User Power
Value/Post Ratio
246%
- Jun 29, 2011
- 1,811
- 4,464
Think about it backwards.
You have to travel an unknown distance. You have to pay for the fuel to get there and depreciation of your vehicle. If your average cost for these items is £5, then charging £5 for the service is not profitable. If you charge £10 (and don't use any assets like oil), your profit £5. If it takes you one hour to do this service, you make £5 per hour. Not great.
But you will likely use product (oil, washer fluid, coolant, etc.) which also cost you money. If the average trip costs you £5 is fuel and another £5 in product, you would need to charge £10 to make nothing. And none of this takes into account your fixed expenses (phone, app development, website hosting, etc.).
The obvious answer to me is change the service to mobile oil change and all the other stuff as a free service. Make oil change the MINIMUM rather than an upgrade. This way there is some wiggle room in your pricing.
If an oil change normally costs £30 (I'm guessing here), I'd bet many people would pay more (all other things being equal) to have it done at their house/work simply because it can be done without your customers taking time away from their daily life to have it done. Let's say you can charge £35 for this service, and your average cost of fuel and materials is £15, you make £20 per hour. That's great.
But here's where it become fastlane.
You grow the customer base in a specific location (keep it tight). Hire someone and pay them £10 per oil change and cover their expenses (£5 for fuel). Now your costs are £20 (£10 labor, £5 product, £5 fuel) and your revenue is £35. Keep growing the customer case and keep hiring people to change the oil. Then one day you wake up with 1,000 appointments per day (£35,000 in revenue) and pay 100 employees to do the oil changes for you. Each employee makes £100 per day, you profit £15,000 per day without doing any oil changes yourself, and your customers get their oil changed without wasting an hour waiting in a lobby.
Work the numbers, see how much you need to charge, and offer to change oil for that price. See how people respond, and keep doing it if it makes sense.
P.S. Don't build an app until you need to. No need for an app when you've got eight customers.
You have to travel an unknown distance. You have to pay for the fuel to get there and depreciation of your vehicle. If your average cost for these items is £5, then charging £5 for the service is not profitable. If you charge £10 (and don't use any assets like oil), your profit £5. If it takes you one hour to do this service, you make £5 per hour. Not great.
But you will likely use product (oil, washer fluid, coolant, etc.) which also cost you money. If the average trip costs you £5 is fuel and another £5 in product, you would need to charge £10 to make nothing. And none of this takes into account your fixed expenses (phone, app development, website hosting, etc.).
The obvious answer to me is change the service to mobile oil change and all the other stuff as a free service. Make oil change the MINIMUM rather than an upgrade. This way there is some wiggle room in your pricing.
If an oil change normally costs £30 (I'm guessing here), I'd bet many people would pay more (all other things being equal) to have it done at their house/work simply because it can be done without your customers taking time away from their daily life to have it done. Let's say you can charge £35 for this service, and your average cost of fuel and materials is £15, you make £20 per hour. That's great.
But here's where it become fastlane.
You grow the customer base in a specific location (keep it tight). Hire someone and pay them £10 per oil change and cover their expenses (£5 for fuel). Now your costs are £20 (£10 labor, £5 product, £5 fuel) and your revenue is £35. Keep growing the customer case and keep hiring people to change the oil. Then one day you wake up with 1,000 appointments per day (£35,000 in revenue) and pay 100 employees to do the oil changes for you. Each employee makes £100 per day, you profit £15,000 per day without doing any oil changes yourself, and your customers get their oil changed without wasting an hour waiting in a lobby.
Work the numbers, see how much you need to charge, and offer to change oil for that price. See how people respond, and keep doing it if it makes sense.
P.S. Don't build an app until you need to. No need for an app when you've got eight customers.
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