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NOW UPDATED FOR 2006!
The most recent benchmarking data for Motor Mechanics is now available, both in print and in downloadable PDF format, with your purchase of the Motor Mechanics Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Motor Mechanics for the financial years up to June 30, 2004. The survey was based on 64 businesses.
Motor mechanic businesses don't vary much in size, even the large ones might only have five people. Naturally they are labour-intensive too, so the overall success of a firm boils down to the confidence that customers have in the quality of work, the pricing of the services so that customers perceive value and convenience of the premises to homes or offices.
Once these are in place, the revenue starts to flow, the referrals happen and the owners can start working on the personnel productivity levels and cost control. If either of these financial indicators get out of line, then profits can evaporate very quickly.
Survey Results
These are the results of a survey of motor mechanics. These results should not be considered to be representative of all motor mechanics in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the motor mechanics in our survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Businesses from metropolitan areas of capital cities and major provincial cities (Newcastle, Gold Coast, etc) represented around 40% of the entire group with a further 36% from rural towns with a population of less than 20,000. The rest were businesses based in larger regional centres (population above 20,000). Around 69% of businesses rented their premises.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 9th highest and 9th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Total Income | $393,278 | $169,864 | $727,384 | | Gross Profit | 54.55% | 42.72% | 66.69% | | Wages & Salaries (staff only, not
owners) | 14.95% | 4.86% | 26.59% | | Rent of Premises# | 4.90% | 2.64% | 6.79% | | Other Occupancy, Lease & Hire Purchases | 2.30% | 0.57% | 4.54% | | Vehicle Operating | 2.38% | 0.62% | 4.51% | | Interest and Bank Charges | 1.98% | 0.49% | 3.46% | | Net Profit (bos*) | 18.14% | 4.87% | 30.60% | | Days' Stock on Hand | 31 | 1 | 90 | | Days' Debtors | 18 | 0 | 36 | | Hourly Charge Rate - trades Staff | $49 | $40 | $60 |
# calculation
excludes those firms which own their premises *(bos) before
owners' salaries and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Advertising & Promotion of up to 10.72%;
- All Insurance Costs of up to 4.30%;
- Other Occupancy Costs of up to 4.03%;
- Repairs and Maintenance of up to 4.02%;
- Staff On Costs of up to 4.58%.
To summarise this, larger businesses had:
- Lower non-salary overheads
- Higher hourly charge rates
- A lower proportion of owners within the total personnel base
- Owners who worked for more hours each year.
The more profitable businesses:
- Tended to be larger;
- Had better personnel productivity;
- Had higher gross profit margins as a result of lower outlays on parts and sub-contracted work, as well as higher hourly rates;
- Had lower non-personnel related overheads;
- Held relatively more stock and also waited longer for customers to pay for work.
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