Why some garage owners earn less than their own staff

Nobody has ever rung me to tell me they’re doing very, very well. Unfortunately, that’s not why people contact me.

They contact me because they’re working 50, 60 hours a week. They’re taking a lot of money, or what seems like a lot of money. But at the end of the week, the end of the month, the end of the quarter, there’s nothing in the bank. Or very little.

Some of them, over a year, take home less than they pay their team. That’s a huge challenge. And it’s not why anybody opens a garage.

I talk about it in this short clip.

Busy isn’t the same as profitable

From the outside, a full workshop looks like a business doing well. Cars in, cars out, phones ringing, money going through the till.

But money coming in isn’t money you keep. The wages, the rent, the parts and everything else get paid first. What’s left, if anything, is yours. There’s a saying I use a lot: revenue is vanity, profit is sanity, and cash is reality.

Repairing the car is the easiest part

The owners who call me aren’t short of skill. They can fix whatever you drive in with.

In fact, repairing the car is the easiest part. It’s all the other things that come with it.

Andy Savva

People are a huge issue in our industry right now, and in the service sector generally. Attracting them and keeping them is a real challenge. Then there are the expectations: from your team, and from vehicle owners. Put all of that on one person and it’s a very, very difficult job.

So owners get overwhelmed. They get isolated. And they lose sight of their business.

It comes back to the foundations

When an owner is in trouble, it nearly always goes back to the same thing. The effort is there and the hours are there. What’s missing are the foundations of business acumen, and the understanding of the finances that should come with them.

That isn’t a criticism. Nobody teaches you the business side when you’re on the tools. But it can be turned around. It’s not easy and it doesn’t happen overnight. It starts with knowing exactly where you are financially.

What to do next

1. Add up everything you took out of the business last year and divide it by the hours you worked. Put that next to what you pay your team per hour.
2. Look at your bank balance at the end of each of the last six months, not your turnover.
3. Write down the jobs only you can do, and the ones you do simply because nobody else has been shown how. That second list is where your time comes back from.
4. Take the free Garage Healthcheck for an honest view of where the business stands, with three practical actions to start on.