How to Calculate the GP per productive in your workshop

Something that seems to be a point of uncertainty when chatting to DPs is how to determine the Gross Profit (GP) on productive workshop staff.

Donald Christy 2

I have included a basic calculation principle that I have used over the years. It has proven to be pretty accurate from a budgeting and performance management perspective.

The “factor” that I have used is how efficient a tech should be in terms of hours sold versus hours worked. Your factor may be different depending on your franchise.

Working days exclude SA public holidays and weekends.

All the items in yellow are inputs and the items in blue are calculations.

As you can see, the effect on your bottom line is massive if you have vacancies for productive staff, inefficient productive staff and labour rates that are below what the market will accept.

If you want the excel template spreadsheet so that you can insert the inputs that are relevant to your dealership, then please send me your email address via WhatsApp on 0827761887 and I will send it to you.

  • Dealerfloor (dealerfloor.co.za) and I will be publishing regular articles on dealership efficiency. I am really looking forward to sharing ideas with you. Join the conversation by sending a WhatsApp to 082-776-1887 to be added to our group.

GP per Workshop Productive

Technician

Technician

Apprentice

Labour Rate

R1,000

R850

R850

Factor

1.2

1.2

0.5

Hours per day

8.4

8.4

8.4

Factored Hours Per Day

10.08

10.08

4.2

Ave Annual Working Days

248

248

248

Annual Training Days

10

10

40

Annual Sick Leave Days

8

8

8

Annual Leave Days

15

15

15

Net Working days

215

215

185

Labour Sales Per Day

R10,080

R8,568

R3,570

Labour Sales Per Annum

R2,167,200

R1,842,120

R660,450

Salary

R480,000

R360,000

R96,000

Benefits %

30%

30%

30%

Benefits

R144,000

R108,000

R28,800

Incentive %

10%

10%

10%

Incentive

R48,000

R36,000

R9,600

Total Cost to Company

R672,000

R504,000

R134,400

Annual Workshop GP Per Productive

R1,495,200

R1,338,120

R526,050

GP%

69%

73%

80%

Parts to Labour Ratio

50%

50%

50%

Parts Revenue

R1,083,600

R921,060

R330,225

Parts Margin

30%

30%

30%

Parts GP

R325,080

R276,318

R99,068

Total GP

R1,820,280

R1,614,438

R625,118

Total GP per Day

R8,466

R7,509

R3,379

More Dealer News stories

Take a closer look at new vehicle budgeting

Take a closer look at new vehicle budgeting

At some stage in the next twelve months, you are going to be faced with drawing up budgets for the next financial year. Simply taking last year’s performance and adding or subtracting from those numbers for your budget is really easy but mostly ineffective.

  • 23 July 2024