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Are you the highest paid person in your shop?


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This question is more for owners who are not also mechanics working on the cars. Maybe your the owner/ service writer. When you calculate all the hours you put in are you the highest paid per hour employee of the shop? A lot of times I feel the more money that comes in the more money that goes out. The parts bills, payroll, insurances, taxes, marketing, etc... When the dust settles, figuring all the hours you put in, are you the highest paid per hour employee of the shop?

Edited by insomniac
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There should be a separation between your job in the shop and also as the owner. If you are acting as the manager or service advisor or technician you should be paid a salary or whatever based on your job. Whether you deserve more or less than what you would be paying another person to fill the position is another story however you should pay yourself a fair wage. This may or may not make you the highest paid person in your shop. If you have a rock star SA or Tech and they are pumping out work making the shop money then they should be compensated accordingly. Now the when the dust settles you are the owner and can now reap the benefits of whatever net profits your business makes. For instance you could be taking a salary of say 60k/year for being the manager and you have a SA or Tech making 80k however if your shop is making 200k in net profit (would be awesome right?) thats yours to play with so to speak.

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obviously that would be ideal but lets say under that scenerio, if your taking 60k and still left with 200k in profit at the end of the year what is your gross sales? Which I guess bring up the question as to what % of return on the gross sales is considered the average?

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The target Net Profit you want to reach is around 18-20%. GP on Labor and Parts mix should be close to 60%. These are KPIs that are industry standards for a very well run shop. I think the national average though is somewhere around 5% Net or below. For you to draw a net of 200k you should be doing around 1-1.2mil in Gross Sales a year which should be achievable with around 3-4 techs and 1-2 SAs. Maybe less if you are creative.

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  • 2 weeks later...

I think of it this way; the employees get their check and that's it. I get my check plus the growing equity in my business and the real estate. So I make more (that's the goal anyway). If a paycheck was the only goal I would work for someone else and make more assuming they paid unlimited overtime.

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