Hey guys thank you for all the valuable knowledge and help! Its been 1 year since I made that post and here is the update.
I kept the labor rate the same and marked up the parts by 50%. In the beginning I lost a lot of cheap customers but eventually the good customers started to come who dont question the price of every single part. The business started to make some good profits and overall im happy now. During the busy season I have been booking 1 week out so I think now its time to hire someone. Im planning on hiring an entry level tech that can do oil changes, tires etc while I focus on bigger jobs.