Free Shop Tool
Enter your shop’s revenue, costs, and assets to get an instant estimate of what your business is worth. Free, in under two minutes.
Built with the Institute for Automotive Business Excellence, the math runs on one rule: your technicians should cost no more than 40% of your labor revenue.
Tech pay × 1.3 load = Loaded cost → × 2.5 = Effective labor rate needed
Start with technician wages, then add a 30% load for FICA, FUTA, workers’ compensation, and paid time off, because that is what an hour of your tech really costs. Multiply the loaded cost by 2.5 and you have the effective labor rate your shop needs to charge. Why 2.5? Because the other 60% of every labor hour has to cover shop overhead and profit margin, not just payroll.
It works in reverse too. Take the effective labor rate you charge today and multiply by 40%: that is the loaded technician cost you can afford. Divide it by 1.3 and you have the unloaded wage. If your best tech wants more than that number, the rate is the problem, not the tech.
The productivity result goes one step further: loaded cost divided by (100% minus your tech productivity rate). It shows what the hour has to earn once non-productive time is priced in.
No black box here. This mechanic shop valuation calculator prices your shop the way a business broker would: earnings, not equipment.
Revenue - Cost of sales - Overhead = Annual earnings → × 2–3× multiple = Value range
That's how to value an auto repair shop: annual earnings times the shop valuation multiple buyers pay, typically 2-3x, with your assets as the floor.
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