Understanding your monthly profit: parts margin and labour
05 Sep 2026 · 1 min read
Many owners see a full workshop and an empty bank account. Profit is not the same as billing.
Two sources of income
- Labour: almost all of it is your margin after salaries.
- Parts: only the difference between buying and selling price is margin.
Monthly costs
Rent, salaries, electricity, internet and consumables must be paid before there is profit.
Look at it every month
Billing minus cost of parts minus expenses = profit. Compare month to month and branch to branch.
Improve it
Better labour pricing through packages, fewer free comebacks, and controlled stock usually help more than cutting prices.