=============================================================================== CAR DETAILING PROFIT TEST WORKSHEET Detail Compass | companion to /guides/is-car-detailing-profitable =============================================================================== PURPOSE This worksheet tests one defined month. It keeps owner pay separate from the operating surplus so unpaid owner labor does not make a weak plan look strong. It is a planning tool. It is not tax, legal, accounting, insurance, or lending advice. The three completed scenarios at the end are fictional examples. HOW TO USE THIS FILE 1. Copy this file and enter your own numbers in the blank fields. 2. Use one month as the time unit. Use dollars and hours consistently. 3. Include travel, setup, pack-up, quoting, messages, restocking, cleaning, and bookkeeping in owner total hours. 4. Replace estimates with measured numbers after your first real jobs. 5. Re-run the test when you change a price, service mix, job time, or cost. TERMS Revenue = all money billed for the jobs in the month. Direct cost = a cost consumed by a specific job, such as chemicals, pads, towels, water, or trip fuel assigned to that job. Payment fee = the percentage of revenue your payment provider keeps. Enter the current provider rate. The examples below use 3% only as a fictional input. Fixed overhead = monthly cost that remains when you have no bookings. Production hours = job hours, including travel, setup, and pack-up. Owner total hours = production hours plus non-production hours. Owner-pay allowance = owner total hours multiplied by the owner hourly rate. This is an economic planning cost. It is not a claim about payroll or deductibility. Contribution = revenue minus direct costs minus payment fees. Operating surplus = contribution minus fixed overhead minus owner pay. Planning buffer = an editable sensitivity input. It is not a tax rate or tax calculation. Cash recovery = one-time setup cash divided by positive cash after the buffer. One-time setup cash excludes the working-capital reserve and contingency held for day-one operations. This is a modeled planning result computed after an imputed owner-pay allowance. It is not a bank balance, owner take-home income, or a tax result. ------------------------------------------------------------------------------- 1. YOUR INPUTS ------------------------------------------------------------------------------- Business or plan name: ______________________________________________________ Month tested: ____________________ Payment provider: __________________________________________________________ Payment fee as a decimal (example: 0.03): __________ Planning buffer rate as a decimal (example: 0.25): __________ One-time setup cash to recover: $________________ Service A name: __________________________ Jobs: ______ Price: $__________ Direct cost per job: $__________ Total hours per job: ________ (Include on-site time, travel, setup, and pack-up.) Service B name: __________________________ Jobs: ______ Price: $__________ Direct cost per job: $__________ Total hours per job: ________ Service C name: __________________________ Jobs: ______ Price: $__________ Direct cost per job: $__________ Total hours per job: ________ Non-production hours this month: Quoting and messages: ________ Scheduling and admin: ________ Restocking and laundry: ________ Cleaning and equipment care: ________ Bookkeeping and marketing: ________ Other: ________ TOTAL NON-PRODUCTION HOURS: ________ Owner hourly rate for this planning test: $________ per hour ------------------------------------------------------------------------------- 2. FIXED OVERHEAD FOR ONE MONTH ------------------------------------------------------------------------------- Use a monthly amount. Divide annual bills by 12. Leave unknown items blank, then mark the result as incomplete. Do not enter zero just because you do not know the amount. Insurance: $________________ Vehicle payment or set-aside: $____________ Vehicle fuel not assigned to a job: $__________ Phone and internet: $________________ Booking, invoicing, or accounting software: $________________ Website and domain: $________________ Advertising: $________________ Equipment repair or replacement set-aside: $________________ Storage, bay rent, water, or power: $________________ Licenses and permits, annual cost / 12: $________________ Other: $________________ Other: $________________ TOTAL FIXED OVERHEAD: $________________ ------------------------------------------------------------------------------- 3. CAPACITY CHECK ------------------------------------------------------------------------------- Working days in the month: ________ Production hours you can hold per working day: ________ Realistic booked share, as a decimal: ________ Example: 0.70 means 70%. Choose a number you can defend. Do not assume every available slot will be booked. RAW PRODUCTION CAPACITY working days x production hours per day = ________ x ________ = ________ production hours REALISTIC PRODUCTION CAPACITY raw production capacity x booked share = ________ x ________ = ________ production hours SERVICE A PRODUCTION HOURS = jobs x hours per job = ________ x ________ = ________ hours SERVICE B PRODUCTION HOURS = jobs x hours per job = ________ x ________ = ________ hours SERVICE C PRODUCTION HOURS = jobs x hours per job = ________ x ________ = ________ hours TOTAL PLANNED PRODUCTION HOURS: ________ TOTAL OWNER HOURS = production hours + non-production hours = ________ + ________ = ________ hours CAPACITY FIT: planned production hours <= realistic production capacity? YES / NO If NO, do not use the cash-recovery result as a feasible forecast. Cut jobs, change scope, change prices, shorten measured job time, or add labor and its cost before you run the test again. ------------------------------------------------------------------------------- 4. MONTHLY PROFIT TEST ------------------------------------------------------------------------------- A. REVENUE Service A jobs x price = ________ x $________ = $________________ Service B jobs x price = ________ x $________ = $________________ Service C jobs x price = ________ x $________ = $________________ TOTAL REVENUE = $________________ B. DIRECT COSTS Service A jobs x direct cost = ________ x $________ = $________________ Service B jobs x direct cost = ________ x $________ = $________________ Service C jobs x direct cost = ________ x $________ = $________________ TOTAL DIRECT COSTS = $________________ C. PAYMENT FEES total revenue x payment fee rate = $__________ x ________ = $________________ D. CONTRIBUTION total revenue - total direct costs - payment fees = $__________ - $__________ - $__________ = $________________ E. FIXED OVERHEAD From section 2 = $________________ F. OWNER-PAY ALLOWANCE owner total hours x owner hourly rate = ________ hours x $________ = $________________ G. OPERATING SURPLUS contribution - fixed overhead - owner-pay allowance = $__________ - $__________ - $__________ = $________________ Keep a negative number negative. A negative operating surplus means the plan does not pay the chosen owner rate after the listed costs. ------------------------------------------------------------------------------- 5. PLANNING BUFFER AND HONEST CASH RECOVERY ------------------------------------------------------------------------------- This buffer is a discretionary sensitivity input. It is not a federal, state, local, or self-employment tax estimate or calculation. Ask a qualified tax professional about your facts. Do not describe this result as an after-tax profit forecast. PLANNING BUFFER max(0, operating surplus x buffer rate) = max(0, $__________ x ________) = $________________ CASH AFTER PLANNING BUFFER operating surplus - planning buffer = $__________ - $__________ = $________________ HONEST CASH RECOVERY If cash after planning buffer is positive: one-time setup cash / cash after planning buffer = $__________ / $__________ = __________ months If cash after planning buffer is zero or negative: NO RECOVERY FIGURE. Change the plan before calculating months. The recovery result excludes taxes, owner draws above the owner-pay allowance, debt service, refunds, redos, slow months, and surprise equipment replacement. The planning buffer is not a tax estimate. It assumes the job counts happen. It is a planning result, not a promise. ------------------------------------------------------------------------------- 6. DECISION RECORD ------------------------------------------------------------------------------- Operating surplus: $________________ Owner total hours: ________________ Capacity fit: YES / NO Cash after planning buffer: $________________ Cash recovery: ____________________ months / NO RECOVERY FIGURE The one input I will change first: __________________________________________ Why: _______________________________________________________________________ ____________________________________________________________________________ Next review date: ____________________ ------------------------------------------------------------------------------- 7. COMPLETED HYPOTHETICAL SCENARIOS ------------------------------------------------------------------------------- These scenarios are fictional. Their prices, costs, hours, job counts, overhead, owner rates, one-time setup cash, and buffer rate are assumptions created for this worksheet. They are not market data or reported earnings. SHARED ASSUMPTIONS Payment fee: 3% of revenue, for planning only. Direct cost per job: $14 wash, $28 interior, $48 full. Total hours per job: 2.5 wash, 5 interior, 7.5 full. Planning buffer: 25% of positive operating surplus, for sensitivity testing only. One-time setup cash excludes the working-capital reserve and contingency held for day-one operations. SCENARIO 1: LEAN LAUNCH, LOW VOLUME Inputs Jobs: 12 wash, 6 interior, 2 full Prices: $95 wash, $195 interior, $325 full Non-production hours: 24 Fixed overhead: $900 Owner rate: $25/hour One-time setup cash: $3,000 Capacity: 20 days x 8 production hours x 60% = 96 realistic hours Arithmetic Revenue = (12 x $95) + (6 x $195) + (2 x $325) = $2,960 Direct costs = (12 x $14) + (6 x $28) + (2 x $48) = $432 Payment fees = $2,960 x 3% = $88.80 Contribution = $2,960 - $432 - $88.80 = $2,439.20 Production hours = (12 x 2.5) + (6 x 5) + (2 x 7.5) = 75 Owner total hours = 75 + 24 = 99 Owner-pay allowance = 99 x $25 = $2,475 Operating surplus = $2,439.20 - $900 - $2,475 = -$935.80 Planning buffer = $0 Cash after buffer = -$935.80 Cash recovery = no recovery figure Capacity fit = yes, 75 <= 96 Reading: this month fits the schedule but does not pay the chosen owner rate after overhead. Do not divide one-time setup cash by a negative monthly result. SCENARIO 2: BALANCED MOBILE, TARGET MENU Inputs Jobs: 24 wash, 12 interior, 6 full Prices: $125 wash, $275 interior, $450 full Non-production hours: 36 Fixed overhead: $1,300 Owner rate: $28/hour One-time setup cash: $6,000 Capacity: 24 days x 10 production hours x 70% = 168 realistic hours Note: 24 working days at 10 production hours is a heavy schedule. To work less, lower days or hours in section 3, cut jobs to fit, and check whether the operating surplus is still zero or more. Arithmetic Revenue = (24 x $125) + (12 x $275) + (6 x $450) = $9,000 Direct costs = (24 x $14) + (12 x $28) + (6 x $48) = $960 Payment fees = $9,000 x 3% = $270 Contribution = $9,000 - $960 - $270 = $7,770 Production hours = (24 x 2.5) + (12 x 5) + (6 x 7.5) = 165 Owner total hours = 165 + 36 = 201 Owner-pay allowance = 201 x $28 = $5,628 Operating surplus = $7,770 - $1,300 - $5,628 = $842 Planning buffer = $842 x 25% = $210.50 Cash after buffer = $842 - $210.50 = $631.50 Cash recovery = $6,000 one-time setup cash / $631.50 = about 9.5 months Capacity fit = yes, 165 <= 168 Reading: this scenario passes the pay and capacity checks, but it has only 3 production hours of realistic capacity slack. A cancelled day or redo can change the result. SCENARIO 3: BUSY MOBILE, CAPACITY RISK Inputs Jobs: 32 wash, 18 interior, 8 full Prices: $135 wash, $300 interior, $500 full Non-production hours: 48 Fixed overhead: $1,600 Owner rate: $32/hour One-time setup cash: $9,000 Capacity: 24 days x 10 production hours x 75% = 180 realistic hours Arithmetic Revenue = (32 x $135) + (18 x $300) + (8 x $500) = $13,720 Direct costs = (32 x $14) + (18 x $28) + (8 x $48) = $1,336 Payment fees = $13,720 x 3% = $411.60 Contribution = $13,720 - $1,336 - $411.60 = $11,972.40 Production hours = (32 x 2.5) + (18 x 5) + (8 x 7.5) = 230 Owner total hours = 230 + 48 = 278 Owner-pay allowance = 278 x $32 = $8,896 Operating surplus = $11,972.40 - $1,600 - $8,896 = $1,476.40 Planning buffer = $1,476.40 x 25% = $369.10 Cash after buffer = $1,476.40 - $369.10 = $1,107.30 Paper recovery = $9,000 one-time setup cash / $1,107.30 = about 8.1 months (Paper recovery means the months to repay setup cash on paper, before the exclusions in sections 5 and 8.) Capacity fit = no, 230 > 180 Reading: the paper recovery is not a feasible forecast because the job plan needs 230 production hours and the stated realistic capacity is 180. Cut jobs, change the menu, raise prices, shorten measured times, or add labor and its cost before using this scenario. ------------------------------------------------------------------------------- 8. TAX AND ACCOUNTING LIMITS ------------------------------------------------------------------------------- The 25% planning buffer is discretionary sensitivity testing. It is not a tax rate, tax reserve, or tax calculation. The IRS says the self-employment tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. You generally must pay it when your net earnings from self-employment are $400 or more. See: https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes If you file as a sole proprietor, the owner-pay allowance is not a wage expense on Schedule C. In Scenario 2, the starting figure for tax is closer to contribution minus overhead: $7,770 - $1,300 = $6,470, not the $842 surplus after your owner-pay allowance. That $6,470 monthly return before tax is the $5,628 owner-pay allowance plus the $842 surplus, if none of it repays setup cash. A 15.3% rate on a figure of that size is far larger than the $210.50 planning buffer. The IRS decides the exact amount the rate applies to. The Internal Revenue Service says self-employed people generally pay income tax and self-employment tax, calculate net profit or loss from business income and business expenses, and may need estimated tax payments because no employer withholds for them. See: https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center The IRS describes Schedule C as the form used to report income or loss from a sole-proprietor business when it applies: https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 The IRS also warns that limits can apply to a reported loss. Your entity, state, local rules, deductions, mileage method, and other income can change the result. This worksheet's owner-pay allowance is an economic value for planning. It is not a claim that the amount is deductible or payroll. https://www.irs.gov/instructions/i1040sc The U.S. Small Business Administration explains that startup-cost and break-even estimates help owners estimate profits and separate fixed costs from variable costs: https://www.sba.gov/counseling/plan-your-business/ Use a qualified tax professional for your filing and payment decisions.