Shop rates and MX

[pfarber]

in my engine room with a PIPE WRENCH! trying to get a brass fitting off the engine.

My airline requires a Ford wrench in our mandatory tools list. If there is an MX without a Knipix 7in water pump pliers I'd be shocked, shocked I tell you (they are da bomb at getting off canon plugs).

 

[Barrett50]

My airline requires a Ford wrench in our mandatory tools list. If there is an MX without a Knipix 7in water pump pliers I'd be shocked, shocked I tell you (they are da bomb at getting off canon plugs).

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Sorry to offend, but that's still wrong. Canon has a dedicated tool for their plugs since 1968. I know because I was in da army and we had a gazillion Canon plugs on equip.

 

[Dana]

My math works. What's a Dana?

You said, "Going from $120 to $150 an hour is a 20% jump." I pointed out your math error; it's actually 25%. You replied defending a different part of your post that wasn't in error (yes, 150 to 180 is indeed 20%). I didn't think it was worth the trouble of continuing the conversation but others picked up on it.

 

[Racerx]

You said, "Going from $120 to $150 an hour is a 20% jump." I pointed out your math error; it's actually 25%. You replied defending a different part of your post that wasn't in error (yes, 150 to 180 is indeed 20%). I didn't think it was worth the trouble of continuing the conversation but others picked up on it.

Math is hard

 

[decalogue]

Ask you IA about his expenses:

Insurance ($6k to start is not unreasonable)
taxes / health insurance / 401k
Tools / calibration
AD software (he could hard core it and use the FAA web site but I would not use an IA that does)
sundries like shop towel, oil dry, gloves, hand cleaner, PPE

IAs do have a much more lucrative cash stream and can see a higher net profit but its not all going right into their pocket.... I wish it was.

I work with quite a few guys that started with GA, same story, interesting work, great hours, garbage pay. Me? I'll take my airline pay and bennies and work service checks and MELs for the next decade or two.

Some also do AOG work, but 6k yr isn’t bad with the business a good IA has.

They also have much more in their pocket than the “work to live don’t live to work” kiddo at the local junker dealer

 

[Bell206]

If you have more workers billing more customers at a higher rate you make more money.

Except that only works if the customers hang around after you raise your rates. And as we saw several posts earlier, their mx provider increased the rates and they decided to handle their mx requirements in a different manner.

Perhaps that path works at your airline with its $41,250 per hour shop rate, but it also begs the question, what revenue does your airline use to pay its pilots, stewardesses, baggage handlers, etc. when all the pax money per flight is used to cover the mx shop rate as you stated in Post 45?

 

[Lindberg]

Ok, we haven't had a troll playing the long game like this in a long time.

 

[pfarber]

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Sorry to offend, but that's still wrong. Canon has a dedicated tool for their plugs since 1968. I know because I was in da army and we had a gazillion Canon plugs on equip.

Yes I have one, worthless about 75% of the time. Case in point 717 elevator position sensor. That huge POS ain't getting near the plug. Knipex to the rescue!!! There are a zillion more places I can think of. Now in an E&E bay where the LRUs are nice and roomy or in the flight deck behind a panel? Ok, they will work... so will my fingers.

 

[pfarber]

You said, "Going from $120 to $150 an hour is a 20% jump." I pointed out your math error; it's actually 25%. You replied defending a different part of your post that wasn't in error (yes, 150 to 180 is indeed 20%). I didn't think it was worth the trouble of continuing the conversation but others picked up on it.

There is no error in the math. Semantics possibly.

 

[Dan Thomas]

There is no error in the math. Semantics possibly.

There was indeed an error in the math. Dana corrected your math when you said that going from $120 to $150 was a 20% jump. It was a 25% jump. Then you retorted with calculations of a jump from $150 to $180. Moving the goalposts to make your original 20% look right is a lot less than honest. Nothing to do with semantics, everything to do with deflection.

 

[pfarber]

Except aviation mx is not similar to most other business ops on various levels. In general, if you run your mx business like a dial up ISP business you’ll either be out of business or eventually gain a bad rep. So the successful mx shops or individual A&P ops tend to realize that difference and in today’s market most remain booked, have a sold customer base, and don’t have to advertise which has nothing to do with their rates. The issue its these type run shops are declining as the shop owner retire and next gen owners don't recognize or see that business difference.

Regardless, if a mechanic really wanted to bump up their game in the Part 91 recreational market, they would go mobile which allows them to charge a premium rate by bringing that service to the customer. However, its not for the faint of heart to be successful at due to a number of roadblocks for that type of service. Unfortunately, there has been a notable uptick in one aspect of this type service but from the opposite end of the mx spectrum who value their signature more than the work they perform. And this became very evident during covid when the used aircraft market exploded as people were trying to move any aircraft they had or could find.

Running a business on the numbers side is exactly the same for an MX or an ISP. Track your expenses, your revenue and monthly look over the balance sheet. A good accounting app set up properly is usually more than enough... the real kicker is that the bookkeeper (or owner) has to do the data entry and put the money into the proper buckets to get a complete picture of the business. Have a CPA look over everything quarterly.

A mobile MX has the same expenses as any other business. The only real difference would be on the service charges. This is, again, taken care of by proper planning. Your quote/service agreement should include (for a mobile MX, as a specific example) fee's for waiting for access. If an airport has commercial operations (121 etc) then you may need an escort... waiting 90 minutes for an escort or a gate to be opened is billable. Do you need to rent/provide your own generator? Thats a fee. While to some that may seem like nit picking (they charge for everything!) what an owner needs to realize is that renting that genny takes money, and you need to be compensated or profits dissappear.

Depriciating tools/cal expenses/maintenance/tracking you should know and charge for that.
Travelled miles is billable. Wait time etc etc.

If there was work at a customers location you can bet that it was normal service fee + whatever (and included/line itemed in the quote). If customer said they could provide X or do Y, great. But it must be up to our standard and if a customer supplied Z broke or didn't operate to our standard, then work stopped until they fixed it or we supplied one. If personell were on site waiting, they were billed for that time.

If an MX wants to go out on thier own (travelling AnP or IA) then I would HIGHLY, HIGHLY, HIGHLY recommend they contact the local SBA and ask about the SBA mentorship program. You will learn a ton and make some connectionts in the business community. Write a business plan. Stick to it and alter it as your business changes.

 

[pfarber]

There was indeed an error in the math. Dana corrected your math when you said that going from $120 to $150 was a 20% jump. It was a 25% jump. Then you retorted with calculations of a jump from $150 to $180. Moving the goalposts to make your original 20% look right is a lot less than honest. Nothing to do with semantics, everything to do with deflection.

The math on the $150->$180 is correct.

I totally missed the $120->$150 being incorrect. No goalposts were moved, I never defended the $120 math. Or did I? Not sure, its not a critical part of the overall discussion. I guess next is going to be a through reivew of my grammar and spelling.

 

[Bell206]

Running a business on the numbers side is exactly the same for an MX or an ISP.

Ha. Well, based on your previous mx “business” calculations in this thread like your $41,250 x 20 shop rate at your airline, I think its pretty obvious you have minimal to no experience on the aircraft mx business side. Regardless, if the day comes and you do open an aircraft mx shop, and you believe all your customers will gladly accept a $20 rate increase and that everything is billable, well best of luck to you.

or profits dissappear.

But I’m curious on one point, what net profit percentage do you shoot for in your aviation mx business planning?