Who better to speak with about the state of auto repair than shop owners themselves?
This question led AutoLeap, an all-in-one, cloud-based shop management software, to conduct a major survey of North American shops. We spoke with nearly 300 shop owners and managers across the United States and Canada on the most pressing industry topics, including:
● Retirement expectations
● Marketing strategies
● Labor rates & financial profiles
● Shop management criteria
● And much more!
Let's cover our top five takeaways for the auto repair industry.
1. Shops need management software
AutoLeap’s survey asked respondents about the qualities they value in shop management software. Ease of use, price, value for the money, and range of features and functionality were the top items mentioned. Nearly three out of four survey respondents said they want software to save time and increase revenue.
These expectations match the results enjoyed by AutoLeap customers. Independent Hobson research found that AutoLeap customers generated a 1,300% return on their investment in one year. Shop management software will pay immediate dividends for your shop as a no-brainer investment!
2. Shops need to increase their labor rates
AutoLeap’s survey data confirms a suspicion of many industry experts: the auto repair industry doesn't charge enough.
Shop respondents in the survey averaged a standard labor rate of $120 per hour, while only 24% of respondents topped a standard labor rate above $125 per hour.
“I think this labor rate is way too low. As an industry, we don’t value our time enough,” says Jeremy O’Neal, President, National Trainer & Spokesperson at Advisorfix.com.
Lower labor rates will equate to less money for employees. And the industry won't attract qualified technician talent with reduced salary expectations.
That realization brings us to another big industry issue, the technician shortage.
3. Shops need to help solve the technician shortage
Our survey findings validate the severity of an issue many auto repair shops face.
Nearly three out of four survey respondents said they are concerned about the industry’s lack of available skilled technicians. Additionally, 60% of respondents said they still struggle to hire for roles in their shop. Demand for shop employment does remain high, with 73% of survey participants intent on hiring at least one technician over the next 12 months.
So how does the industry tackle such a large and complex problem? Industry experts reacting to our survey data provided these suggestions:
1. Increase average salaries, benefits, and earnings
2. Promote the appealing aspects of auto repair to younger generations
3. Provide the necessary technician tools and a healthy workplace environment
"We have to make the technician role cool and make it pay, or the industry is in trouble," adds Cecil Bullard, CEO at the Institute for Automotive Business Excellence.
It will take a collective effort to achieve these goals. But each shop can play a role in solving the technician shortage.
4. Shops need to prepare for looming retirements
A change in leadership is on the horizon for many auto repair shops.
We found that 64% of survey respondents expect to retire over the next 10 years. Additionally, 85% of respondents either plan to sell their business or pass it down to family, friends, or a close colleague upon retirement.
With most shop owners eyeing the finish line in their careers, succession planning will come into focus. “Understanding and planning for succession are important, even if retirement is still far, far away," says Tricia Sauls, Executive Director at Automotive Service & Tire Alliance (ASTA).
5. Shops need to base marketing budgets on sales targets
Are you still refining your marketing plans for 2023? If you don't know how much to budget for expenses, our survey provides insight into common shop approaches.
Respondents indicated that 60% of shops spent $2,000 or more on marketing last year. On the lowest end, 17% of surveyed shops spent less than $100 on annual marketing. For the most expensive budgets, 17% of shops spent $25,000 or more on marketing campaigns.
With this wide range of marketing budgets across North American shops, what is the right answer? It depends! But benchmarks exist, and most experts we spoke with recommend basing your budget on target sales for the year.
“A shop that wants to do $1 million in sales needs to spend $30,000 – $50,000 per year on their marketing budget,” says Chris Cotton, Owner of AutoFix Auto Shop Coaching.
Wrapping up
Download our full report for more revealing survey takeaways and expert insights.
To explore AutoLeap’s software, visit our website or request a free demo today.
