The Basics You Need to Always be Profitable

This series includes 24 key numbers. If you work on getting all of them in the ranges mentioned, your shop should be solidly profitable. There is a fill in the blank form where you can automatically calculate many of these numbers for your shop in our Business Calculators area available to Premium Members.

This is a great learning and working tool for anyone in your shop who should know what the key numbers need to be.

 
Found 22 Results

Key #1 Payroll Cost

For this key number, we want to know what percent of total sales is spent on gross payroll for all employees of every type except the business owner.

Last month Acme Auto had total sales of $50,000.
Total gross payroll for everyone except the owner was $12,000.
$12,000 ÷ $50,000 = 0.24

So, our key number is 24%

When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 22% and 27%.

Calculate for my shop

Definitions

Gross payroll:
Total regular pay before anything is deducted. Does not include any benefits or non-regular compensation.
Example: Joe works 40 hours at $15 per hour which equals $600. He also received $250 in incentive pay, so his gross pay is $850.

Total sales:
Includes sales of all parts, shop supplies, labor, sublet, and tires.


Key #2 Parts Cost

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Key #3 Expenses

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Key #4 True Net

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Key #5 Marketing Expense

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Key #6 Parts Gross Profit

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Key #7 Tire Gross Profit

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Key #8 Labor Gross Profit

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Key #9 Total Gross Profit

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Key #10 – New Customers Percentage

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Key #11 – Oil Change Percentage

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Key #12 Gross Profit Dollars per Sold Hour

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Key #13, 14, 15 Labor Sales vs. Parts Sales

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Key #16 Vehicles Per Tech Per Day

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Key #17 – Non-techs vs. Techs Ratio

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Key #18 – Average Hours per RO

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Key #19 – Average Hours per Tech per Week

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Key #20 – Sales Per Production Employee

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Key #21 – Average RO

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Key #22 – Sales Per Available Tech Hour

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Key #23 – Effective Labor Rate

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Key #24 – Sales vs. Same Month Last Year

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