Independent repair shops do not need the complexity of large chains, but they do need better structure around the numbers that drive performance, according to an industry leader.
Anders Gustafson, co‑founder of ShopLevers, said larger chains rely heavily on data to guide decisions and reinforce behaviour, even if the sheer volume of information can appear overwhelming.
“It is a little ridiculous just how much data and numbers and stuff that they are using,” Gustafson said.
Speaking at the MWACA Hi‑Tech Training and Vision Expo, he said the lesson for independent shops is not to replicate that complexity, but to focus on a handful of key metrics that provide clarity.
“We don’t need everything, but we need a balanced scorecard,” Gustafson said at the event in Kansas City.
He recommended shops track core measures such as car count, average repair order, gross profit and daily cash flow. Those figures provide a snapshot of whether the business is performing as expected but must be paired with deeper analysis to identify root causes.
“If something on my scorecard is not going the way that I want, try to figure out why,” Gustafson explained.
Many shop owners set revenue goals without understanding the underlying drivers needed to achieve them. Breaking goals into measurable components, he said, allows owners to manage performance more effectively.
“Goals are destinations, budgets are roadmaps,” Gustafson said.
Large chains also excel at linking performance metrics to incentives and behaviour, he added. By rewarding specific outcomes, they reinforce consistency across locations and teams.
“What gets rewarded gets repeated,” Gustafson said.
He also cautioned against viewing non‑operational functions such as marketing, finance and administration as expendable overhead. While those functions may not directly generate revenue, they are essential to building a scalable business.
“If it doesn’t touch a car, it’s just an expense,” he said, describing a common mindset among independents. “That is the trap that we get caught in.”
Instead, he encouraged shop owners to see those areas as part of the engine that drives growth, not as optional extras.
“These are functions,” Gustafson said. “They are part of the business.”
By adopting a more disciplined and structured approach to data, independent operators can make better decisions without needing the full infrastructure of a national chain.
“Take what we can from it,” Gustafson said, “and use it to our advantage.”
Image credit: Depositphotos.com
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Why would we look at car counts and average repair orders. What difference does it make if I fix 10 cars in 7.8 hours and make $1000 or I fix one car in 7.8 hours and make $1000. Bottom line is I made a $1000 in revenue. If a customer needs a head light bulb, are you going to sell him $1000 of extra work, or are you going to just sell him a headlight bulb? If you don’t upsell him its going to throw your car count and average repair order out of wack. I set my parts gross profit with a weave. If your just starting out you may want to have your gross profit and labour rate slightly lower than average to attract customers. I then monitor my parts to labour ratios. As parts cost prices go up my parts to labour ratio goes out of wack, so I need to raise my labour rate. Also if the cost of expenses goes up so does my labour rate obviously. You then toggle up your parts gross profit and labour rates individually and gradually as you remain in business. Finally if you monitor your customer retention rate, you can see if you are losing customers requiring advertisement and possibly remarketing your business. But with the way the automotive industry is operating today this is not an issue for me. If you are operating a successful business like mine, you don’t have to worry because every customer we lose for what ever reason, there is 10 more coming through the door looking for what we can provide them with. You could also monitor your average year of vehicle your working on to know if your techs need to update their skills, but I don’t do that because I am in the bay and am on the heartbeat of the business. There is enough work out there for everyone as long as your willing to work for it.
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Robert misses the point entirely. “Why would we look at car counts and average repair orders. What difference does it make if I fix 10 cars in 7.8 hours and make $1000 or I fix one car in 7.8 hours and make $1000. Bottom line is I made a $1000 in revenue.”
If you do big jobs, (as we do ) it changes your planning, tooling, and Techs. If you push all that off, and just do LHF, you may only need B Techs, and guidance. Training changes, pay can change drastically. Oversimplifying this will get you in a box. What if the LHF drops off, do you do fleet? Take in bigger jobs? It ALL matters. If you are a One or two man shop, you can brain manage this to some extent, but if you grow, big trouble if you don’t account for all of it.
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I understand your point Thomas, but what you are missing is there are two ways to operate an aftermarket shop. You can operate it as a small business type or a corporate type. Many of my generation shop owners operate it as a small business type and have no desire to grow our businesses into a huge conglomerate. Most of us just want to grow and plateau our business. I would like to know what the corporate type aftermarket automotive business end games are? Who is going to be able to afford to buy out these huge shops. It wont be a 10-15 year skilled technician. So now an individual has to decide do I want to become a technician and work for corporate or go get an ivy league business degree and manage people. Its a different skill set, but I would say the same amount of brain power is required if not even more for the technician, just a huge difference in pay grade.
Its not just the aftermarket automotive industry being taken over by corporate. Dealerships, body shops, veterinarians, funeral homes etc. are all being bought up and corporatized. As the “Right to Repair” emphasizes that the aftermarket automotive industry makes a level playing field towards OEM manufactures, so does small business against corporate enterprises. Small business is the back bone of the economy. This “bigger is better” business model that has been preached to us for more than 35 years is going to ruin this industry. We are already seeing the downward spiral with the technician shortage issues. There is no doubt that corporate generates more revenue than my little shop, but they don’t do it on my expenses and there is no way they can compete with me, not in my town anyways. Maybe I am just an anomaly.
Finally to comment on your insinuation that my shop must only do low hanging fruit jobs, because I spend most of my days in a bay creating revenue rather than an office micro managing numbers. I assure you I have done my fair share of “big jobs” in my career, but those jobs are fading due to our throw-away society. Entitled consumers are living beyond their means and will purchase a $50,000 vehicle before investing $10,000 into a 10 year old car with 300,000km on it. The American dream of entitlement is coming to an end.
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