Must-Have 7 Skills for Automotive Shop Owners and Managers


Average sale per repair order, gross profit margin (GPM), vehicle count, customer retention—these are the four critical areas you need to track to be profitable. Building a reputation for success with repairs and condition-based maintenance is also key.

But what if you’re better at fixing cars than managing a shop? What if you’re a good manager, but have trouble keeping pace with industry changes? You must have 7 skills for your automotive shop.

If there’s one key to locking in your business’ success, it’s knowing how to price services. Here’s a simple guide:

  • Price your services at 60% GPM ($100 sale = $40 in parts and labor).
  • Track your progress (get outside help if you need it).
  • Review each line item.
  • Check your margins on each estimate.
  • At the end of every business day, check your margins again against the parts installed and cost of labor.
  • Review weekly margins, and then monthly margins.
  • Continue checking your margins and adjusting prices until you meet your gross profit goals.

The 1 Skill You Need to Know

If that’s not simple enough, here’s another way to look at it:

Estimate your prices based on the cost of the parts and labor, plus the cost for profit.

The general rule of thumb is for a 60% gross profit margin (a blend of 70% on labor, 50% on parts and 40% on sublet), which pays for the costs of doing business as well as a net profit.

In truth, there is really only one way you can be profitable:

You have to know if you’re correctly pricing your services based on costs and profit margin.

And that goes for any service you’re offering: maintenance and repairs.

SI Auto Pro “Auto Care Made Easy”, previously licensed and distributed under the Mitchell1™ and Snap-On™ brands, is designed for automotive service and tire dealers using Mitchell1 Manager™/Shop Key™, R.O. Writer™, AllData™, MaxxTraxx™, Costar™, Lankar™, PACE Yes™, NapaTracs™, and other shop management computer systems. blog.AutoSI Auto | Testimonials since 1999

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