Profit Per Hour
Profit Per Hour
As the owner of a Transmission or general repair shop you have poured hundreds of hours and thousands of dollars into building your business, and you deserve for it to be profitable. Over the last 15 years and more we have spoken to far too many repair shop owners who when asked "are you making a profit?" will answer "YES.. Well mostly" and when pushed they admit that they are not totally sure but they have money in their pocket so they must be.
Money in your pocket, or toys in the driveway do not always mean real profits, they far to often mean you have plenty of cash coming in and that covers any shortfall in real profit.
We will show you how to know the profit on each and every job that you estimate, it is so easy to see when your service writer is pricing jobs right and when they are not. Green is good , Red is bad.
As the admin of your software you can enter the PPH numbers you need and then your service writer will see how close, or far away, he is from your target on every job.
How Much Profit Per Hour is the Right Amount?
This is the million dollar question and we have a way to help you work this exact number out, no guesswork, no "what if", just cold hard numbers. The true profit per hour number is much more than just your labor cost, what about all the other bills you have. The rent/mortgage , insurances, phones, power bill and association memberships are all part of the cost of running your business and every hour of work contributes to paying those bills.
This is another part of your business that affects your Profit Per Hour requirements. How many hours do you really have to sell? It isn't as simple as "Well I have 4 guys and each gets paid for 40 hours so 160 hours a week." Don't panic! We have a time tested and proven way to work all these numbers out quickly and efficiently. We also have Tech Efficiency reports that you can use to see who is beating their targets and who is not.
Tech Efficiency is not something that you need to look at every day, but it does have a huge effect on your shops overall profitability so you do need to be aware of it on a weekly basis.
If your team are being paid based on their efficency then you will be looking at the Tech Efficiency reports at least once a week. We have some great blog posts on Tech Efficiency and how to turn a good tech into a great tech.