Understanding Gross Profit per Hour: The Key to Efficiency, Pricing, and Financial Health [E148]

Chris Cotton Weekly Blitz

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In this podcast episode, Chris Cotton from Auto Fix Auto Shop Coaching discusses the critical role of gross profit per hour as a performance indicator for auto repair shops. He explains how to calculate it and its importance in assessing efficiency, pricing, labor, training needs, and financial health. Chris also highlights its value in staying competitive. The episode includes a nod to the sponsor, Shop Marketing Pros, endorsing their services.

• The importance of gross profit per hour (00:00:05) Chris discusses the significance of gross profit per hour as a key performance indicator for independent auto repair shops.
• Formula for calculating gross profit per hour (00:01:56) Chris explains the formula for calculating gross profit per hour and its role in pricing strategy and efficiency.
• Labor utilization and financial health (00:03:00) Chris emphasizes the importance of labor utilization and how gross profit per hour directly affects a shop's financial health.
• Calculating gross profit per hour (00:05:24) Chris provides examples of calculating gross profit per hour using a spreadsheet and discusses the importance of this metric.
• Measuring efficiency and pricing strategy (00:11:48) Chris explains how gross profit per hour helps measure efficiency, productivity, and pricing strategy in an auto repair shop.
• Competitive edge and conclusion (00:14:48) Chris discusses how a healthy gross profit per hour gives a competitive edge and concludes with a message about the podcast sponsor, Shop Marketing Pros.

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