-
Getting cycle shop labour onto zero vat would be a massive help.
This.
We increase our price to reflect the £60/hour labour and have been a big impact and finally charge a sensible labour for our skill and experience (a General Service is now £120 from
£90, which was £80 back in 2020).
edscoble-
I don't mind charging more for services, but how do you avoid people booking in for "just the brakes" or "just the bottom bracket" as the price of a service goes up, we find that people want to book in for odd jobs, which invariably mean we have to assess the whole bike in order to work on it.
We no longer get caught out and beholden to people booking brake services when they mean "can you fit a new hose to my SRAM equipped integrated cabling £8k bike, and that's just a brake service at £20 like it says on your website, yeah?"
ItsHuddo
Good that other's are noticing the massive ponzi scheme that has become medium to big retail in the cycle industry. 2023 is pap for all retail, cycle industry no different, at least we have workshops and other things we can do.
Getting cycle shop labour onto zero vat would be a massive help, its one of the reasons it pays to be a smaller shop, one man band style and fly below the threshold, however with the way rent is in any decent place and the small margins available on most items, a one man band will be turning over the £85k that I think the limit is (?) whilst barely actually making anything for themselves. For stock, buying and selling on the UK VAT scheme and EORI scheme is fine for what it is, its the labour thats an absolute drain. Any labour you charge your customers is subject to VAT @ 20%, so a '£36' job (i.e. an hour or so) looses £6 to the VAT man, then there's the inevitable 20 mins of dropping off, picking up, phone calls, employers contributions to PAYE/pension/sick day fund/holiday fund'. Leaves you with not much more than £10/hour for your mechanics. Could just about push £15 if they are good at what they do, maybe ten years ago £15/hour was reasonable for the industry but this year not so much, in 2023 doesn't buy you much.
Car industry does it differently, the charge out rate is massive, Audi this year are £135-150/hour + VAT. So they only have to book 2 chargeable hours per 8 hour mechanic shift for oil changes and other routine work, that pays for all the fixed overheads and for that mechanic to be there for the rest of the day (6 more hours to burn!), so when they spot you need a cam belt, gearbox oil change, suspension component change, they are able to do it whilst the car is already in. Won't fly in the cycle industry, however those exact customers who honestly don't flinch at getting their 70k new audi SUV a basic oil change done, or other service items which are inherently easy to do whilst vehicle is less than 3 years old as literally designed to be so (yes there are nightmare jobs too) paying that sort of hourly rate; those exact customers WILL have a very prickly opinion on why a part seized BB, mangled brakes and PITA no name hub rebuild job will be £50 of labour please
Long rant, but maybe worth flagging up to ACT or whatever the relevant trade body is that a zero vat scheme could be useful, or some other longer term employee incentive scheme. No other private retail type business has as large an impact on public health as the cycle industry that I can think of? UK is loosing retailers, distributors, manufacturers (planet x I guess counts as that?), valuable knowledgeable staff and mechanics at a crazy rate