fair pay in her situation.
To answer this question, the employee and business owner must keep in mind the basic employment rationale: Employees are hired to produce profit for their owners. The money paid by customers is income. The money paid to employees and all the other expenses are outgo. The profit of the business consists of what is left over after subtracting the outgo from the income. Employment depends of producing profit. Make sure you pay your employees what they are really worth.
In our Sew And Quilt Stores, we set our repair rates to charge the customer for services rendered. Then all of the expenses associated with servicing the customer must be subtracted. Those expenses will include space rental, supplies, utilities, equipment, other expenses, and of course labor. Unfortunately, calculating all of this can be quite challenging. The owner must also consider how much profit they expect from the service provided to the customer.
For example, the owner should take all costs associated with the service department and divide those costs by the number of services done in a month. Lets say the service area is 5 by 10 or 50 square feet. What is the real cost per month just to have, supply, and provide the service area to perform services? If the monthly costs run $500 and the store does ten services, the costs per service would be $50.
Therefore it is essential to identify all costs and the number of services done per month to determine the real cost to service each machine. If the owner intends to maintain a 25% profit margin in the service department, then it is easy to set your rates accordingly: Costs Per Service + 25% = Rate.
Things are seldom constant, but they do tend to average out over time. The same is true in repair or service businesses. Yes, there are some really busy times, but there are also some very slow times. To compensate for this fluctuation, add a few extra dollars to your charge rate.
Now concerning labor compensation. Generally, a technician should produce at least four times their rate of pay in real store income. For example, the service charge to the customer is $80 The expected rate of pay for that service should be no more than $20.00. If the service is consistently performed in one hour, the pay rate could be close to that $20 figure, however, if the average service takes four hours, the pay rate should be closer to $5.00 per hour ($80 / 4 = $5).
For example, lets say the owner charges $80 per service. The cost of labor is $20.00. The cost of everything else is $40.00. The resultant total cost is about $60. Add 25% for profit (or add $15.00) to produce a charge rate of $75 plus a $5.00 buffer for a final $80 rate.
Lets take a little different approach. One employee is paid $8.00 an hour. He does a good job, but he averages 3 hours per service. If the charge rate is $80, the cost of labor is 3 X $8 + $24. In other words, we are paying the employee $24 per service which calculates to 30% instead of the intended 25% of the charge rate. Is this employee over paid? Yes. Another employee is paid $15 per hour, but completes a service with superior quality in just 45 minutes. The pay rate per service is only $15 or 18% of the revenue. Is he over paid? No. He is well worth the extra pay.
So how long should it take an average technician to do a service? A service should take on average about two hours to two and a half hours. An really strong technician can cut the time in half.
Pay level should be calculatedbased on the revenue generation capabilities of the employee. Top producers should be paid top wages. Low producers should be paid lower wages.
Which employee would you hire? Would you hire one that you pay $8.00 per hour, and that produces one repair every four hours? Or would you hire the one that you pay $15.00 per hour who produces a repair every hour on the hour?
Keep in mind, many business owners go out of business, because they fail to properly calculate their return on investment and real expenses associated with their services.
To answer this question, the employee and business owner must keep in mind the basic employment rationale: Employees are hired to produce profit for their owners. The money paid by customers is income. The money paid to employees and all the other expenses are outgo. The profit of the business consists of what is left over after subtracting the outgo from the income. Employment depends of producing profit. Make sure you pay your employees what they are really worth.
In our Sew And Quilt Stores, we set our repair rates to charge the customer for services rendered. Then all of the expenses associated with servicing the customer must be subtracted. Those expenses will include space rental, supplies, utilities, equipment, other expenses, and of course labor. Unfortunately, calculating all of this can be quite challenging. The owner must also consider how much profit they expect from the service provided to the customer.
For example, the owner should take all costs associated with the service department and divide those costs by the number of services done in a month. Lets say the service area is 5 by 10 or 50 square feet. What is the real cost per month just to have, supply, and provide the service area to perform services? If the monthly costs run $500 and the store does ten services, the costs per service would be $50.
Therefore it is essential to identify all costs and the number of services done per month to determine the real cost to service each machine. If the owner intends to maintain a 25% profit margin in the service department, then it is easy to set your rates accordingly: Costs Per Service + 25% = Rate.
Things are seldom constant, but they do tend to average out over time. The same is true in repair or service businesses. Yes, there are some really busy times, but there are also some very slow times. To compensate for this fluctuation, add a few extra dollars to your charge rate.
Now concerning labor compensation. Generally, a technician should produce at least four times their rate of pay in real store income. For example, the service charge to the customer is $80 The expected rate of pay for that service should be no more than $20.00. If the service is consistently performed in one hour, the pay rate could be close to that $20 figure, however, if the average service takes four hours, the pay rate should be closer to $5.00 per hour ($80 / 4 = $5).
For example, lets say the owner charges $80 per service. The cost of labor is $20.00. The cost of everything else is $40.00. The resultant total cost is about $60. Add 25% for profit (or add $15.00) to produce a charge rate of $75 plus a $5.00 buffer for a final $80 rate.
Lets take a little different approach. One employee is paid $8.00 an hour. He does a good job, but he averages 3 hours per service. If the charge rate is $80, the cost of labor is 3 X $8 + $24. In other words, we are paying the employee $24 per service which calculates to 30% instead of the intended 25% of the charge rate. Is this employee over paid? Yes. Another employee is paid $15 per hour, but completes a service with superior quality in just 45 minutes. The pay rate per service is only $15 or 18% of the revenue. Is he over paid? No. He is well worth the extra pay.
So how long should it take an average technician to do a service? A service should take on average about two hours to two and a half hours. An really strong technician can cut the time in half.
Pay level should be calculatedbased on the revenue generation capabilities of the employee. Top producers should be paid top wages. Low producers should be paid lower wages.
Which employee would you hire? Would you hire one that you pay $8.00 per hour, and that produces one repair every four hours? Or would you hire the one that you pay $15.00 per hour who produces a repair every hour on the hour?
Keep in mind, many business owners go out of business, because they fail to properly calculate their return on investment and real expenses associated with their services.
About the Author:
Learn more with Sewing Machine Technician David Trumble's sewing machine repair instructions in his complete courses that cover the basics and less common issues like instructions instructions for singer 99k sewing machine free. Be sure to download his free beginner's course too.
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