Guides · KPIs

My repair shop is busy. Why am I not making money?

The shop's packed every day, and there's still nothing left at the end of the month. Here's how it played out at our sample shop, the way a mechanic works a car: concern, cause, correction, verification.

1

The concern

Nate's shop ran 104 cars a week, but the owner's pay was the first thing to go every month.

Nolavi alerts for a busy auto repair shop losing money on underpriced jobs, unbilled parts and wasted ads
Three leaks, found at once.
2

The cause

Nolavi looked across everything at once. Labor was priced below his cost on 3 common jobs, parts profit was down to 38% from unbilled parts, and $1,250 a month went to ads that brought nothing.

Bar chart of monthly profit leaks at an auto repair shop: underpriced jobs, unbilled parts, wasted ads and missed calls
About $7,800 a month leaking out.
3

The correction

He raised the price on the 3 jobs to match his labor cost, started billing every part, and cut the ads that didn't work, each one approved from the What needs you list.

4

The verification

Same 104 cars a week, and monthly profit went up by about $9,400.

Auto repair shop profit results after fixing leaks with the same car count
Same cars. Real profit.

Example shop. Nate's Auto Repair is Nolavi's sample shop with made up numbers. The steps are exactly how Nolavi works on a real shop's data.

Questions

Quick answers.

Why is my busy shop not profitable?

Common causes are underpriced labor, unbilled parts, high payroll for billed hours and wasted marketing.

Should I raise my labor rate?

Check your effective labor rate and your cost per hour first. Many shops find a few jobs priced below cost.

Keep reading

See it on a sample shop.

Open the demo and find this kind of problem yourself in a minute. Or book your 14 day free trial: it starts with a quick call, and we set it all up and fit it to your shop.

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