Why transparently teaching and sharing financial statements may be the most powerful culture-building tool you’re not using.
If you’ve been in this industry for a minute, you’ve probably heard the phrase “winning culture.” It gets tossed around a lot – usually right next to words like teamwork, attitude, and accountability. Posters get printed. Slogans get framed. Core values get laminated and hung in the break room… and yet… culture problems persist.
Turnover remains high. Morale rises and falls with the workload. Comebacks sting more than they should. And somewhere in the background, there’s an unspoken tension between ownership and the team – usually around money.
Which raises an uncomfortable question: What if “winning culture” has less to do with what’s on the wall, and more to do with what’s never explained or worse, what’s hidden and apparently “TOP SECRET?”
That question is at the heart of my upcoming presentation at the ATRA Powertrain EXPO, titled “Winning Culture: From the Curb and Back Again.” And no, before you ask, this isn’t another rah-rah talk about smiling more or working harder.
It’s about something far more practical and far more misunderstood. It’s about financial transparency – profitability, and why the way we talk (or don’t talk) about money inside our shops may be shaping our culture more than we realize.
The Stories People Make Up When We Stay Silent
Let’s start with a simple question – one I often ask technicians, advisors, and even shop owners when I’m teaching, coaching, or consulting:
“Where does your paycheck come from?”
Most people answer hesitatingly – thinking it’s a loaded or trick question.
Some say, “The shop.”
Others say, “The owner.”
A few brave souls say, “Profit.”
Then I will follow up with the real question:
“Okay… then where does profit come from?”
That’s usually met with silent empty stares or some vague reference to coming from sales or customers.
Here’s the problem: when people don’t understand how something works, they don’t stop guessing. They fill in the blanks. And what they fill in is often wildly inaccurate.
It’s not much different than believing electricity comes from the wall socket, milk comes from the grocery store, and – my personal favorite – eggs come from Easter Bunnies.
As absurd as that sounds, many employees (and, frankly, some owners) have never been shown how little of the money flowing through a shop actually becomes profit. So, they assume the rest must be piling up somewhere in the back – maybe being hauled away in a wheelbarrow.
When that belief takes hold, morale fades and culture quietly suffers.
Why Shop Owners Hesitate to Share the Numbers
If transparency is so powerful, why don’t more shop owners practice it?
Because the hesitation is real and often justified.
Here are a few reasons I hear over and over again:
- “They don’t need to know my business.”
- “They’ll misunderstand the numbers.”
- “They’ll think I’m rich… or broke.”
- “What if they use it against me?”
- “I don’t want to open that can of worms.”
Those concerns aren’t foolish. In fact, they’re reasonable. Financial transparency done poorly can create confusion, resentment, or entitlement. Dumping a full P&L on a team with no context is like handing someone a transmission rebuild manual written in another language and saying, “Figure it out.”
But here’s the other side of the coin. Silence guarantees misunderstanding.
If you don’t explain how the money works, your team will invent a story. And nine times out of ten, that story does not favor ownership.
Profit Is Not What Most People Think It Is
One of the most damaging myths in our industry is that profit is a dirty word. And coming in at a close second is the belief that if jobs show gross profit, the shop must be doing well.
It’s simply not true that profit is a dirty word. In fact, it’s ridiculous to even contemplate. Without profit, why would and how could a shop stay in business? Where would customers get their repairs done? Think of the families that would suffer from lost employment. The fact is nobody wins if the shop is not profitable.
Likewise, gross profit on a single job doesn’t pay the rent.
It doesn’t cover insurance.
It doesn’t make payroll.
And it certainly doesn’t guarantee a paycheck next week.
Profit only exists after enough jobs – with enough gross profit – cover all the overhead it takes just to unlock the door and the direct job costs like parts, fluids and shop supplies.
That’s a hard concept for people to grasp if they’ve never been shown the math. And that’s not their fault.
When teams don’t understand this, a few things happen:
- Mistakes feel “small.”
- Comebacks feel “annoying,” and not expensive.
- Being busy feels the same as being profitable.
None of those beliefs lead to a winning culture.
The $500 Mistake That Costs Thousands
Here’s an example I’ll walk through in detail at the EXPO:
Let’s say a mistake or comeback costs $500 in parts. Most people – again, many owners included – assume the shop just needs to sell another $500 job to recover.
But if the shop’s net profit is 15% (which is above average in this industry), the math says otherwise.
That $500 loss requires more than $3,000 in new, error-free sales just to get back to zero.
And that’s only the visible cost. What doesn’t show up on the repair order or the P&L?
- A dissatisfied customer
- Workflow interruptions
- Lost momentum
- Reduced capacity
- Lower morale
When teams understand this – not as blame, but as reality – behavior changes. Accuracy improves. Pride returns. “good enough” quietly leaves the building.
Not because people are afraid… but because they finally understand the effort required to recover from preventable losses.
One of my clients, who openly shares the key financial aspects of his business operations with his team, recently implemented a quality bonus. At the beginning of the month, he sets aside $3,000 to be shared between the team members at the end of the month. However, based on an established schedule, every preventable comeback results in a deduction from the $3,000. The team shares what’s left – if anything.
He claims that the team’s focus on quality changed dramatically. They even came up with internal checks and balances like what they call the “buddy-check” where they openly ask for help and inspect each other’s work before calling the job “done.”
Since implementing this plan, he says, “Quality has gone through the roof!” This idea would have fallen on its face if he wasn’t open with his team about shop financials.
So… What’s a “Reasonable” Profit Anyway?
This is another topic that gets emotional fast – unnecessarily so.
At EXPO, we’ll ask a simple, uncomfortable question: “How much is reasonable for a shop owner to make?”
Before you answer, consider this: If a transmission shop is worth $500,000, the owner could sell it tomorrow, invest that money conservatively, and earn 8–10% annually – without employees, customers, comebacks, or sleepless nights.
That’s $40,000 to $50,000 a year for doing nothing other than making a passive investment.
Now add the actual job of owning and operating a shop: hiring, training, liability, payroll risk, customer responsibility, equipment investment as well as the role the owner plays in the shop’s day-to-day operation.
Is $100,000 a year unreasonable compensation for that job?
Put the two together, and a very reasonable annual owner income lands around $150,000.
Here’s the kicker: At a 15% net profit, the shop must sell and properly produce about $1,000,000 per year to support that outcome.
If it can’t… why would anyone take on the risk? That’s not greed. That’s math.
Where Transparency Meets Opportunity
Now here’s where things get interesting, and where transparency stops being scary and starts becoming powerful.
When teams understand:
- How profit actually works;
- What it takes to cover overhead;
- Why accuracy and flow matter;
- What “winning” really looks like;
Something new becomes possible. Profit Sharing.
Not necessarily as a formal plan, but in some understandable form. Not as a gimmick. Not as a bribe. But as a logical extension of shared understanding.
If the team knows there is a clearly defined profit goal – and understands that once that goal is achieved, surplus profits exist – then ownership also understands why sharing them might make sense, this possibility can become reality.
More importantly, they understand what it takes to get there. Transparency turns profit sharing from entitlement into ownership.
Why This Conversation Changes Culture
Winning culture isn’t about squeezing more production out of people. It’s about helping them understand why what they do matters, how it affects everyone else in the shop, and how shared responsibility leads to shared wins.
When people know the rules of the game and how the score is kept, they stop guessing. They stop resenting. They start participating.
That’s what we’ll unpack at the ATRA POWERTRAIN EXPO this coming August 26th – 30th in San Antonio, Texas.
Not with spreadsheets and accounting jargon, but with plain language, real shop math, and examples every shop owner, advisor, and technician can relate to.
You’ll even get a PowerPoint slide deck that you can take back to your shop to guide you through a team meeting on understanding shop profitability.
I won’t spill all the popcorn here. But if you care about culture, retention, profitability, and building a shop that’s worth owning – and working in – you’ll want to be in that room.
Because winning culture isn’t sayings on the wall – it’s in the math.
Cutting costs increases profit. Take advantage of “Earlybird Discounts” when you sign up for the EXPO by May 31st.
About the author — Thom Tschetter has served our industry for over four decades. His article topics come from our readers and Thom’s years as a speaker, writer, certified arbitrator, business consultant, and his own inthe-trenches experiences. Thom owned a chain of award-winning transmission shops in Washington State, and ATRA presented him with a Lifetime Achievement Award for his years of training for the transmission industry.
