Question: What is a fair rate of pay for a sewing machine technician? I repair sewing machines for a a quilt shop, and I am not sure if I am fairly paid. The shop owner is new so she is not 100% sure what a fair wage is.
The above question relates directly to sewing machine repair, but is in many ways applicable for every business owner and employee. If you are in business for yourself, compensation or profit consists of what you charge your customers minus any and all the expenses you have. When a business owner hires an employee, their goal is to produce profit through the employees labor. A good rule of thumb is 25%.
When a customer comes to you for repair or some type of service, they only think in terms of getting what they need from you and how much you are going to charge them. As a business owner, however, you must set rates that make sense on the bottom line. First, determine you costs to provide a service and then set a charge that will insure profit.
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.
Once you know your costs and the number of services you will provide, you can determine your costs per service. But do not forget to add your profit or you will go broke. Add say 25% to your per service costs and then add just a bit more to adjust for slow periods.
If the number services vary significantly, it will affect the bottom line. With this in mind it is a good idea to build in a buffer above the expected profit margin to manage slower periods of time.
The principle underlying all employee compensation is the proportional production of revenues. In the sewing machine repair business, for example, a technician should produce four times their pay. If the technician earns $10 per hour, they should consistently produce $40 of revenue for the business per hour.
Now lets take a look at the big picture from the business perspective. We have identified our cost per service of labor and of other expenses. We might calculate it this way: Charge Rate = Msc. Expenses + Labor + Profit + Buffer. Now if we subtract say 30% for profit and buffer, we are left with our maximum allocation for labor and expenses. If expenses rise, the charge rate must rise or the profits will decline.
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.
There are reasonable expectations and unreasonable ones. On average it takes about two to two and a half hours to do a full service on a sewing machine. A novice will take longer, and an expert will take less time.
Do you want top pay? Then you need to make sure you produce top revenues for the business. If you are satisfied with less, relax and produce at a slower pace, but produce. Never fall into the trap of thinking you should get top pay for just showing up.
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 control of your expenses and keep the books balanced. Pay employees what they are worth, and track performance to insure your profits. - 15246
The above question relates directly to sewing machine repair, but is in many ways applicable for every business owner and employee. If you are in business for yourself, compensation or profit consists of what you charge your customers minus any and all the expenses you have. When a business owner hires an employee, their goal is to produce profit through the employees labor. A good rule of thumb is 25%.
When a customer comes to you for repair or some type of service, they only think in terms of getting what they need from you and how much you are going to charge them. As a business owner, however, you must set rates that make sense on the bottom line. First, determine you costs to provide a service and then set a charge that will insure profit.
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.
Once you know your costs and the number of services you will provide, you can determine your costs per service. But do not forget to add your profit or you will go broke. Add say 25% to your per service costs and then add just a bit more to adjust for slow periods.
If the number services vary significantly, it will affect the bottom line. With this in mind it is a good idea to build in a buffer above the expected profit margin to manage slower periods of time.
The principle underlying all employee compensation is the proportional production of revenues. In the sewing machine repair business, for example, a technician should produce four times their pay. If the technician earns $10 per hour, they should consistently produce $40 of revenue for the business per hour.
Now lets take a look at the big picture from the business perspective. We have identified our cost per service of labor and of other expenses. We might calculate it this way: Charge Rate = Msc. Expenses + Labor + Profit + Buffer. Now if we subtract say 30% for profit and buffer, we are left with our maximum allocation for labor and expenses. If expenses rise, the charge rate must rise or the profits will decline.
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.
There are reasonable expectations and unreasonable ones. On average it takes about two to two and a half hours to do a full service on a sewing machine. A novice will take longer, and an expert will take less time.
Do you want top pay? Then you need to make sure you produce top revenues for the business. If you are satisfied with less, relax and produce at a slower pace, but produce. Never fall into the trap of thinking you should get top pay for just showing up.
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 control of your expenses and keep the books balanced. Pay employees what they are worth, and track performance to insure your profits. - 15246
About the Author:
Discover Author 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.
