Running an automotive shop is a lot like diagnosing a vehicle. You can’t rely on guesswork to fix a car, and you can’t rely on guesswork to run a business. The numbers—the Key Performance Indicators (KPIs) of your shop—are your diagnostic tools. They tell the story of what’s working, what isn’t, and where to focus your energy. Ignoring them is like driving blindfolded: risky, inefficient, and likely to end in disaster.
But when you know, understand, and consistently track your numbers, everything changes. You’re no longer reacting to problems; you’re steering your business toward success with confidence and clarity.
The Wake-Up Call: Mike’s Journey to Understanding the Numbers
Mike had been running his shop for five years. Business seemed fine—bays were always full, the phones rang nonstop, and the team was busy. But despite the hustle, Mike constantly felt like he was treading water. Bills were piling up, profit margins were razor-thin, and stress was at an all-time high.
One day, during a coaching session, Mike’s coach asked him a simple question: “What’s your labor gross profit margin?”
Mike didn’t have an answer.
The coach asked another: “How many labor hours are you billing per day?”
Again, Mike didn’t know.
The Numbers That Matter
Every shop is unique, but there are core metrics that form the foundation of a successful business. These numbers are more than just data points; they’re the heartbeat of your shop.
1. Labor Hours Billed This is the engine of your shop’s revenue. Are your technicians utilizing their time efficiently? Tracking labor hours billed helps you identify productivity gaps and maximize profitability.
Story Insight: Mike discovered his techs were only billing 4.5 hours per day on average, despite working 8-hour shifts. After implementing a time-tracking system and providing additional training, billed hours jumped to 7 per day, significantly boosting revenue.
2. Gross Profit Margins Profit margins on parts and labor reveal whether you’re pricing correctly and controlling costs. A healthy gross profit margin ensures your shop stays sustainable and competitive.
Story Insight: By consistently monitoring margins, Mike found that his parts markup was too low to cover overhead. Adjusting his pricing strategy not only improved profits but also gave him breathing room to invest in better equipment.
3. Customer Retention Rate Returning customers are your lifeline. Tracking retention helps you gauge satisfaction and loyalty. Are you rebooking clients? Are they recommending your shop to others?
Story Insight: Mike started asking every client to book their next appointment before leaving. Within three months, his rebooking rate climbed from 0% to 38%, creating a steady pipeline of work.
4. Average Repair Order (ARO) Value A higher ARO indicates that your team is effectively presenting and selling maintenance and repairs. Tracking this metric ensures your service consultants are maximizing each client visit.
Story Insight: Mike trained his service consultants to present a complete digital inspection with pictures and clear explanations. Clients responded positively, and AROs increased by 20%.
5. Rebooking Rate This metric reflects how well your shop is setting itself up for future success. A consistent rebooking rate means fewer slow weeks and more predictable cash flow.
Story Insight: Mike’s team started using a maintenance plan to remind clients of upcoming services. The result? A shop schedule that stayed full, even during traditionally slow seasons.
Consistency is Key: The Path to Excellence
Tracking numbers isn’t a one-time task—it’s a habit. Just as a technician wouldn’t diagnose a car without running tests, you can’t make informed business decisions without regular data. But consistency doesn’t just happen; it requires a system.
Mike’s system involved:
· A daily review of labor hours billed.
· Weekly profit margin reports.
· Monthly team meetings to review KPIs and set goals.
This rhythm turned tracking into a team effort. Everyone knew the goals, understood the metrics, and worked together to improve.
The Emotional Impact of Knowing Your Numbers
When you start tracking your numbers, the impact isn’t just financial—it’s emotional. For Mike, understanding his shop’s metrics brought a sense of control he hadn’t felt in years. Instead of feeling overwhelmed by problems, he felt empowered to solve them. He could see progress, celebrate wins, and address challenges with clarity.
Knowing your numbers isn’t just about the bottom line—it’s about peace of mind. It’s about waking up each day with confidence, knowing you’re building a business that’s not just surviving but thriving.
Your Roadmap to Success
If you’re not tracking your numbers, start today. Begin with the five metrics above and commit to reviewing them consistently. Don’t be afraid to ask for help—coaches, mentors, or even software tools can make the process easier.
Mike’s journey shows that it’s never too late to take control of your shop. By knowing, understanding, and consistently tracking his numbers, Mike transformed his business. His revenue grew, his stress decreased, and his shop became a place where both clients and employees were proud to be.
Your numbers are your roadmap. Follow them, and you’ll stay OnTrack for success.
