Two years ago (June 2023), I wrote an article that focused on shop throughput. It centered on the results of a survey ATRA conducted, focusing on key metrics such as the number of lifts, R&R techs, and round trips per month. The results were broken down into shops with 2-4 bays, 5-7 bays, and eight or more bays. The results were not all that surprising, but as Lord Kelvin, a 19th-century scientist, said, “To measure is to know.” Couple that with 19th-century author and mathematician Lewis Carrol’s famous quote, “If you don’t know where you’re going, any road will get you there,” and you have the essence of the piece.
We learned from that study about the performance of shops across the country. It offered the insight necessary for readers to examine their performance against average shops, high-performing shops, and lower-performing shops. The 2025 survey and study provide a similar type of insight, with a focus not only on capacity and throughput but also on shop and employee pay rates. We’ll touch on a few of the jewels we discovered here, with a fuller examination next month at ATRA’s Powertrain Expo.
I’ve been to hundreds of shops across the US and Canada, and one thing I’ve observed is that successful business owners do things “On Purpose, With Intent.” On purpose means not by accident. With Intent means your actions are aimed at a specific effect, result, or objective. Generally, what they’re looking for results in greater profitability and customer satisfaction. But as we’ve discussed in other articles, profit is an outcome. It happens because of other intentional actions. Something else I’ve observed is that successful shops generally have a higher shop labor rate. Let’s look at a couple of charts and see what we can learn from them.
The chart in Figure 1 shows the shop labor rate of our study participants. I have a standard approach when I examine data. First, I’ll eliminate outliers where the participant may have pressed an extra key, or the entry doesn’t make sense compared to the body of data. Then I’ll measure the average, and one standard deviation, plus and minus. I know it sounds boring, but this establishes the boundaries of 67% of the data. It’s a great way to use data for goal setting and analyzing performance.
THE CHART REVEALS THE FOLLOWING:
The average shop labor rate is $144.12. The shops in the upper tier have a rate between $144.12 and $172.34. The lower tier is between $144.12 and $115.90. To go one step further, I included the highest and lowest shop labor rates from the collection. Now, you may think that the highest rate would be in a large metropolitan city like San Francisco, Los Angeles, or Chicago. But it comes from a shop in Texas with a population of about 130,000. To add more perspective, I polled Grok AI for shop labor rates, and it returned the chart in Figure 2. There’s not enough here to draw any conclusions about what a shop might command for labor rates, so let’s dig deeper.
I looked at the shop size based on the number of lifts. Our participants ranged from two to 23 lifts. Figure 3 is the chart from that query. While there’s a lot of data in the chart, I’d like to draw your attention to the circled area. These shops range from two to 18 lifts, with a shop labor rate around $175 an hour. This reminds me of a man I worked for as a rebuilder in the California Bay Area. He started with one shop and worked his way to three. This is not a criticism, but he wasn’t all that organized and reacted to matters as they came. Expanding to three shops only increased the number of fires he dealt with each day. He finally suffered a heart attack and lost all three shops.
After recovering, he decided one shop was enough; it was all he could handle without overstressing. It was a small, two-bay shop with him as the rebuilder and one R&R tech. He was an aviator, and from that small shop, he was able to afford a twin-engine aircraft and a Pitts aerobatic plane. He kept both in a hanger. 
This was about eight years after I worked for him, and when I visited him, he was much happier than when he owned three shops. I had the pleasure of going on an aerobatic flight with him. On one of the maneuvers, I passed out from the G force. Conversely, Peter Fink, the founder and owner of Certified Transmission, has over a dozen shops and a remanufacturing empire. He’d likely identify and fix the troubles in those three shops within a week. This is not a criticism of my former boss. He was a good man and meant well. What he did, though, was examine who he was, what he wanted, and what he was capable of. It turned out that having a paid hobby was more fulfilling for him.
Getting back to the survey results. So far, we don’t have a clear correlation between shop characteristics and what a shop charges for its work. And while we don’t see a clear indication of what influences shop rates, we can have confidence in what doesn’t matter. The critical reason for this is that too often, a shop owner will assign their situation to things outside of their control.
Let’s continue. Next, we examined the number of cars in the shop. This might answer the question of potential. That is, if a shop has a parking lot full of vehicles and the bays are full, then there’s greater potential for business success. It certainly doesn’t guarantee it; the cars might sit for weeks. Figure 4 shows the number of vehicles compared to the hourly rate. The diagram shows a high concentration in the eight to 25 car range, with a span of labor rates. Now, there was an entry of 150 cars, but I excluded it for the sake of the chart.
This chart reveals a generally healthy level of work across the board, but it doesn’t help us with workflow or throughput because having 15 cars in a six-bay shop is different from having 15 cars in a 20-bay shop. For this, we’ll use the lot-to-shop percentage.
Figure 5 reveals a bit more. This chart shows the percentage of cars in the parking lot, compared to the shop. For example, if a six-bay shop had a 50% lot rate, then there’d be six cars in the shop and six in the lot. These are in various stages. They may be waiting for a diagnosis, waiting for parts, and completed jobs. Given that, on average, one R&R tech can round-trip a little more than three jobs per week, then two techs can turn over this shop once a week. The only thing that changes now with shop size is the number of cars and the number of techs. But notice the concentration average in the chart is around 65%. At this rate, it takes two or three weeks to turn over the shop. At higher rates, such as 90%, it would take close to two months to turn over the entire shop. Notice, too, that the shop/lot percentage doesn’t show a correlation to shop labor rate.
I worked at a high-lot percentage shop, with the parking lot full and an annex lot, for about 40 cars, mostly filled. I didn’t have the wherewithal to examine or understand the numbers, but we spent a lot of time pushing vehicles in and out of the shop. Cars sat for weeks in the annex lot, waiting to get in line for a transmission removal or other work. It was chaos, and more than once, I forgot where I was in the rebuilding process and missed things. These have a way of revealing themselves soon after the transmission gets back in the car. This is an example of what can happen when you have an aggressive sales agent managing the shop.
We’ve just scratched the surface of how data can show much more than simple numbers. The depth needed to get more out of this data is beyond what we can cover here. A simple exercise is for you to see where your shop compares to these numbers. It’ll get you thinking about the details of running your business.
Next month, at ATRA’s Powertrain Expo, Rodger Bland and I will conduct a workshop as the kickoff program on Wednesday, September 3rd. We’ll go through the remainder of the service results (including employee pay rates), with a deeper excursion into what these numbers can mean to you. We’ll also explore alternative problem-solving approaches, data collection methods, and techniques for uncovering their hidden meanings. See you there.
