FAQs Archive %

Q: What is a good profit margin for a repair shop?

There is no single correct number, and any tool that gives you one without knowing your market is guessing. What matters is the shape: under 10% net margin after overhead leaves nothing for a warranty return, a dead part, or a slow month, so a shop running there is fragile even when it looks busy. Between 10% and 25% is workable. Above 25% net you have room to absorb a bad month. Judge your margin against your own break-even and your own costs, not against a figure from someone else's market.

Q: Should I include overhead when pricing a repair?

Yes — this is the single most common pricing mistake in repair. A job priced on parts plus labour only appears profitable while the shop is full. The moment volume drops, overhead does not drop with it, and jobs that looked fine start losing money. Allocating overhead per job tells you your true break-even price: the number below which you should not accept the work at all.

Q: Why is my repair shop busy but not profitable?

Usually one of three things. Your effective hourly rate is below your cost per bench hour, so more volume simply loses money faster. Parts markup is too thin to cover the handling, warranty risk and dead stock that come with stocking parts. Or re-dos and warranty returns are consuming paid hours that never get invoiced — a 10% re-do rate silently removes 10% of your capacity. The calculator on this page separates the first two; the pricing sanity check covers the third.

Q: How do I know if I am charging enough for repairs?

Work out what one hour on your bench actually earns you, then compare it against what you need that hour to earn. Divide the labour portion of the price by the real time the job takes — door to door, including diagnosis and testing, not the optimistic version. Then reduce it by your re-do rate, because time spent on a job that comes back is time you were not paid for. If the resulting figure is below your target hourly rate, you are undercharging, regardless of how busy the shop is.

Q: How should a repair shop set its hourly rate?

Start from what the bench has to cover rather than from what competitors charge. Add your monthly overhead to the fully-loaded cost of the technician, divide by the hours that are genuinely billable in a month — not the hours the shop is open, which is typically 30-40% higher — and add the profit you intend to make. That figure is your floor. Competitor pricing tells you what the market will bear above that floor; it cannot tell you whether you can survive below it.

Q: Why does a low re-do rate matter so much to pricing?

Because re-dos are paid for out of your margin. A job that comes back consumes bench hours a second time while producing no additional revenue, so a 10% re-do rate removes roughly 10% from your effective hourly rate before you have made a single pricing decision. For most shops, cutting re-dos is a larger and faster win than a price rise, and it does not risk a single customer.

Q: Will raising my repair prices lose customers?

Some, yes — and the arithmetic usually still favours the increase. If you are 20% under your target rate, you can lose a meaningful share of jobs and still finish ahead, because the jobs you lose are disproportionately the price-shoppers who consume the most time per rupee. The practical approach is to raise the rate on new work first, keep existing quotes honoured, and watch the effective hourly rate rather than the job count.

Does BytePhase show my real hourly rate automatically?

How do you calculate profit on a repair job?

What is a good profit margin for a repair shop?

Should I include overhead when pricing a repair?

Why is my repair shop busy but not profitable?

What is the difference between markup and margin?

How do I know if I am charging enough for repairs?

How should a repair shop set its hourly rate?

Why does a low re-do rate matter so much to pricing?

Will raising my repair prices lose customers?

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