5 Easy Ways to Make Your Auto Shop More Profitable

auto repair shop Female mechanic repairing a car in a garage.

auto repair industry Annual revenue is expected to reach $78.4 billion in 2022, according to IBISWorld. However, despite the massive growth in the market, it can be difficult for auto repair shops to maintain their share of the profits.

Running a car repair business is no walk in the park, and increasing competition has made it even more difficult. However, there are different ways in which bodyshops can improve their profitability.

In this post, we will discuss 5 easy ways to make your car repair shop is more profitable. But first, let’s get our hands dirty with the basics.

Understanding Profit Margin for Auto Repair Business

Simply put, the garage margin is the percentage of sales that make a profit.

The profit margin is calculated based on the net income and revenue from your auto repair business. In order to evaluate the actual performance of your workshop, it is recommended that you always choose net profit.

Here is how you calculate it:

Profit Margin = ((Revenue – Expenses)/Revenue) * 100

The higher the score, the better. However, to benchmark how your auto repair shop is doing, you can compare the result to the average rate of return in the industry.

You can also do a time analysis and compare earnings for each quarter.

How can I make my auto repair shop more profitable?

To make your auto shop profitable, you can use the following five different strategies.

1. Lower labor costs

Let’s start with the most important first. To have profitable auto repair shops, you need to double your expenses.

One of the biggest expenses you are going to have is labor. In order to perform all types of repairs in the auto repair shop, you will need to build a complete team of technicians and auto mechanics.

So how can you manage work time in auto repair shops?

In fact, scheduling workshops can actually improve efficiency. To run an economical, efficient, and profitable auto repair shop, you need to schedule and track the amount of time it takes to complete repairs.

The less time, the better your efficiency level will be. To do this, you can use time tracking tools such as auto repair shop software. you also can use software to track detailed service history client.

This will help your employees quickly track any work and complete it quickly. It also improves customer satisfaction.

2. Build a Strong Online Presence

In order to become the preferred auto repair shop, you first need to attract the attention of car owners to it! And the best way to do that these days is to have an active online presence.

To get started, you will need to create a business website. Most vehicle owners are under 40 and this demographic interacts with brands online.

To add fuel to the fire, COVID-19 has completely changed shopping patterns.

Companies with strong business capabilities and an online presence have managed to increase profits.

When setting up a website, ensure the following:

  • Your services are clearly listed on the site
  • Your contact information and location are displayed in advance
  • Mobile-friendly interface
  • Customer Reviews

Besides a website, you can invest in digital marketing. Some digital marketing tools you can use include social media marketing and engine optimization.

Digital marketing, when done right, is a great way to build a customer base.

3. Increase customer loyalty

In addition to attracting new customers, you also need to focus on retaining existing customers. This can be done through a loyalty program.

Loyalty programs are a great way to attract loyal customers. These programs include incentives such as free service after a certain number of services or discounts for customers who visit auto shops again and again.

You can also use your existing customers to get new ones through the customer referral program. Thanks to this, you can offer customers discounts on services for attracting new customers.

Thus, you can earn more money and increase your profits.

4. Automate your processes

You can increase your profit by reducing overheads through automation. Modern technologies and software can speed up business processes and improve efficiency.

This reduces your costs and gives you a higher bottom line. Lower costs also improve your financial situation and reduce your need for car repair loans.

For example, car repair software is one example of such technology. Using this you can:

  • Automate the scheduling of work tasks
  • Track uptime and maintenance
  • Create comprehensive performance reports
  • Manage your stock levels
  • Automatic ordering of spare parts
  • Creation of financial reports
  • Maintain customer database and service history
  • Offer customers digital vehicle inspection to streamline processes

Automating these processes reduces the need to spend more money on hiring staff. By reducing processing time through automation, you can also free up time to serve more customers.

You can also reduce the time it takes you to serve each customer. Faster service will help you retain your loyal customer base and double your dealership’s profits.

5. Invest in your team

By far, this is one of the most underestimated strategies for increasing the profits of your business. But look at it this way: the more you invest in your employees, the better the service will be.

And we already know that better customer service means… higher profits for the business! As for the auto repair industry, investment in technicians and auto mechanics are even more important.

The nature of the repair work is technical in nature, so you need to make sure your team can do it right. If customers keep coming back to you with the same problem, it means your team didn’t fix the problem properly.

This can lead to low customer satisfaction, leading to bad reviews and word of mouth.

Remember that for a new or expanding business, customer feedback is important. You need to be sure that you are offering the highest possible quality of service to your customers.

It is also recommended not to charge clients a fixed fee. In fact, you can segment your customer base. Rates for luxury car repairs may differ from hatchback rates.

The goal is to become the best choice for customers for regular maintenance and repairs. So remember, you have to go the extra mile and offer nothing less than great services.

And the best tool for this is a well-trained and qualified team!


To sum it up, if you are a small business owner in the auto repair industry, you must understand that you do not have much leeway when it comes to spending money.

You will have to cut where you can and spend your money very wisely. This is the part that makes the auto repair industry so tough. The competition is cutthroat, so to maintain margins, you need to double your spending while focusing on increasing revenue. In addition, you must also invest wisely in auto repair shop tools as they can also affect your bottom line.

But there are ways to get around this, and you shouldn’t let these problems stop you from growing your business and earning a higher income. In this post, we discussed five easy ways to make your auto repair shop more profitable.

But in the end, remember that you need to focus on keeping your customers happy, have a well-trained team, and invest in automation.


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