Your Shop’s Payroll as a Percentage of Sales

Elite Business Development Coach and past superstar shop owner Kevin Vaught shares where both your overall payroll, and your service advisor payroll should land as a percentage of your shop’s sales:

For further help building a successful auto repair business, learn how you can team up with a top shop owner like Kevin to reach your shop’s goals.

Transcript:

Bob Cooper:
Thanks for joining us. I’m Bob Cooper, president of Elite Worldwide. And today, I’m actually at our Fly with the Eagles business management course here in San Diego, California. And I’m thrilled to tell you that I’m also joined by Kevin Vaught, a dear friend of mine, I can tell you this, He owned and operated four amazing auto repair businesses in Indiana, retiring at a young age. And I’ve been out hitting golf balls pretty much ever since then. And he joined our company a few years ago, works with us as a business development coach, and does a lot of other things with us. But the important thing is everybody that he talks to, he’s able to help and help them put the ball over the fence. So, Kevin, today you were actually talking about some of the KPIs now we’re talking about labor costs. Can you share some thoughts with our audience?

Kevin Vaught:

Yeah, I find that we do a very good job of tracking our technician labors, you know, on our payroll or our financial statements. But what we need to do is we need to make sure that we track our our total overall payroll number. And I’d like to see that number 35% or less. And I’m talking about total payroll. Everyone in the shop, the technicians, any support staff, managers, advisors, everything should not exceed 35% of the total sales admin. Everybody every put it all together. Everything should be 35% max, no more than 35 numbers. That’s the number I like. And then and then take it one step further. I like to look at my advisors in a separate situation and I think they’re going to be total advisors. If you’ve got five advisors, you’ve got two advisors, it ought to be less than 10% or right at 10% or less of total sales, 10% or more, 10% or less. Sorry for the advisor staff that you have upfront. Absolutely. And total payroll, no more than 35% doing everything, admin and everything. There you go.

Bob Cooper:
You just heard a couple of really great numbers. Take those and run with them because I can tell you, knowing him as I do, these are real numbers. They’re going to work for your business. They work for him. They worked on him, growing his companies and all of his clients. So I know that they’ll work for you as well. So thanks for joining us. Thank you. Great tips. Thank you, Kevin.