labor

[chadrpalmer]

I know this is a very broad question, but does anyone want to venture a guess? In a flex-serve operation, currently averaging 3000 cars a month (and headed up) what percentage of revenue would you expect labor to be? I define labor as absolutely everyone on the payroll, GM, supervisors, cashiers, line workers, and greeters.

 

[robert roman]

Seven people are usually needed to open the doors of a full-service wash. This includes greeter, vacuum/drive-on/prep, cashier, drive-off, customer service rep, finisher and site manager (working). Based on a ten-hour day and average hourly wage for each position, labor would be $682.

Only five people are needed to open the doors of flex-serve. This includes greeter, tunnel attendant, two finishers and site manager (working). Labor for this gang would be $482.

$482 / $682 = 70.7%

Next, apply some operations. In this case, 115 cars times $17 average sales equal revenue of $1,962.

Full-service = $682 / $1,962 = 35%

Flex-serve = $482 / $1,962 = 25%

This gives an indication of the difference between full-service and flex-serve labor models.

Extrapolating the general assumptions beyond this point becomes difficult because flex-serve adds units of labor at a lower rate than full-service as volume increases.

For example, on a 225 car day, full-service labor might be 37.5% of revenue whereas flex-serve labor might be 22.5% of revenue.

 

[buda]

Based on your inclusions we have always calculated total labor in a traditional full service car wash at about 40% (for a good operator) and as high as 50% (for a bad operator) of gross sales for labor.

In a Flex Serve where you are basically eliminating drive on/drive off labor you would have to average out what those people would cost you monthly to determine your reduction in labor costs.

At 3,000 cars a month your full service and/or flex service labor would not be as high I would suspect.

If you chose, rather than a Flex Serve the EXPRESS PLUS Concept of an exterior only car wash with an Express Detail operation your labor would be far less

Regards
Bud Abraham

 

[rph9168]

Regardless of the format you use there are two factors critical in the effective management of labor - volume and sales. There is a basic crew you need to have on whether you do 1 car or 100 cars a day. If you are not able to increase sales dollars you will also experience a negative effect on the percentage of labor against the gross. I managed an extremely busy full service wash years ago where labor sometimes was as low as 20% or even slightly less. At times we couldn't hire effort people to run effectively. On the other hand there is a new full service in my area today that probably has 40%+ on labor due to low volume and sluggish sales.

I am not sure there is really a rule of thumb but if you can put out a quality car with full or flex format I would think you should be more or less in the 30% range. With an express exterior I would think you should be closer to 20%. Keep in mind that while the express number is much lower the gross is also lower than with a full or flex format so the gross profit would also be less.

 

[smokun]

The Answer: It Depends...

The mistake that most operators (and yes experts, too) make in explaining Flex-Serve and its labor dynamic is to view it as analogous to full-service... when it is not. It more closely resembles a combination of an exterior wash and an optional hands-on detailing operation.

The labor required to operate an exterior wash can be a single person; more by choice.

The labor required to operate a hands-on detailing operation can range from one or two; Flex recommends two, with expansion to another team of 2... at the prerogative of the operator. Ramping up or down is determined by several thing: demand, availability, and merit. Viewing labor the same way that a full-service operator does is wrong because full-service demands a minimum staff to operate and perform fixed tasks under variable conditions. Flex can process exterior washes with one person, and run an effective hands-on detailing option with another one or two.

The national percentage of labor in Flex-Serve operations ranges from 16% to 28%. Poorly run hybrid flex-serves require more labor mostly due to the owners' inability to discipline the process... or to devalue the products & services. Bottom-Line: It's not "what you make", but rather "what you keep" that determines the true NET.

Ron is right on target with his focus on sales. That means that high gross profit through quality service sales can shift cost-per-sale percentages into outstanding values that translate into great net profit.

Hence, a properly operated Flex can generate more net profit and retain a powerful competitive edge in most any marketplace because of the platform's tremendous adaptability that enables an operator to react and adjust very, very quickly... to weather changes, dramatic market fluctuation, and labor availability. Operational discipline is the essential requirement for optimized profits, and flexibility provides the ability to better manage the marketplace supply and demand.