Labor $$ - More Important than ever!

[Joe Marconi]

From as far back as I can remember, labor has always been an issue. As and industry, we have struggled to get paid properly for the work we do.  And those shops that understand how critical labor is, are the shops that have done quite well.  

In today's auto repair shop world; Getting the right labor dollars is no longer a buzz topic or debate- Labor dollars will be the salvation of your business. Labor translates into profit, and will also allow you to build for the future and to attract the quality people we need in our industry. 

If you don't know what your labor should be, you need to find out.  Don't call ABC Auto, down the street to ask him. The odds are he did not do the math. Plus his expenses are not the same as yours.

Depending on what you pay your techs, your overhead, and knowing your numbers will determine your labor rate.  I can tell you that there are shops that are paying techs a very good wage and those shops are getting $135 to $150 per hour, and more.  That is not a typo.  And there are shops that have multi-tier rates. So, for Diag and labor jobs that have no parts associated with the repair, their labor is much higher than their standard labor.  It's fair, it's honest and it's time we all raise the bar. 

Please, do the math, get help and make sure your labor is right for your shop. 

[Joe Marconi]

I want to clarify something.  I stated in the above post that many shops are getting $135 to $150 per hour.  I am not implying in any way that this is too high or unreasonable. In fact, as an industry we need to raise the average labor rate across the board in this nation.

What I am saying is that you need to sit down and do the math.  Find out what your labor rate should be by determining your overall cost of labor and your expenses; and then adding your desired net profit. Also, I recommend you have multi-tier rates.  So, a C-level tech performing oil changes and general service is billed at your standard labor rate and an A-level Master Tech performing complex driveability and other onboard diagnostics is billed at a much higher labor rate. 

If you are not sure how to do this, you need to get help from a professional, such as a coach.