How much money can you make owning an auto repair shop?

How much profit can a car repair shop make? According to US News, mechanics make between $30,000 and $50,000 per year. So, a one-man shop could expect to make around this much. The owner of a larger shop can easily make $100,000+ per year by managing a small team of mechanics.

What is a good Ebitda margin?

A “good” EBITDA margin varies by industry, but a 60\% margin in most industries would be a good sign. If those margins were, say, 10\%, it would indicate that the startups had profitability as well as cash flow problems.

Are oil changes profitable?

While an oil change in itself makes very little profit, the addition of extra services and parts for each customer raises the average profit margin up to 35\% for services rendered per customer.

Do you want a high or low EBITDA margin?

A low EBITDA margin indicates that a business has profitability problems as well as issues with cash flow. On the other hand, a relatively high EBITDA margin means that the business earnings are stable.

How do you price a mechanic job?

Most auto repair shops quote labor charges using a “flat rate” manual or computer program that provides the average time it takes an experienced technician to perform a given car repair. That flat-rate time is then multiplied by the shop’s hourly labor rate to reach the total labor charge for the service.

How profitable is a lube shop?

Hardly a Loss Leader: With a Profit Margin of 35\%, Oil Changes Make a Difference. Oil and lubrication service sales represent $1.6 billion in revenue for independent tire dealers every year, or $60,651 per dealer. In addition, the average profit margin per job is 35\%.

What are the average profit margins for an auto repair shop?

In total, the profit margins for an auto repair shop should hover around 50\% on parts and labor, with a range of 10\%. Knowing average profit margins is just one small step of increasing total revenue, net sales, and gross profit margin. By decreasing your cost of labor, you can cause the biggest increase in profits in your income statement.

What is a good pooled margin percentage for auto parts?

An overall pooled margin of 50\% is a realistic and attainable goal. Every job is different. However, over a long period of time, strive to average about $1 for labor for every $1 of parts sold. If your labor sales are significantly higher than your parts sales over time, it usually means that you aren’t marking your parts up enough.

What is the profit margin on parts and accessories sales?

At a minimum, set goals to achieve a 50\% profit margin on sales of parts and accessories. Parts and accessories purchased from dealerships are normally priced somewhere lower on the spectrum, while parts and accessories purchased from jobbers are normally priced higher on the spectrum.

What is the average GPM of an automotive repair shop?

A very healthy automotive repair shop can net a 20\% GPM after everything is paid for, including the owner’s salary. The reality is, most are well below this. Quite honestly, I’d say a majority are in the 5\% or less.