How Profitable Are Auto Body Shops?

Why do mechanics charge so much for labor?

The administrative staff needs to be paid too.

Plus just owning the building costs money – for every hour your car is sitting there in the bay, it’s an hour that some other car can’t be there earning them money.

The fee you get charged per hour for labor takes all of those things into account..

How much can you make owning a body shop?

According to Chron.com, the average annual salary for an auto body shop owner is $101,000, although this varies by region.

Is a body shop a good business?

The body shop business can be a very profitable business for the man who doesn’t mind getting out and selling, while making friends with lots and lots of people. If you do not want to do marketing and selling, then do not buy a body shop.

How much does it cost to build an auto shop?

Expect your startup costs to hover around $50,000, including equipment, rental fees and insurance. These are the bare basics: Diagnostic machine, between $5,000 and $10,000. Rental fees for your space, anywhere from $1,500 to $15,000, depending on the size and location.

Do body shops make money?

According to Body Shop Business, profit margins on parts sales typically average between 20 and 28 percent, while labor profit margins range between 50 and 65 percent (Source). Accurately allocating and tracking the amount of time needed to complete jobs is key to running a lean and profitable auto shop.

How do I start my own auto body business?

7 Key Tips for Opening Your Own Auto Body ShopGet The Experience And Knowledge On Auto Repair Industry. … Seek a Location Ideal For Your Work. … Secure Financing. … Buy The Equipment Needed For The Job. … Suppliers of Auto Parts Can Give You Tips for Opening Your Own Auto Body Shop. … Hire People With Experience. … Get Certification, Licenses, and Insurance Cover.

What is the labor rate for auto body work?

Auto repair labor rates vary widely across the country, and even within the same city. As of January 17, 2017, auto repair shops in the AAA Approved Auto Repair network charged between $47 and $215 per hour, based primarily on the shop’s cost of doing business.

Why is mechanic labor so expensive?

Labor Costs Diagnostic Labor – This requires significantly more training than a repair laborer, as well as different tools, both of which require training and exact a significant expense. Repair Labor – This requires a significant amount of training and experience, which master technicians take many years to accrue.

How do I start a successful auto body shop?

Make sure you are one of those trusted auto repair shops.Reduce Your Employee Turnover Rate. … Stand Behind Your Work With Guarantees. … Create An Ethics Statement & Display It Prominently. … Always Reward Your Loyal Customers. … Make Use of An Automotive Appointment Scheduling Software.

What small business make the most money?

Most Profitable Small BusinessesTax Preparation and Bookkeeping. Without needing fancy premises or expensive equipment, tax preparation and bookkeeping services come with low overheads. … Catering Services. … Website Design. … Business Consulting. … Courier Services. … Mobile Hairdresser Services. … Cleaning Services. … Online Tutoring.More items…•

How profitable is an auto repair shop?

According to Body Shop Business, profit margins on parts sales typically average between 20 and 28 percent, while labor profit margins range between 50 and 65 percent. Focus instead on reducing your labor costs by adjusting the benefits you provide, lowering wages or increasing your retail labor prices.

What is a good hourly rate for a mechanic?

Most independent repair shops charge between $70-$90 per hour and most dealerships charge between $80-$125 per hour. If you find a good repair shop that you can trust to do great work and give you excellent service, then be happy to pay them their rate and take your cars to them whenever you need them serviced.

How much is a body shop worth?

The average auto body shop is rather small with some $578,000 in annual revenues and a staff of just over 5….Example: Valuation of an auto body shop using multiples.MultipleMultiple valueBusiness valueLow0.21$463,200High0.92$1,171,100Average0.37$623,100Median0.31$564,5001 more row•Dec 19, 2012

What is the highest paying job in the automotive industry?

Career Options for the Highest-Paying Automotive JobsJob TitleMedian Salary (2018)*Job Growth (2018-2028)*Automotive Body and Glass Repairers$41,3304%Transportation Equipment Painters$42,2805%Industrial Designers$66,5903%Automotive Service Technicians and Mechanics$40,710-1%2 more rows•Jan 18, 2020