Скачать или смотреть The Reason Your Auto Repair Shop Is Going To Fail and How To Fix It 🤫

This is geared more for startups, small shops that are kicking and screaming to survive and smaller operations.

Most of the bigger shops have been forced to adopt stringent financial policies, and in most cases those were the policies that grew the business.

For those smaller shops? If you want that peace, comfort and freedom you desperately crave?

You gotta build a system around the numbers. And most of us didn't know the numbers starting out! Its knowledge and a skill set you must learn!

But breaking the numbers down into daily or hourly targets? They become much easier to manage!

So let's go through the basics -

When you repair a car, the money left over after paying the tech labor and part bill is called Gross Profit.

After paying all of your expenses, the number left over is called Net Profit.

The Industry average is 4% net profit - a healthy business would be targeting 20%-30% net profit.

This means we can take our average monthly expenses, multiply them by 1.2-1.3 and get a total gross profit requirement for any given period (usually a month).

Next, we can look at the same given period week, month, year and obtain our average billed hours.

Next, we take our required gross profit for the given period and divide it by the billed hours by the same period.

This gives us our gross profit per hour requirement.

I can't speak for other shop management softwares, but I know Shop-Ware provides a gross profit per billed hour on each estimate or recommendation you create.

This allows you to monitor the performance and the targets and adjust on the fly.

I recalculate this number monthly.

Now, be ware - this number can miss some important cash flow requirements (mortgage, debt service, etc) so monitor your cash flow statement and balance sheet!

I add in bigger monthly items to help buffer free cash flow!

#automotive #entrepreneur #smallbusiness #autorepair #mechanic