Hello Shop Owners, Sunil Patel, Co-Founder of Tekmetric here. I’m writing this blog because I believe it’s both an honor and a duty to be a leader in business. Recently, I was awarded by Houston Business Journal as a Most Admired CEO of 2020, and this got me thinking about the leadership principles that have helped me along the way and made Tekmetric what it is today.
Not only do I lead a team of great talent, but I also speak with and have the pleasure of doing business with many strong leaders, whether it be shop owners, other entrepreneurs, or even other leaders within the company.
The fact of the matter is that I wouldn’t have been able to build a robust shop management software without my team. Watching them succeed and set each other up for success is hands down the most rewarding part of my job. It’s a privilege to work with talented and innovative individuals that make me proud each and every day. Playing a part in helping them grow and flourish makes me feel like I have served a purpose larger than simply building a product or making money.
Inspired by the HBJ honor, I took the time to sit down and outline a few of the leadership principles that I have always relied on. They focus on listening, learning, and recognizing everyone as an individual. I hope they help you and your team grow as people and as a unit.
1. Listen to Your Team
Good leadership relies on a strong feedback process. Listen to your team, whether it’s an idea or how they’re feeling so that they know you care not only about their contributions but also about them as people.
Once a week, I sit down with the leaders of different departments and simply listen to how things are going. What are the current challenges they’re facing? What are some successes they’re proud of? What do they feel they could use more support with? Giving them the room to voice their concerns, their desires, and their victories provide them with a model for being the best leader they can for the people they lead. Even when we’re hiring new team members, we like to get input from our current team to make sure we’re considering all voices in the process.
No idea is a bad idea. Even the ideas that you never end up using still have value because they can spark other ideas, show your team a new perspective, or simply show the person who voiced them that they were included as part of the team or project.
2. Act on Feedback
Internal feedback is important, too. That’s how I came up with Tekmetric. When I owned and operated an auto repair shop, I realized that there was no easy way to check on things when I was away on vacation or at a conference. I either had to call someone and ask them to read me the numbers or use a VPN and brute force my way into my own system. I thought, “This should be easier.”
I took note of those challenges, then asked myself how I might be able to solve them. I began developing a cloud-based shop management solution that could be accessible from anywhere. My business partner Prasanth and I were able to develop a system that worked, but I realized I could keep innovating and make it better with feedback from other shop owners.
3. Acknowledge Individual Uniqueness
When you have a growing team, you start to notice the different strengths and tendencies of the people you work with. Sometimes you have people who are capable of filling a whole marker board with ideas in a short amount of time. Other people are much more measured and reserved, but when they say something aloud, you better listen, because they have powerful insights. Your technicians know how to get to the heart of what’s going on with the vehicle, but one technician might do it a little differently than the next. Your service advisors all know how to make sure guests are getting what they need, but the little differences in how they operate are all worth observing and learning from. Everyone has their strengths and understanding what each person’s strengths make it easier to maximize their performance in their roles.
Even when we’ve implemented Tekmetric at large companies with hundreds of shops, drawing from the strengths of different players has been invaluable. Corporate executive leaders have a macro-view of how things work that’s critical to our success, but equally critical are the perspectives of our own team members and individual franchise shop owners. The people in the shop every day are the ones who make sure we don’t miss details, and that our system and all the systems it interacts with work for them as they serve their guests. Input from everyone makes for a simple and easy switch.
No matter how someone thinks or expresses what they’re thinking, there’s something to be gained from every team member as long as you have an environment where everyone is respected and you have implemented a healthy feedback process.
4. Never Stop Learning
Feedback is on an ongoing process that never ends and always seeks more refinement. Listening to ourselves, our team, and other shop owners continues to be crucial to ensuring that my business keeps innovating products that can outcompete similar products on the market and help shop owners scale up, be more profitable, and help as many people as possible.
These are just a few principles that we use, but I always encourage leaders to keep adding to and adjusting their mindset because we’re always going to run into new challenges.
G2 gathers the reviews and opinions of real Tekmetric customers and compares them with competitors in the auto repair shop software industry. Awards are based on metrics such as usability, results, and other factors.
For Fall 2025, G2 has awarded Tekmetric with a range of badges, including Momentum Leader, Best Results, Best Usability, Best Realtionship, Most Implementable, and Grid Leader.
These awards reflect our customers' experiences and trust in Tekmetric, highlighting their role in our success.
What These Badges Mean
Momentum Leader: We're leading the pack, constantly evolving to meet the ever-changing needs of the automotive industry.
Best Results & Best Usability: Tekmetric is designed to be intuitive and user-friendly, helping you achieve the results you want.
Most Implementable: Change can be scary – That's why we've made it easy to get started and integrate with Tekmetric so you can hit the ground running.
Grid Leader: This badge showcases how our customers describe Tekmetric as the go-to solution for auto shop management.
Best Relationship: Tekmetric has always been focused on creating a positive experience and relationship with our customers.
Thank You to Our Customers
We couldn't have done it without our customers! Your feedback and support drive us to continually improve and deliver the best possible shop management experience. We're excited to continue this journey with you and can't wait to see what we accomplish together in the future. We'll continue to innovate, listen to your feedback, and provide the tools you need to run your shop.
If you take away anything this month, it's that the Tekmetric Mobile app is now yours! We’re thrilled to have launched this across iOS and Android to make your techs’ lives easier, cutting their inspection time in half. As well, it delivers increased customer trust, ultimately driving up your bottom line.
Other top release highlights include improving the efficiency of Smart Jobs, adding fresh permission settings for increased financial control, speeding up the process of finding parts across your inventory, and making the 10DLC registration process simpler.
If you’re using Tekmessage, please complete your 10DLC registration ASAP.
Starting December 1st, this requirement will be enforced.
Save Time and Drive More Revenue With The Tekmetric Mobile App
Perform inspections from any mobile device, complete with photos and videos, building customer trust and increasing job approval. Tekmetric customers using it today have seen their inspection times cut in half. As well, shops that share digital vehicle inspections (DVIs) with their customers, see an average increase of $15k in revenue per month. With real-time synchronization your team stays coordinated, whether they're under a vehicle or discussing repairs with customers at the front desk.
Minimize the impact of time consuming tasks with these enhancements to our Smart Jobs feature.
Have you ever built a job using Smart Jobs, only to realize you accidentally selected the wrong part? Now you can instantly search PartsTech again without leaving your current job screen - ensuring you always quote the right part at the right price for your customer.
Oil changes are a necessary maintenance to keep any car running. So, it’s no wonder that repair shops offer oil change promotions to get new customers in the door. These promotions are usually for the standard 5 quarts, but what happens when a customer’s car requires extra oil? Smart Jobs will automatically calculate the adjusted price for the extra oil and add it to the estimate. This means no more hassling with a calculator to calculate the additional price tag. Smart jobs will simply provide clear and accurate estimates every time.
Starting December 1st, 10DLC registration will be required for all businesses using 10 digit phone numbers for application-to-person (A2P) messaging. This requirement will impact all customers using Tekmessage. So, we’ve made it easy for you to complete this registration in-platform. This process should take no more than 10 minutes and can be done from the Tekmessage Integration Card on the integrations page.
To ensure your service is not interrupted, please be sure to check your status and complete your enrollment ASAP. The approval process typically takes 2 to 3 weeks. Learn more about 10DLC and how to do this here.
Ensuring shop fees are consistent across all of your locations is critical, especially for maintaining customer trust. This process is now easier than ever to manage using the Multi-Shop dashboard. You can create new fees, edit existing fees, and delete fees across all of your locations. Need to maintain shop-specific pricing? No problem. Individual shops can manage their unique pricing details without impacting universal pricing.
Who’s this for?: All customers with the Multi-Shop add-on.
We heard you when it comes to wanting more control over your finances in Tekmetric, especially for those with lots of employees accessing the platform. Within the payments permission, there’s a new sub-permission for engaging with accounts receivable. By checking this box, the employee will have the ability to send repair orders to accounts receivable.
Tip: This will default to “on” for newly created shop owners and shop admins. If you had employees with the payments permission “on” at the time of the release (10/28/24), this sub-permission was defaulted to “on”.
View Inventory Across All Your Locations From One Place
Locating parts across your network can be extremely cumbersome, especially if you have to hop in and out of shop views. Your Multi-Shop account now brings inventory from all your locations into a single view, saving you time & getting your team back to work quickly. Filter by shop, status, and part type to find what you need in a snap.
Who’s this for?: All customers who have the Multi-Shop add on.
As a shop owner, you aren't just selling a car repair; you are selling expertise, specialized equipment, and peace of mind. If your rates are too low, you’ll struggle to keep the lights on. If they’re too high without the value to back them up, customers may opt for a competitor.
In this guide, we’ll walk through exactly how to find that "sweet spot" for your labor rate so you can build a sustainable, profitable shop.
How much should a mechanic charge per hour?
Mechanic shops should charge a labor rate that is competitive in their area, covers their overhead costs (rent, utilities, employees, etc.), and allows them to maintain a healthy profit margin (40-70%) to run the shop. Whether you are an independent shop or a large dealership, your labor rate and parts markup are your primary vehicles for maintaining profitability.
Key terms to know
Before we dive into the math, we need to understand these concepts.
Loaded labor rate: is the true cost of an employee, including their hourly wage, taxes, benefits, and insurance.
Hourly labor rate pricing: is the "posted" rate—the number your customers see on the repair estimate. It is the flat dollar amount you charge per billable hour.
Flat-Rate pricing: is a system where a specific repair is assigned a predetermined amount of time (e.g., a water pump replacement is "booked" at 3.4 hours). The customer pays for 3.4 hours regardless of whether the auto mechanic finishes in two hours or five.
Effective labor rate (ELR): is the real-world number that matters. It’s calculated by taking your total labor sales and dividing them by the actual hours your technicians worked.
How to set your automotive shop labor rate (step by step)
Setting your rate shouldn't be a guessing game based on what the guy down the street is charging. It should be a data-driven decision. Here is a step-by-step approach to finding your labor rate.
Step 1: Calculate your "loaded" labor cost
First, determine exactly what it costs you to pay an employee. This isn't just their hourly wage. You should include:
Wages and overtime.
Payroll taxes.
Benefits (Health insurance, 401k).
Workers' comp and liability insurance.
Training and certifications.
Any other benefits you provide employees.
Divide this total annual cost by the number of billable hours that the employee produces in a year. This is your "loaded" cost and does not include any profit margin.
Step 2: Account for overhead
Your labor revenue needs to cover more than just the employee. It must also cover the overhead costs of running an auto repair business:
In the automotive industry, labor profit margins vary greatly, but most shops aim for 40-70%. If your loaded cost for a technician is $45 per hour and you want a 65% profit margin, your base mechanic labor rate should be at least $128 per hour.
Step 4: Benchmark against your competition
While your internal numbers should be your primary focus, you shouldn’t ignore the local market. If your labor rate is $128 per hour but every other independent shop in your town is at $100, you need to either justify your value through superior service or find ways to reduce your overhead. Make sure you benchmark against competitors of similar size, services offered, and geographically nearby.
Step 5: Implement a labor matrix
Not every repair order is the same. Many successful shops use a labor guide combined with a labor matrix that slightly increases the rate for more complex jobs or diagnostic work. Shops that perform more specialized repairs or focus on specialty vehicles should heavily consider implementing a labor matrix.
Which factors impact labor rates?
Your rate shouldn't be static. Several external and internal factors will influence how much you can—and should—charge for car repair services.
Location: A higher cost of living in cities like California or New York necessitates higher labor rates compared to rural towns. Your technicians need to earn enough to live nearby.
Shop type: A general auto repair shop usually has lower rates than a specialty Euro shop or a heavy-duty diesel facility. Specialization requires more expensive tools and higher-paid talent.
Certifications: If your team holds advanced ASE certifications or factory training, you provide more value. Customers are often willing to pay more for a repair estimate from a shop they trust to do it right the first time.
Warranty: If you offer a service warranty, you are taking on more risk and can charge more for the peace of mind.
5 Ways Tekmetric can help your shop be more profitable
Tekmetric can help you be more profitable by providing the features and reporting you need to make better business decisions. Tekmetric shops average a 65% labor profit margin by utilizing modern features that help you build trust with your customers and keep them coming back year after year.
Custom labor matrix: Tekmetric allows you to set up labor matrices that automatically adjust your mechanic labor rate. This ensures you don’t undercharge for difficult work.
Real-Time reports: Stop waiting until the end of the month to see if you made money. Tekmetric gives shop owners a real-time look at their gross profit, plus many other helpful metrics.
Measuring effective labor rate: As we discussed, your posted rate isn't always what you take home. Tekmetric tracks your ELR automatically, showing you exactly where "leaks" (like excessive discounting or slow techs) are happening.
Digital Vehicle Inspections (DVI): Higher rates are easier to justify when you can show the customer exactly why they need the work. Tekmetric’s DVIs build trust and increase customer satisfaction, making the price conversation much smoother.
Technician efficiency: By tracking technician efficiency and productivity within the platform, you can see which members of your team are hitting their goals and which employees might need more coaching.
Final thoughts
Setting your labor rate requires constant attention to your local market, your internal costs, and the evolving complexity of car repair. By following these steps, you’ll ensure that your shop doesn't just keep cars running—it keeps your business thriving. If you have questions about Tekmetric or how we can help your shop be more profitable, book your free demo today.
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