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Auto repair & detailing

Auto Repair Margin Calculator

Work out the gross margin a repair actually returned once parts, labour and the time it really took are counted.

Your numbers

$
$

Result

Gross margin 46.2%
Gross profit $240
Same thing as a markup 85.7%
That job earns $240 of gross profit, a 46.2% margin. The same job described as a markup is 85.7%.

Markup is measured against your cost, margin against the price you charge. A 50% markup is a 33.3% margin, not a 50% one. Pricing off the wrong one is the most common way a job that looked profitable turns out not to have been. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.

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What moves the number

  • Actual hours against billed hours. A job that ran over was billed at book time and cost you more.
  • Parts cost including freight and any core charge not recovered.
  • Comebacks. A repeat visit on the same fault is unbilled labour against the original job.

Where this one goes wrong

Measuring margin on the invoice total including tax. Tax is not yours, and including it flatters every job on the report.

Questions

About this calculator

What margin should a repair job return?

That depends on your overhead and the mix of work, which is why it is worth calculating rather than adopting a number. What matters more is knowing which job types consistently return less than the average.

Why does a busy month sometimes lose money?

Usually because the mix shifted toward low-margin work, or because jobs ran past book time. Volume hides both until the month is costed.

Should comebacks be tracked against the original job?

Yes. A comeback is unbilled labour caused by the first visit, and attributing it elsewhere makes the original job look more profitable than it was.

How useful was this calculator?

Not rated yet. Yours would be the first.

The formula

margin = (price - cost) / price; markup = (price - cost) / cost

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How to use this calculator

  1. Price charged ($). Enter your own figure; the page starts at $520.
  2. Direct cost ($). Enter your own figure; the page starts at $280.

The result updates as you type, so you can try a figure, see what it does to gross margin, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Price charged$520
Direct cost$280

What comes out

ResultValue
Gross margin main result46.2%
Gross profit$240
Same thing as a markup85.7%

That job earns $240 of gross profit, a 46.2% margin. The same job described as a markup is 85.7%.

How sensitive the answer is

Holding everything else steady and changing only price charged, this is what happens to gross margin. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.

Price charged ($)Gross margin
$260 -7.7%
$390 28.2%
$520 example above 46.2%
$780 64.1%
$1,040 73.1%

Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.

What each figure means

Price charged ($)
A money amount, starting at $520.
Direct cost ($)
A money amount, starting at $280.

What the results tell you

ResultWhat it is
Gross marginThe headline result. A percentage.
Gross profitA money figure.
Same thing as a markupA percentage.

Estimating is the easy part

The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.