Key Numbers 101 Series – Key # 4 True Net
This series includes 24 Key Numbers. If you work on getting all of them in the ranges mentioned, your shop should be solidly profitable.
Key Numbers 101 Series – Key # 4 True net
For this key number we want to know what percent of total sales goes to the owner – including both net profit and the gross payroll that goes to him or her.Last month Acme Auto had total sales of $50,000
Total net profit plus owner’s gross pay was $13,000
$13,000 ÷ $50,000 = 0.26
So our key number is 26%
When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 20% and 25%.
There is a fill in the blank form for this number in our Business Calculators area available to Premium Members.
https://www.automotivemanagementnetwork.com/business-calculators/
Definitions
Gross Payroll: Total regular pay before anything is deducted. Does not include any benefits or non-regular compensation.
Total sales: Includes all parts, shop supplies, labor, sublet and tires.
#autoshopnetprofit
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