Are you getting the most from your workshop?

According to the results of our Workshop Survey, the majority of IBDs say workshop turnover is increasing and on average contributes 25 - 30% of total shop turnover.


Our survey also showed that workshop turnover is limited by space and pricing. 40% of dealers say that space is their biggest challenge, which means if you can't get more bikes in the workshop your pricing (and profitability) becomes really important.

Here's a simple calculation to work out the true cost of workshop labour to your business and therefore what you could (or should) be charging for your services.

• Average bike technician salary = £14,000
• National insurance @ approx 10% = £15,400
• Divided by approx 230 working days per year = £66.95 per day
• Based on 6 hours "proper" work a day the hourly cost to the IBD is = £11.15
(This doesn't take into account a share of the overheads as these vary.)

• Double up on the hourly cost to aim for a profit = £22.30 per hour + vat (£26.20)

• Gross profit on £200 workshop turnover in a day (less vat) = £103.26 (65%)

It is interesting to note that IBDs don't consider competition as a major challenge to their workshops, which means there's every chance better pricing could reap rewards.

Halfords Bikehut in Brighton charges £39.99 for what it terms a Level One service, which includes replacing gear cables and truing wheels. IBDs say their average price for a "basic service" is £15 - £25. Bikehut Brighton charges £79.99 for what it terms a Level Two service, which incorporates a complete strip-down and re-build, whilst IBDs say their average price for a full service is £48.40.

Our survey found 91% of IBDs offer free servicing with every new bike sale. In this context it's very important to make sure you are not devaluing your technical services or even losing money as a result of this giveaway.
Thanks to Paul @ Bicycle Chain for his assistance.

Storage & Disposal

One of our most common enquiries relates to how dealers should charge for storage and dispose of unwanted bikes. With space at a premium it is clearly important to ensure you have proper processes in place to manage the storage and disposal of bikes.

Your storage and disposal terms should be displayed to ensure the customer has seen them. The best place to do this is on the workshop job repair form, which should also include the customer's signature. This means the customer has read and agreed to the terms, forming a contract with you in the event you must impose storage charges or dispose of the bike. Remember you cannot impose storage charges at a later date if it was not part of the initial contract. ACT workshop repair forms include provision for storage charges. Information sheets on storage and disposal are available to ACT members.

Specialist Skills

People are at the heart of our business and ensuring they are valued and their specialist skills developed and promoted is really important. If customers can easily understand what IBDs have to offer they are more likely to pay a premium for specialist workshop services.

Trained and accredited technicians can help workshops become more profitable. Through Cytech your technicians can increase efficiency and productivity, as well as learning new skills which enable workshops to offer more services to their customers. If your workshop staff already have years of experience, then make sure your customers know that by using Cytech to benchmark their skills.

Cytech is a powerful promotional tool which can set IBDs apart, demonstrating the value of specialist staff and the high quality standards to which they work. If you already have Cytech accredited staff make sure you are promoting the fact to your customers - get certificates on display and logos on websites and marketing materials. And don't forget to take part in our Census so you don't miss out on future consumer promotions. If you haven't yet considered Cytech then maybe now is the time to do so.