![How to plan and track the budget of your auto repair shop [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-1_eb408d5e-e272-4260-bbf2-8f8e3b2d712c.png?v=1715856347&width=1100)
If you don’t plan and track your auto repair shop's budget properly, you're setting yourself up for failure.
When we developed our strategy pack for auto repair shop owners, we saw a lot of shop owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your auto repair shop's finances around and set you on the path to success!
Get the budget tracker tailored for auto repair shops
Most auto repair shop owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for auto repair shops
Here is an example of a (very) detailed budget for an auto repair shop, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for repair shop space | $4,000 | $48,000 |
| Electricity | Power consumption for equipment and lighting | $600 | $7,200 |
| Water | Water usage for cleaning and maintenance | $150 | $1,800 |
| Gas | Gas for heating and equipment | $250 | $3,000 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $150 | $1,800 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Lead Mechanic | 1 | $4,500 | $4,500 | $54,000 |
| Mechanics | 3 | $3,000 | $9,000 | $108,000 |
| Apprentices | 2 | $2,000 | $4,000 | $48,000 |
| Service Advisor | 1 | $3,500 | $3,500 | $42,000 |
| Receptionist | 1 | $2,500 | $2,500 | $30,000 |
| Manager | 1 | $4,000 | $4,000 | $48,000 |
3. Parts & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Parts Inventory | Auto parts, tires, batteries, etc. | $8,000 | $96,000 |
| Lubricants & Fluids | Oils, coolants, brake fluids, etc. | $1,500 | $18,000 |
| Tools & Equipment | Hand tools, diagnostic equipment, etc. | $1,000 | $12,000 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $200 | $2,400 |
| Office Supplies | Stationery, printer ink, etc. | $150 | $1,800 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $400 | $4,800 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of repair equipment | $500 | $6,000 |
| Uniforms | Staff uniforms and safety gear | $200 | $2,400 |
| Licenses & Permits | Business licenses, environmental permits, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some auto repair shops make 5x more profit than you!
We have studied the strategies of the best auto repair shops in the world. Replicate them now!
What are the biggest expenses for an auto repair shop?
Be careful with these pitfalls. Here are five major costs every auto repair shop owner needs to consider, along with some tips on how to handle them wisely.
- Parts and supplies costsThese can take a significant portion of your budget. You're dealing with various parts that can vary in price based on availability, quality, and brand. To keep these costs in check, focus on bulk purchasing, negotiate better prices with suppliers, and manage your inventory efficiently. It's easy to overspend by stocking too many parts or opting for high-end components that don’t add enough value.
- The staff at your auto repair shopYour technicians and support staff are your backbone, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need skilled employees to provide quality service and keep things running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor service.
- Rent and utilities of your auto repair shopPrime locations come with high rent, but they can attract more customers. Utilities like electricity, gas, and water are essential but add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient equipment and lighting. Overspending often happens when you choose a location that's too big or too fancy for your needs.
- MarketingYou need to get the word out about your auto repair shop, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we give in our pack. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Tools and equipment maintenance costsThis includes everything from diagnostic tools to repair machinery. These are expensive because quality equipment and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient tools and maintaining them regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your auto repair shop?
Here are practical tips to help you, as an auto repair shop owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Parts and Supplies | Partner with local suppliers for quality parts at competitive prices. |
| Labor Costs | Implement a scheduling software to optimize technician hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient equipment in your shop. |
| Marketing | Run social media contests for your auto repair shop and collaborate with local influencers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Waste Disposal | Use cost-effective, eco-friendly waste disposal methods and recycle where possible. |
| Tools and Equipment | Purchase high-quality, durable tools that can withstand frequent use. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a waste tracking system to minimize waste and recycle used parts. |
| Technology | Invest in multi-functional diagnostic tools and utilize shop management software for appointments and inventory. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan parts delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce overstocking. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Customer Waiting Area | Use a streaming service for background music and offer complimentary refreshments to enhance customer experience. |
Copy the tactics of the best auto repair shops in the world!
There are auto repair shops that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for an auto repair shop
Yes, some expenses for your auto repair shop are just unnecessary. They don't contribute to increasing revenue or improving customer satisfaction.
| Auto Repair Shop Expense | Reason It's Useless |
|---|---|
| Luxury Waiting Area Furniture | Overly lavish furniture in the waiting area doesn't necessarily attract more customers and can be a drain on the budget. |
| Premium Coffee Machines | Unless you are a high-end service center, most customers are satisfied with basic coffee options. |
| Excessive Tool Inventory | Having too many specialized tools increases inventory costs and leads to more maintenance expenses. |
| Top-of-the-Line Diagnostic Equipment | High-end diagnostic tools are not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your auto repair shop. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for magazines or streaming services often go unnoticed by customers. |
| Exclusive Parts | Using rare parts can inflate costs and complicate supply chains. |
| Costly Office Furniture | High-end office furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Stationery | Personalized stationery is a minor detail that most customers overlook, and it can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Service Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Decorations | Elaborate decorations are often ignored by customers and add to the cost. |
| High-End Tools | Luxury tools are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Marketing Materials | Frequently redesigning marketing materials is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Service Equipment | Specialized service equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your auto repair shop!
Managing a budget for an auto repair shop when funds are tight can feel like a nightmare. It's like being stuck in a traffic jam where any unexpected expense can bring your business to a halt.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your shop.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of auto repair shops just like yours. Get them now!
Make your auto repair shop more profitable
We have studied the strategies of the best auto repair shops in the world. All their tactics are explained in our pack!
