Auto Shop Coaching Blog

How To Build the Perfect Financial Plan for Your Auto Repair Shop

Most auto repair shop owners feel like they’ve been through some of the toughest years ever. We faced COVID as an essential service provider. We faced extreme challenges to our parts availability and increased pricing on everything we need to do the job right. We face continuing issues with the shortage of technicians and the expectations for pay and benefits that come with that shortage. All of this makes it difficult for shop owners to plan for the future, but a solid financial plan for the next 1-3-5 years is a must-have.

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What is a Financial Plan, and Why Does it Matter?

A financial plan is a long-term plan for where you want to be financially, and how you plan to get there. These targeted goals will help you make decisions and even change directions as the market changes.

How to Build a Financial Plan

1. Get Your Books Up to Date

If you are behind in your bookkeeping, get this done ASAP. You must have accurate numbers on where your money is currently going before you can decide where you want it to go. If you only talk to your accountant once a year to do your taxes, ask if they offer year-round services for updating your QuickBooks and checking in at least twice a year to go over your financial reports.

2. Gather your YTD Sales and Productivity Reports

Most modern shop management programs offer you a variety of reports to figure out what your parts margin currently is, what your average parts COGS are, and what your team is billing out in flagged hours each week. This information is what you need to figure out how you will get to the goals you set in your financial plan.

3. Figure Out Your WIN Number

At ATI we often refer to a Win #, which simply means what the owner wants to get out of the business that they don’t currently get out of it. We then figure out what their sales need to be to get that Win# and build the plan from there.

4. Begin Building the Plan Itself

Now that you know where you are and where you want to be, it’s time to build the “map” for how we will get there. This is where we start looking at the details. For instance, can your current labor rate support your payroll? Do you need to adjust your parts pricing? Will we need more people on our team to achieve the goal we have? Do we need more cars? And the list goes on. The more detailed your financial plan, the better decision-making guide it will be for you.

5. Ask for Help

Along with your accountant, ask for help from a fellow business owner, business coach, small business support agency, or take advantage of one of our free shop strategy sessions to help you finetune your plan.

Once you’ve developed your 1-3-5 Year Financial Plan, you can begin to use it to make the right decisions for you and your shop.

Win Number Drill

Having trouble figuring out what your Win # should be? Request our free tool, the Win # Drill, to help! You can also request your free virtual strategy session to find out what ATI can do to help you develop a successful financial plan for your automotive repair shop. 

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Charlene is an Executive Coach at ATI, a Certified Profit First Professional, a former shop owner, and has been coaching since 2014. Charlene helps clients find the right solutions to their challenges and encourages them to make the changes that result in having the life they dreamed about when they got into business ownership.