How to tell whether your repair shop is really making money

The till is full at the end of the month, there is plenty of work, the technicians are busy — so the shop is making money? Not necessarily. Sometimes, after rent, wages, parts and taxes, the owner is left with less than their best technician earns. And sometimes the shop earns decent money, but it is stuck in devices nobody collects and in parts on the shelf. Below is how to work it out without an accounting degree, on a single sheet.

Takings are not profit

Takings are what customers paid. Profit is what is left after all costs. In a repair shop the gap between the two can be huge, because every repair contains a part you bought and work you paid a technician for. So the first rule: look not at the till, but at what each repair leaves you.

What your costs are made of

A shop’s costs fall into two groups.

Variable — they depend on the number of repairs:

• parts you fitted into devices;
• technicians’ commission, if they are paid a share;
• shipping of parts and devices.

Fixed — you pay them every month, even with no repairs at all:

• rent and utilities;
• salaries — front desk, administrator, technicians on a fixed wage;
• taxes, accountant, bank and card fees;
• advertising, website, software, phone;
• tools and equipment spread over their working life: a €1,200 soldering station over three years is about €33 a month.

A separate line is your own pay. If you book devices in or repair them yourself, pay yourself what you would pay someone you hired. Otherwise the shop only “makes money” because you work for free.

What one repair leaves you

Take a typical repair and break it down:

What	Amount
The customer paid	€150
Part	− €50
Technician — 30% of labour (€100)	− €30
Left for fixed costs and profit	€70

Those €70 are not profit. Rent, the front desk and taxes still have to be paid out of them. But this figure — what one repair leaves you — is exactly what tells you how many repairs you need.

Break-even: how many repairs a month you need

Add up your fixed costs for the month. An illustrative example:

• rent — €1,300;
• part-time front desk — €1,400;
• taxes, accountant, bank — €800;
• advertising, phone, software — €400;
• tools and sundries — €600.

That is €4,500 in total. If each repair leaves €70, then €4,500 ÷ €70 ≈ 65. 65 repairs a month is zero: costs covered, no profit. Every repair above that is your profit. This one figure answers a lot of questions at once: can the shop afford a second front desk person, is it time to raise prices, what does a quiet month cost.

The figures in the example are illustrative — put in your own. What matters is not the values but the calculation itself: without it, every decision on prices or hiring is a guess.

Which repairs really pay

The average repair is a useful figure, but it hides the differences between jobs. Work out separately for a few typical repairs how much each leaves and how long it takes. It often turns out that an expensive job with an expensive part earns less than a quick job with no parts, and the “small” repairs technicians dislike earn the most per hour of work.

For example: a screen replacement that leaves €70 takes two hours — €35 an hour. Cleaning and replacing a charging port that leaves €45 takes forty minutes — about €68 an hour. Twice as profitable, though it looks modest in the till. Doing this for five or six typical jobs takes an evening and often changes the price list.

It is just as useful to look at what diagnostics bring in. Free diagnostics with frequent refusals are working hours nobody paid for.

The markup on parts is a separate source

In the example above the part cost the shop €50. But the customer pays more for it inside the repair price — you usually buy cheaper than the customer could, and the difference stays with you. Count separately how much you earned in a month on labour and how much on the difference in parts prices. If the second is noticeably larger than the first, the shop lives off selling parts rather than repairs — and becomes vulnerable the moment customers start bringing their own parts or a supplier raises prices.

When to raise prices

Repair shop prices often stay put for years because the owner is afraid of losing customers. A few signs it is time to review the price list:

• you only get above break-even in your best months;
• the repair queue is consistently longer than a week — demand is higher than you can handle;
• parts and rent have gone up, your prices have not;
• customers never haggle at all — that often means you are cheaper than you need to be.

Raise prices on labour, not “on everything”, and by no more than 10–15% at a time. Keeping the old price for regulars for another month is a good way not to lose them.

Quiet months: a reserve

Most shops are seasonal: fewer repairs after the holidays, more washing machines and air conditioners in summer, more laptops before the school year. Fixed costs do not care about the season. So put aside a reserve of at least one month’s fixed costs from the good months. Then a quiet January is just a quiet January, not a question of how to pay the rent.

Money that is stuck

Even a profitable shop can have no money in the till. Look in three places:

• finished but uncollected devices — the work is done, the part fitted, but no money. Send reminders with a date and put the storage terms on the job sheet;
• handed over without payment — “I’ll bring it tomorrow” from friends, and businesses you invoiced;
• parts on the shelf bought “just in case” that have not moved for months.

Once a month, add up these three amounts. If they are larger than a month’s profit, the problem is not your prices but how the money comes back.

A month on one sheet

Put it all together. The same imaginary shop handed over and was paid for 90 repairs in a month:

What	Amount
Left from repairs: 90 × €70	€6,300
Fixed costs	− €4,500
Your own pay for half-time on the front desk	− €800
Shop profit	€1,000

Without the “your own pay” line, the profit would look like €1,800. The difference is your work, which the shop gets for free. That is why owners are so often surprised: “we’re making money, so where is it?”

What to check every month

• how many repairs were booked in and how many handed over;
• takings from repairs handed over and paid for;
• what one repair leaves you on average;
• fixed costs and how many repairs you are above break-even;
• how many devices are finished but uncollected, and for how much;
• how much each technician did — separately for each.

Six figures are enough to spot a problem in time. The key is to calculate them the same way every month so the months can be compared.

What the software calculates for you

In ServiceCenterSoft the statistics for each branch show how many devices were booked in and handed over in the period, how many were repaired and how many returned unrepaired, how much money came in, and how many devices are in progress, waiting for a part or ready for collection. Below them are revenue and profit: takings from repairs handed over and paid, minus the cost of parts from stock, minus technicians’ and managers’ shares — with the margin as a percentage. The technician report shows each person’s share with a breakdown. That is the first half of the calculation — no calculator needed. How the shares themselves are set up — in how to pay repair technicians.

The second half the software does not track: rent, taxes and other fixed costs are not in it. Count them separately — a one-sheet table is enough: take the profit from the software and subtract the month’s fixed costs. One more thing: a part typed into the estimate by hand rather than taken from stock has no cost price and goes into profit at its full price — so it is better to run parts through the stock. You can look at the reports in the demo.

In short

• Takings are not profit: look at what each repair leaves you.
• Costs are variable and fixed; your own pay is a cost too.
• Fixed costs ÷ what one repair leaves = how many repairs you need to break even.
• Work out a few typical repairs separately — the most profitable ones are often not the ones you think.
• Every month — the money that is stuck: uncollected devices, unpaid repairs, parts on the shelf.