| To determine your equipment profit potential: 1. Determine Your Equipment Cost ( from a cost analysis )
Example: (Smog Dyno)
Net Equipment Cost of $50,000.00 (approx)
Divided by 8 years = $6250 per year
Divided by 12 months = $521.83 per month
Divided by 26 working days = $20.00 cost per day.
2. Break Even Analysis & Profit Potential
Example:
Net Equipment Cost per day of $20.00
Plus direct expenses per day of $160.00
(technician wages, FICA, FUTA, uniforms, Workers Comp, etc.)
Times working days monthly (26)
Equals total per month direct expenses of $4,680.00
Total direct expenses of $4,680.00
Divided by Smog Check Charge of $30.00 ( using a Smog Machine for this
example)
Equals number of smog tests required to break even (156 per month )
Divided by working days open monthly for smog checks (26)
Equals number of tests required daily (6)
Break Even: $30 smog check fee times 6 daily times 26 days
open = $4,680.00
* Keep in mind that this example is on smog check labor only
and that the technician will work more than the 3 hours on smog checks (6@30 min each).
Most shops have the tech performing other services and repairs which will bring down the
technician wages against the actual smog checks done.
Additional Product or Labor Sales
Equipment
/ Parts Labor Relationship
In addition to the specific equipment related sales made, related sales
can be generated by having this equipment. For example, by adding alignment equipment,
additional tire sales, and tire related labor are generated. Front end parts sales also
increase as does the installation labor.
By adding emissions equipment, sales of related engine parts and labor
to install also increase. To remain in business beyond the year 2008 is going to require
capital investments in the service department of our business. Failure to do this will
result in our inability to work on our customers automobiles.
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