You might do well to take a business course. Having a balanced budget is essential for the survival of a business.

You need to find out how much it costs to run your business, including ALL the overhead like shop supplies , utility bills etc. That will determine your rate.

You can also try calling some local shops in your area and find out what they charge for common jobs like brakes, oil changes, etc. You will be competing with them. Since you're starting out, you will have to come in below them.

A lot of mechanics I know go by book time, i.e. how much time the “book” (e.g. like Mitchell) says it should take to perform a job.  So then they charge the customer “cost of parts (including markup) + labor rate x book time” and the customer knows that price (and signs off) before the work is performed of course. A really good mechanic can beat the book time most times and cram other jobs in but still get paid according to the book time for each job.

@mountainmanjoe is exactly right. You will need people skills to survive out here.

At my shop, we go by both depending on the job. My guys can knock an oil change out quick, so I'm comfortable offering a flat rate on something like that. BUT...it goes by car. Ferrari oil changes are a lot more involved than, say, a Land Rover. Fortunately the vast majority of my customers know this and understand that higher costs come with ownership of high end vehicles.

But then someone will bring in a Lamborghini that has an electrical problem. In that case, you never know what it is. I can't charge a flat rate because there is no telling how long it will take to find the issue or how much the potential repair will cost. Maybe the tech can fix it without replacing parts. Or maybe I've got to get a part shipped from Italy that costs a small fortune. In those cases, I charge a flat diagnosis fee and then an hourly fee after that. 

Now....there are exceptions to every rule. Suppose someone winds up needing 16 hours of labor for a big job they were not expecting. I may choose to wave the diagnostic fee to try and help them out. Or if it is a smaller job but a loyal customer, I may charge the diagnostic fee but apply 50% of that cost as a credit on their final bill for letting us make the repair.

There is a lot of give and take and as the owner you have to know exactly what you are looking at in expenses when it comes to each and every job before you price something out. I live by my word being my bond, so I don't do ballpark figures. If I give a price, that's the price and if I underbid it I have to accept the responsibility for that. Fortunately I've been doing this long enough to have it down, but when I first started out it wasn't always that way. You live and you learn.

Now when it comes to pricing out fully custom, ground up builds.....it is case by case and depends on what the customer requests. These projects almost always have unexpected expenses that happen, and the GOLDEN RULE is you ALWAYS, ALWAYS contact the customer and get approval for extra costs before you buy the parts. There are so many variables when you go full custom that I can't even list them here. Communication with the customer is absolutely key during builds, and those are the projects that I always personally involve myself in to help make sure we get it done right. My techs don't need me to build it...they could do it themselves. But I'm the one who has had the long conversations with the customer to get an idea of what they have in mind as the finished product, so sometimes I have to change things here or there.

It can be super stressful, but it is fun and nothing is more satisfying to me than delivering those cars/trucks when they are done. Have had some very cool moments. {black}:cool:  

BTW, make sure to factor in customer like me who will always ask for a discount. 

People do not like mechanics with hourly rates. You're gonna constantly hear "Well, you said it would take 2 hours, but it actually took you 6 hours! How do I know if it really took 6 hours for you to do the job?!" There's a lot of subjectivity with hourly rates...you, yourself, don't know how long it will actually take and customers will think you are purposefully taking a long time to work on their car to get more money out of the job. 

Flat rates are better because it's based on the difficulty of the job. For example, an oil change should be no more than $50 worth of labor for a typical car (but if it's a proprietary oil change where the oil has to be extracted out of the dipstick let's say, then you can charge more). In comparison to the oil change labor, a typical brake job is probably around $150-200 worth of labor (higher cost for proprietary systems). And so on...

As for the materials needed like oil, filters, brake pads, and so on...their cost is separate from the labor. For example, if the oil and filter costs you $20, and the labor is $30, then you charge the customer $50 for the whole oil change. This is the main reason why BMW/Mercedes/VW oil changes cost more than Honda/Toyota oil changes...because of the price for quality materials, not necessarily the labor. 

Bit confused. You saying like hourly as 100$ per hour vs $100 dollar no matter how much time spent on this brake job? Depends on your ability as a mechanic as well. If you told someone that say for the brake job example that you can get all 4 disc and pads changed as well as a brake flush for $100 provided that they provide parts vs saying $100 per hour you work on the same condition of customer providing parts I would think most people would want a certainty on price from the get go, I know I do. Especially if you are just starting out. Get a feel for how long it will take and if you want later adjust your price later for the flat down.