A busy garage isn't always a profitable one. Plenty of owners work 60-hour weeks with every bay full and still have less in the bank at the end of the year than they started with. Your yearly accounts arrive months too late to help. These five numbers tell you how the business is really doing, and you can check them once a month in about 20 minutes.
Number 1: your effective labour rate
Your effective labour rate is what you really earn for each hour you sell. It's often well below the rate on your price list, because of discounts, free work and time written off.
How to work it out: labour takings for the month ÷ hours sold on invoices.
What good looks like: within 5% to 10% of your price-list rate. If the gap is bigger, look at who's getting discounts and why. Not sure your price-list rate is right in the first place? Use the labour rate calculator.
Number 2: how many paid hours you sell
You pay technicians for every hour they're in. You only earn on the hours that end up on an invoice. The share of paid hours you sell is the biggest single lever on profit in most garages.
How to work it out: hours sold on invoices ÷ hours you paid technicians for.
What good looks like: 75% to 85% is healthy. Under 65% means time is leaking: jobs not logged, gaps in the diary, cars waiting for parts, or free diagnosis. If your technicians beat book time, you can go over 100%, which is a good sign.
Number 3: your margin on parts
Most garages know roughly what they add to parts. Far fewer know what they actually keep after wrong parts, returns, free sundries and old prices.
How to work it out: (parts sales − parts cost) ÷ parts sales.
What good looks like: 30% to 45% across the year, depending on your mix of work. If it's lower than you expected, check you're not confusing markup and margin. A 40% markup is only a 28.6% margin. Our guide to parts markup vs margin explains it, with a calculator.
Number 4: average invoice value
Average invoice value is your total takings ÷ number of invoices. It tells you whether you're doing the work each car needs, or just the job it came in for.
If it's falling, check whether technicians are reporting what they find, and whether someone is calling customers about it. A tyre at 2mm, a leaking shock or a service that's due are all work the customer will need within weeks, and if you don't mention it, someone else will do it. A photo or video from the technician with a clear price makes it easy for the customer to say yes. You're not upselling. You're telling them what their car needs.
Number 5: profit after you've paid yourself
This is the one most owners skip. If you work on the tools or run the front desk, your own wage is a cost to the business, just like a technician's. If the garage only "makes money" because you don't pay yourself properly, it's not making money. It's living off your free labour.
How to work it out: total takings − all costs, including a fair wage for every hour you work. Keep VAT out of it. VAT you collect belongs to HMRC.
What good looks like: 10% to 20% of takings is a healthy small garage. Under 5% leaves nothing for a bad month, a broken lift or a new diagnostic tool.
A monthly scorecard you can copy
| Number | How to work it out | Healthy |
|---|---|---|
| Effective labour rate | Labour takings ÷ hours invoiced | Within 5–10% of your list rate |
| Paid hours sold | Hours invoiced ÷ hours paid | 75% – 85% |
| Parts margin | (Parts sales − parts cost) ÷ parts sales | 30% – 45% |
| Average invoice | Takings ÷ number of invoices | Rising or steady |
| Profit after your wage | Takings − all costs incl. your pay | 10% – 20% |
Two warning signs that aren't on the list
Money owed to you
Unpaid invoices aren't profit yet. If trade and fleet customers owe you more than about a month of their work, you're lending them money for free. Our garage cashflow guide covers chasing payment without losing the customer.
Customers not coming back
A garage that wins new customers but loses old ones has to work twice as hard for the same money. Check how many of last year's MOT customers came back this year. If it's under 60%, reminders and follow-up calls will usually earn more than any advert. See how to win back lapsed customers.
What to do when the numbers are bad
Fix them in this order, because the first ones cost nothing:
- Stop the leaks. Log every hour against the job, charge for diagnosis, and price parts from today's cost.
- Charge the right rate. Work out what you need, then raise prices once a year on a set date.
- Fill the gaps in the diary. Reminders, online booking and deposits on MOTs cut empty slots.
- Only then, spend. A new bay or a new technician only makes sense once the hours you already pay for are being sold.
Autex keeps the takings, parts costs and technician time for every job in one place, so these numbers come from your records instead of a shoebox of receipts. Book a demo to see it.