Running an auto repair shop is no easy task, especially when you’re trying to keep up with industry standards and ensure your business is profitable. The latest benchmark report, discussed as part one in in Hunt Demarest’s three part “Business by the Numbers” podcast episode, offers some crucial insights that could help your shop thrive. Here’s a breakdown of what you need to know.

What Is the Benchmark Report?

The benchmark report is a detailed analysis of financial and operational data from auto repair shops across the country. It covers various types of shops, including general repair, Euro, and diesel shops, and breaks down their performance in key areas like sales, profitability, and technician productivity. In plain English, this report gives you a clear snapshot of how your shop stacks up against others in the industry, helping you see where you excel and where you might need to make improvements.

This report gives you a clear snapshot of how your shop stacks up against others in the industry, helping you see where you excel and where you might need to make improvements.

Key Findings from the Report

Here are the main takeaways from the report that could make a difference in how you run your shop:

• Sales and Technician Performance: The report highlights that the average sales per technician are around $32,000 per month. If your techs aren’t hitting that number, it might be time to review their productivity or consider additional training.
• Profit Margins: On average, shops are seeing a labor gross profit of about 58-59% and a parts gross profit of just over 45%. Specialized shops, like those focusing on high-end cars, may see different margins, but the key is to keep a close eye on these numbers to ensure you’re not leaving money on the table.
• Rising Costs: The report also shows that costs are creeping up, especially in areas like labor and rent. While sales have seen a slight bump (likely due to inflation), gross profit margins have remained relatively flat. This means that if you’re not actively managing your costs, your profits could take a hit.
• Industry Trends: The report touches on the growing trend of offering competitive employee benefits to attract and retain top talent. Interestingly, 80% of shops now offer health insurance and retirement benefits, with many covering a significant portion of these costs.
• Compensation Structures: There’s no one-size-fits-all when it comes to paying your team. The report found a mix of salary, flat rate, and commission-based pay plans across shops, with no clear correlation between a specific pay plan and overall shop performance. This means you have the flexibility to choose what works best for your team.

Why This Matters

Understanding where your shop stands compared to industry standards is crucial for making informed decisions. This report provides you with benchmarks that can help you identify areas of improvement, whether it’s boosting sales, cutting costs, or revising your compensation plans.

By taking the time to analyze this data, you can make strategic changes that could save your shop money and improve profitability.

Conclusion

The auto repair industry is constantly evolving, and staying competitive means being aware of where your shop stands. This benchmark report offers a valuable snapshot of the industry, helping you make informed decisions that could save your business. Whether it’s optimizing technician performance, managing rising costs, or rethinking your compensation structure, these insights are crucial for staying ahead of the game.