How Much Does an Owner of a Mechanic Shop Make?

On average, your boss’ salary as a mechanic in Australia is at least four times more than yours if you just started working in the field. Although even if you just finished training school, you can easily find work as a mechanic in Australia. Your starting salary is usually lower than the average salary for mechanics because you begin with an entry-level salary, as is typical for most jobs. Most mechanics start with an average salary of about 22,700 AUD, with a median salary of about 33,200 AUD. That’s if you work for someone else. You’ll need to do that to build experience, but once you build your experience up, you might consider opening your own automotive repair or mechanic’s shop, which is a profitable business in Australia.

Most repair shop owners earn at least 100,000 AUD, but that depends on a few factors. Auto repair shop owners can make up to 500,000 AUD per year, but they own large shops taking high-capacity orders.

In truth, you decide how much your business earns because you create your business strategies, and your own diligence determines their success. Of course, other factors, like COVID-19, affect how much your auto repair shop earns. But ultimately, you decide how much you want to earn per year, then work to attract that much business as a minimum.

Determining Your Salary

Let’s say you decide to earn 150,000 per year. That sounds like a lot of money when you think of it in annual terms, so let’s break it down into more manageable numbers. Divide that figure by 12 months to determine your average salary per month.

150,000/12 = 12,500

You would need to make 12,500 AUD each month to reach your goal. That number still sounds large to many people, so let’s make it even more manageable.

Suppose you want a day off each week. You know you need to open your automotive garage at least one weekend day because many individuals need to do business on the weekend. Doing this allows you to earn more money by serving the customers than the businesses only open five days per week don’t accommodate. With 52 weeks in a year and six days per week that you open your automotive garage shop, you’ll work 312 days per year.

So divide either:

  • your annual salary by 312,
  • your annual salary by the number of weeks in the year,
  • your monthly salary by the number of weeks in the month.

These methods typically come up with slightly different answers, but either result gets you the information you need to set your hourly rate and determine how much work you need to bring in each week.

Annual Salary by 312 Days

150,000/312 = 480.76

You need to earn 480.76 AUD per day.

Annual Salary Divided by Work Weeks

150,000/52 = 2,884.61

You need to earn 2,884.61 AUD per week.

Monthly Salary by the Number of Weeks in the Month

12,500/4.3 = 2,906.97

You need to earn 2,906.97 AUD per week.

Using any of these figures lets you, the auto repair shop owner, easily set your rate. The typical work day consists of eight hours. That means you divide the daily rate, for example, by eight.

480.76/8 = 60.09

You need to earn 60.09 AUD per hour to earn 150,000 AUD per year.

While it may seem taxing to calculate all this maths, you’ve just planned a lot of the maths required for your business plan. The budgeting process is the foundation for all other pieces of your business plan. You can’t set a strategy for marketing or business processes without knowing how much money you need to make.

Here’s a word of caution. The figures above assume you open a solopreneurship. If you want to hire other employees, you’ll need to earn more money than that. You also need money for your overhead expenses, such as the location of your auto repair shop. As a mechanic shop owner, you need to purchase business equipment and keep it updated. This also comprises part of your overhead.

Many goes into running an auto repair business, and many factors influence how much you can make and how much you need to make. You make things simpler for yourself if you only want to run a solo shop where you serve all the mechanical repair needs, though as a solopreneur auto repair shop owner, you limit your income.

Factors Affecting Earnings of Owners of Auto Repair Shops

As an auto shop owner, seven factors affect the amount of money you can earn. These include the following items, some of which you may not have the capacity to change.

Location Determines Target Audience

Those located in rural areas or low-income areas won’t get the benefit of a large target audience, as those located in major cities with healthy economies. The number of individuals who own automobiles in your locale also affects the amount you can earn. Even within a city with a good economy, establishing your automotive garage business in a bad neighbourhood or too far out of town degrades your ability to earn money.

Capacity of Your Auto Mechanic Shop

A solopreneur has less capacity than a mechanic’s shop with five full-time mechanics. Also, a difference exists between the capacity of a new business and the capacity of a new business with established procedures and processes run by an experienced mechanic, even with both shops only employing one mechanic – the auto repair shop owner.

Management Style of the Owner of the Auto Repair Shop

The management style of the repair shop owner influences the earning potential of the auto mechanic shop. Good managers or shop owners pay attention to details, provide superb customer service, market their business aggressively using newspaper, online ads, radio, and for bigger businesses, television. Good garage owners earn new business through referrals.

Products and Services Offered

The spare parts available, order processes, and convenience services offered impact earnings. For example, offering complimentary automotive oil change with another service can draw in other business. Your ability to offer rustproofing, undercoating, automotive emissions testing services, etc. can also increase your earnings.

The Business Strategies Affect the Repair Shop Owner’s Salary

The business strategies you use affect your earnings. Partnering with other businesses with similar services can help get your business from their overflow and help you retain business when you overtop your own capacity. Partnering with those who own related businesses, such as auto body repair shops, and those who paint or wrap vehicles, can offer your business new customers. Creating partnerships with auto parts manufacturers or resale shops can also bring you business, since many individuals want to use OEM parts and may need repairs while travelling.

Using the Right Advertising and Marketing Strategies

The advertising and marketing methods used by your automotive garage also impact your earnings. You’ll make more money when you attract new customers with advertising that costs little but reaches your target audience without frustrating them.

For example, few websites use popup ads nowadays because many website visitors complained that the popups impeded their enjoyment of the website’s content. Not wanting to lose their website visitors, those websites stopped offering popup ads. Instead, they switched to banner advertising or column ads that intersperse the advertisements into the website’s copy.

Find out what types of advertising your target audience enjoys or tolerates and only use those specific methods. This strategy encourages them to buy your services in a positive way.

Number of Years of Operation of the Automotive Repair Shop

Older automotive garages with many years of experience tend to earn more money than new shops. The longer you remain in business, the more money you typically earn. True of every business, but especially for those in the auto repair industry, this factor is unlikely to change at the outset. Stick with your auto repair shop, and you can earn more money from it.

Helping Auto Repair Owners Get Started

New auto repair shop owners may find all this daunting. Who knew so much would affect a shop owner’s salary? If you have lots of experience as a mechanic, but none as a shop owner, you need help running your business, especially getting it started.

Turn to Workshop Software whether you just started as an auto body shop owner or mechanic shop owner. This software lets you plug in a few basic numbers and helps you determine everything from the shop owner’s salary to the average salary of other employees to setting overhead for automotive garages.

The software guides you through the process of starting and maintaining auto shops. New garage owners can use the software to create their business plans’ foundation and set up business processes for many types of repair shops.

The program helps auto repair shop owners determine profit margins, set salaries, calculate business equipment costs, and much more, such as accounting integrations. Xero is a popular accounting software that integrates with many other business applications. This allows businesses to save time and money by having all their information in one place. Repco is another example of an integration that can be used to order parts and supplies. This makes it easier for businesses to keep track of their inventory and ensure they have the items they need on hand.

While how much you earn depends on you, you can help understand the variables that influence your earnings and the many costs you’ll incur as a business owner.

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