How Do I Set My Boat Repair Shop's Hourly Labor Rate?

You're asking the wrong person when you ask the shop down the street. Build the rate from your own costs: tech wage, plus payroll burden, plus overhead recovered per billable hour, plus profit, all divided by realistic billable efficiency. In South Florida that math typically lands at $150 to $200 per hour for shop work, $125 to $150 for mobile.

Those ranges are practitioner observation, not a published survey, and your number comes from your math, not mine.

Why copying the shop down the street fails

This question shows up on boating forums word for word. One shop owner asked where to find the standard rate so he wasn't ripping off himself or his clients, which is the honest version of what most owners do quietly: call two competitors, split the difference, post the number somewhere in the middle, and hope. The problem is that the other shop's rate encodes the other shop's costs. Their rent. Their tech wages. Their efficiency. You have no idea whether they make money at that number, and plenty of shops do not, because they built their rate the same way you are about to build yours.

Copy a losing rate and you copy the loss.

A rate is a recovery mechanism. It has to recover every dollar you spend putting a wrench in someone's hand, plus a profit. That is the whole job. Whether your posted number lands near what counts as a good profit margin for a service business depends entirely on whether the rate was built from cost up.

What goes into the loaded rate?

Four layers, stacked in order:

• Tech wage. What you actually pay per hour. In South Florida, a competent marine tech runs $28 to $38 an hour, and factory-certified diesel or outboard techs run more.
• Payroll burden. Employer taxes, workers' comp, benefits. Figure roughly 15-20% on top of the wage. A $28 tech costs you about $33 before he touches a boat.
• Overhead per billable hour. Rent, insurance, the service writer, software, tools, utilities, the loaner truck. Total it monthly, then divide by billable hours invoiced, not hours paid.
• Profit. A deliberate number, not whatever is left over. If you skip this line, you built a break-even rate on purpose.

Wage and burden are the easy half; rates quietly die in the other two lines.

What is billable efficiency, and why does it sink boat shops?

A tech paid for 40 hours rarely bills 40. He bills 32, maybe 36. The rest disappears into haul-outs, moving boats around the yard, waiting on parts, sea trials that don't go on the ticket, and cleanup. Boats are worse than cars here. You cannot pull a 34-footer into bay two in ninety seconds.

In my experience, 80-90% is a strong target for a well-run shop. That is a tight shop's number. Full-service yards lose hours to haul-outs, boat moves, and sea trials and often run 65 to 75 percent. Run your own number; a yard at 70 percent needs the top of the posted range to make the same money.

Here is the trap. If you build your rate assuming every paid hour gets billed, you spread your costs across hours that never hit an invoice, the rate looks fine on paper, and then the month closes and the cash isn't there. That is how you join the owners who are profitable on paper but short on cash. A rate built on 100% assumed efficiency gives away your planned profit by design.

Not by accident, by design.

What does the math look like in practice?

Illustrative numbers for a small South Florida shop, one way to run it:

Run the same math at 100% assumed efficiency and the posted rate drops to roughly $135. Feels competitive. It also hands away half your planned profit on every hour, by design, because the missing hours still got paid.

Track your actual efficiency monthly. It is one of a handful of numbers your monthly financial reports should put in front of you without anyone asking.

The honest answer

You are not really asking what the standard rate is. There isn't one. You are asking whether your number is defensible, to your customers and to yourself.

It is defensible when you can show the stack: wage, burden, overhead, profit, divided by the hours that actually hit invoices. If that math lands at $170 and the shop down the street posts $140, you do not have a pricing problem. Either they have cheaper costs or they have a slow leak. Hold your number.

Build the rate once, properly, and revisit it when wages or rent move. KLYVNT does this kind of cost build-up work with service businesses, but the spreadsheet version above gets you most of the way there.

The street doesn't set your rate; your costs do.