A couple weeks ago, we hit Episode 200, and I talked about doubling your sales, doubling your profit, doubling your gross profit. Big goals. Long-term goals. But here’s the thing I want to zoom in on today: what are you actually trying to accomplish this year? And more importantly—is your goal helping you… or quietly steering you toward disaster?
One of the biggest mistakes I see shop owners make is setting a sales goal just to set a sales goal. “I want to hit $3 million this year.” Cool. But let me ask you something—why? If you hit $3 million and make the same money you did at $2 million, what did you really win? More work? More stress? More fires to put out?
Why Your Sales Goal Might Be Leading You Toward Disaster [E205]
Are you setting sales goals that actually make you more money — or just more tired? What if your biggest growth goal is quietly setting your shop up for failure? In this episode, Hunt Demarest breaks down one of the most common (and dangerous) mistakes shop owners make when planning for growth: setting sales targets without understanding the real constraints behind them. Listen here.
Sales are what you sell. Profit is what you keep. And if profit isn’t driving the goal, you’re missing the point.
Now, don’t get me wrong—we do need a sales target. But that sales target should be calculated backward from the profit you actually want to make. Profit is the outcome, not the starting line. Once you know how much you want to take home, and you understand your overhead, you can back into the gross profit you need—and then figure out the sales number that supports it.
Here’s where reality kicks in.
I work with over 600 shops across the country, and consistent 30% year-over-year growth? That’s rare. Really rare. Can it happen? Sure. Does it usually come with chaos, burnout, and shrinking margins? Also yes. Most of the time, when sales spike that fast, profit doesn’t follow.
That doesn’t mean big growth is wrong—but it does mean you need to be honest about what it takes to support it.
Do you have the people?
Do you have the space?
Do you have the pricing?
Do you have the cars?
Let’s say you want to net $200,000 this year. A healthy shop should be around a 20% net. That means you need about $1 million in sales. Sounds straightforward—until you break it down.
If half your sales are labor, that’s $500,000 in labor sales. At $130 an hour, that means selling nearly 3,850 hours. With two techs, that’s possible—but only if they’re running hot all year. Bump your labor rate to $155? Now you need fewer hours and a more realistic production level. Drop your labor rate to $100? Now you’re short hundreds of hours you physically don’t have. That’s a red flag.
Same thing on the car count side. If your ARO is $500 and you do 1,600 cars, you either need to:
- Increase ARO to $625, or
- Increase car count to 2,000.
Neither is crazy—but you need to know which lever you’re pulling. Otherwise, you’re just hoping.
This exercise isn’t about math. It’s about finding your limiting factor before it finds you. Because growth for the sake of growth is just ego. Smart growth is profitable growth.
At the end of the day, I don’t care what you sell. I care what you keep.
ABOUT THE AUTHOR – Hunt Demarest, CPA, is a Partner at Paar Melis & Associates and a leading financial expert in the auto repair industry. As host of the Business by the Numbers podcast and a published author of Beyond the Bays, he educates auto shop owners on how to improve profitability and cash flow through proactive tax planning and practical financial insights.