When we released our latest benchmark report, I knew one section would grab the most attention: the comparison between our top-performing shops and everyone else.

Last week, I covered some of the broader industry trends we’re seeing in 2025. This week, I want to dig into something even more valuable—what separates the most profitable shops from the rest of the pack.

And before we get started, let’s clear up one important point.

When I talk about “top shops,” I’m not necessarily talking about the biggest shops, the newest shops, or even the shops I would personally choose to buy. For this report, we defined top shops using one simple metric: how much of every sales dollar ultimately ends up in the owner’s pocket.

We measure that by combining owner compensation and profit, then comparing it to total sales. In other words, we’re looking at profit efficiency.

What I found was both surprising and encouraging.

Bigger Isn’t Always Better

One of the first assumptions people make is that larger shops must be more profitable. And while many of our top-performing shops do generate over $1.4 million annually, a significant portion do not.

In fact, some of the most efficient and profitable shops in our study are relatively small operations.

Why?

Because they’re doing more with less.

They’re generating strong sales with fewer employees, fewer layers of management, and lower overhead costs. They’re maximizing the resources they already have instead of constantly chasing expansion.

I think a lot of shop owners get caught up in revenue goals. They want to hit $2 million or $3 million because it sounds impressive. But the real question isn’t how much revenue you generate—it’s how much you keep.

A highly productive four-bay shop can often outperform a larger facility burdened by excess overhead and underutilized capacity.

Productivity Beats Labor Rate

Another common belief is that raising labor rates automatically leads to higher profits.

Our data says otherwise.

In fact, the bottom-performing shops in our benchmark actually averaged higher labor rates than the top-performing shops.

Let that sink in for a minute.

The difference wasn’t pricing. The difference was productivity.

The top shops were significantly more efficient. Their technicians produced more hours. Their workflows were tighter. Their teams accomplished more with the same amount of time and resources.

That efficiency translated into stronger labor gross profit and better overall profitability.

If you’re struggling with profits today, there’s a good chance the answer isn’t another labor rate increase. The answer may be improving the productivity of the team you already have.

Overhead Is the Silent Profit Killer

If there’s one number that jumped off the page for me, it was overhead.

Our top shops averaged overhead costs of roughly 30% of sales.

The bottom shops averaged closer to 42%.

That difference is enormous.

Think about a shop doing $1 million in annual sales. A 12-point difference in overhead can mean well over $100,000 in additional profit.

This is where many shops lose ground without even realizing it. They focus heavily on sales growth while overlooking the expenses that quietly erode profitability month after month.

The most successful shops aren’t just generating revenue—they’re managing expenses and maximizing efficiency at every level.

Your Team Matters More Than Your Shop Type

One thing I love about this benchmark is how often it challenges assumptions.

Location wasn’t a reliable predictor of profitability.

Shop specialty wasn’t a reliable predictor either.

General repair shops, European shops, diesel shops—you can find successful businesses in every category.

What consistently stood out, however, was team performance.

The top shops generated substantially more gross profit per service advisor. They invested in employee benefits like retirement plans and health insurance. Most importantly, they created systems that allowed their people to operate efficiently.

The lesson here is simple: success isn’t determined by your market, your building, or even your specialty.

It’s determined by how effectively you manage the people and resources you already have.

Focus on What Moves the Needle

After reviewing all the data, one conclusion became crystal clear.

The most profitable shops aren’t necessarily charging the highest rates, operating in the best markets, or occupying the largest buildings.

They’re relentlessly focused on productivity, efficiency, and controlling overhead.

If your current goal is improving technician efficiency, increasing workflow productivity, or reducing operational waste, this benchmark should reinforce that you’re heading in the right direction.

At the end of the day, profitability isn’t about doing more. It’s about doing more with what you already have.

And that’s exactly what the top shops are doing differently.