Building a startup takes time, effort, and a lot of determination. You and your team have invested in a great idea, and everyone works diligently to bring new team members, investors, and customers on board. However, the process doesn’t end once the product or service has taken off and gained popularity.
A startup can operate on a lean team, with people wearing multiple hats and taking on extra responsibilities. But as the company grows, it will be time to hire more employees and scale the company to meet demand.
How to scale the business is an enormous question that causes hesitation for many leaders. How do you expand your business offerings and your team without losing the heart and inspiration that helped the startup succeed in the first place?
In my own business, Tekmetric, which offers shop management software for auto repair businesses, I have relied on a few tactics that enabled me—and our whole team—to scale sustainably. Here are four of the most vital.
Understand Your Company’s History
To plan for the future, it’s crucial to have a deep understanding of the past. In Tekmetric’s early days, my five-person team and I were focused on creating a reliable technology—we didn’t necessarily think about the entity we were building along with it. However, our problem solving and determination to succeed would form the foundation of Tekmetric’s identity today.
The journey wasn’t easy. We faced challenges familiar to many startups: lack of interest, the need for financial support, and an imperative to attract the best talent around. We also had a lot to learn about software and how it applied in the automotive industry. In fact, that lack of software knowledge was an enormous setback, and there were times we just wanted to give up.
However, our failures in these early days were extremely important to our later success. Instead of giving up, the team faced our challenges head-on. We developed a new prototype of our product, established procedures to promote customer success, and created a clear structure within the company. And when the time came to grow, we hired talented people who shared our same drive and desire for success.
Those early days resulted in values that still permeate the Tekmetric culture today. When considering your own company, pinpoint your team’s top qualities and trace them back to the beginning. There are several key questions to answer:
What defines your company’s essential identity?
What challenges did you face and how did you overcome them?
What culture have you built—and how can you hire talent that helps preserve that culture over time?
Set Realistic Goals for the Future
Understanding your company’s past allows you to set realistic goals for the future. When setting these goals, it’s important to consider industry standards and your team’s abilities and limitations. To be realistic, your goals must allow you to keep up with industry changes, but they must also align with your team’s capability to succeed.
For example, if you work in the technology industry, you will need to set goals on a shorter timeline so you can keep up with new innovations and quickly changing needs, but you will also need to keep in mind your team’s current skills and limitations.
When Tekmetric sets a goal for monthly sales, we look at each team’s capacity to succeed. The customer success team may have a limited number of shops it can onboard each day, or we may need to account for migration time when transferring data. After identifying the limitations, we can then explore potential solutions that bring us closer to achieving our goals, such as investing in new technology or hiring more customer success team members.
Lean on Your Employees
As the company grows, it becomes more and more difficult for leaders to have a deep knowledge of every facet of the business. As much as you might want to know about—and maybe even control—every little thing going on within the company, there is only so much time in the day and so many places you can be at once. Your growing responsibilities as a leader mean you will be interacting with customers less and focusing more on the overall business.
However, you do have one key resource you will need to rely on more than ever: your team.
Your employees are the magic behind the work your company does each day. They make it possible for your product or service to work seamlessly, and they create successful interactions with customers.
Empower your team to share ideas and shed light on the changes that will be necessary to meet the goals you have established. As your arms and legs, they have intimate knowledge of the company’s abilities and limitations.
By trusting, empowering, and relying on your team, you enable the business to grow—and give them personal investment in the business’s success.
Continue to Grow Personally as a Leader
Finally, you must continue to invest in your own professional growth as your company grows and scales. You are the face of the company, both internally and externally. Your continued growth will allow you to expand your own perspective and learn new techniques to be an effective leader within the company.
Personally, I challenge myself to read at least one leadership book each week. Many of these books have similar messages, and by continuing to read those messages over and over again, they become firmly planted in my brain and daily practices.
I also seek professional coaching through CEO peer groups and business mentors; these offer outside perspectives that help me work through challenges and questions that come up as Tekmetric grows.
Patience is a Virtue
It takes time, energy, and patience to grow a company. At Tekmetric, we recognize that while we’ve had a tremendous amount of success in what feels like a short time, even that didn’t happen overnight.
As you work toward your own company’s growth, don’t lose sight of the excitement and passion that inspired the company’s initial foundation. Set realistic goals and build a team you can trust and rely on. And continue to grow as a leader in your own right.
Scaling doesn’t happen overnight. But with the same hard work and determination that made the startup successful in the first place, you have the potential to grow your company and make even greater achievements in the future.
Find out what shops in your state are charging, and how to set a labor rate that keeps your shop profitable
In the automotive repair industry, your labor rate is more than just a number on an invoice — it is one of the key metrics that drives your business's profitability and overall growth. For shop owners, staying competitive while maintaining healthy margins requires a clear understanding of how labor costs fluctuate across the country. But knowing the national average is only half the picture. The more important question is: how does your shop compare?
Whether you are running a small independent shop or a high-volume operation, knowing where you stand relative to the average labor rate in your state — and against top-performing shops in your market — is essential.
This guide covers the current landscape of automotive repair labor rates across all 50 states, the factors that drive those numbers, and a step-by-step roadmap for setting a rate that supports your shop's long-term success.
Methodology and Key Terms
Tekmetric built this auto repair shop index as a community resource, backed by data from more than 10,000 shops across North America. Shops can use this tool to benchmark themselves and see how they compare state by state.
Key Terms to Know
Labor rate: The retail price per hour charged to the customer for repair services.
Flat-rate: A pricing model where a job is billed based on a predetermined number of hours from a labor guide, regardless of how long the actual repair takes.
Effective labor rate (ELR): The actual amount of labor revenue earned per billed hour after accounting for discounts, menu pricing, and unbilled time.
Understanding these terms will help you interpret the data below and apply it to your specific situation.
Mechanic Labor Rates by State
The average labor rate across the United States is $132 per hour, with the lowest state at $85 per hour and the highest at $197 per hour. Labor rates vary significantly by state, primarily driven by local cost of living and competition.
📊 See How Your Shop Compares — Free
The data below tells you what shops in your state are charging. But the labor rate is only one piece of the picture. The Tekmetric Shop Index lets you benchmark your shop across the four metrics that actually drive profitability — ARO, car count, parts margin, and effective labor rate — against thousands of real shops nationwide.
It's free, takes less than two minutes, and requires no Tekmetric account.
Why do auto repair labor rates vary so widely from state to state? A few key factors drive the differences.
Cost of Living
In states with a higher cost of living, shop owners face higher wages to attract technicians, more expensive rent, and elevated utility and supply costs. Those overhead realities push labor rates up — not because shops are padding their margins, but because the math demands it.
Shop Type and Specialization
Dealerships typically carry the highest labor rates because of their overhead, factory-trained technicians, and reliance on OEM parts. Independent shops often have more pricing flexibility, particularly for routine services like oil changes. Specialty shops — focused on European vehicles, diesel, or performance — tend to command higher rates as well.
A diagnostic job requires a different skill set than a brake job. Shops that employ ASE-certified technicians or master technicians can and should charge accordingly. The rate reflects the expertise required to do the work correctly.
Start with what it actually costs you to have a technician on the floor. This includes:
Wages and overtime
Payroll taxes
Benefits (health insurance, 401k)
Workers' comp and liability insurance
Training and certifications
Divide that total annual cost by the number of billable hours that technician produces in a year. That's your loaded cost — and it doesn't include any profit margin yet.
Step 2: Account for Overhead
Your labor revenue also needs to cover the cost of running the business:
Rent
Utilities and shop supplies
Marketing and software
Taxes
Step 3: Determine Your Target Profit Margin
Tekmetric shops average 65% labor profit margins. If your loaded cost for a technician is $45 per hour and you want a 65% margin, your base labor rate should be at least $128 per hour.
Step 4: Benchmark Against Your Market
Your internal numbers come first, but you can't ignore the local market. If your rate is $128 and every comparable independent in your area is at $100, you need to either clearly justify your value — through better inspections, faster turnaround, stronger communication — or find ways to reduce overhead. Benchmark against shops of similar size, service mix, and geography.
Step 5: Implement a Labor Matrix
Not every repair order is equal. Shops that implement a labor matrix can automatically adjust rates based on job complexity — billing more appropriately for diagnostic work or specialty repairs without manually recalculating every estimate.
Managing labor rates manually is a recipe for inconsistency and missed revenue. Here's how Tekmetric gives you the tools and data to stay ahead.
Know Where You Stand with the Tekmetric Shop Index
Before you can optimize your labor rate, you need to know how your performance compares to other shops. The Tekmetric Shop Index gives you free, instant benchmarking across four metrics: ARO, car count, parts margin, and effective labor rate. Enter your shop's numbers and see exactly where you rank against thousands of shops nationwide — no account required, no sales call, no commitment.
You can't improve what you don't measure. This is where that work starts.
Tekmetric's reporting features give you live visibility into ARO, car count, revenue, and technician productivity — so you always know how your shop is performing, not just at the end of the month.
Custom Labor and Parts Matrices
Tekmetric lets you build a labor matrix that automatically adjusts rates by job type. A custom parts matrix works the same way on the parts side, protecting your margins consistently across every repair order.
Digital Inspections That Justify Your Rate
Tekmetric's digital vehicle inspections let your team send photos and videos of needed repairs directly to a customer's phone. When a customer can see the worn brake pad or the leaking gasket for themselves, they're far more likely to approve the work — and far more comfortable with the rate attached to it.
Accurate Labor Guide Integration
Tekmetric integrates with industry-standard labor guides so your estimates are based on real, accurate times — not guesswork or memory. That means technicians get credited fairly under a flat-rate system, and your service advisers spend less time on paperwork and more time with customers.
Benchmark Your Insights Now
Knowing the average labor rate in your state gives you a useful reference point. But the shops that stay profitable long-term don't stop at state averages — they benchmark continuously, track the right metrics, and make adjustments based on data instead of instinct.
Your labor rate should reflect your actual overhead, your team's capabilities, and the quality of service your customers experience. Use the state data above as a starting point, then go deeper with the Tekmetric Shop Index to see how your shop compares across every metric that drives profitability.
Do you ever wish you could see into the future? As a business owner, being able to predict how much business you will get during a week, a month, or a year can help you make important decisions regarding marketing your services, taking on more work, hiring more employees, or even knowing when to expand your business.
Of course, there are always going to be unforeseen situations. No matter how much technology you have, there’s no surefire way to predict accidents, natural disasters, or other changes in life circumstances. Fortune telling aside, shop owners can use real-time reports to forecast the health of their business and get a sense of how much money their garage is expected to make before the end of a week, month, or year.
Here’s how you can leverage two of Tekmetric’s real-time reports in combination to forecast your shop’s performance and test the decisions you make as a shop owner.
When it comes to auto repair, a great customer experience can make the difference between a customer returning for future repairs or not. At Tekmetric, we recognize the importance of creating an excellent experience for your shop’s customers that meets their expectations and keeps them returning again and again. To accomplish this, we strive to offer a solution that helps you meet four key pillars of the customer experience: convenience, comfort, trust and loyalty.
Convenience
For vehicle owners, choosing the most convenient shop is not necessarily about going to the closest shop. Rather, convenience is a matter of choosing the shop that makes their life easier.
With approximately 50% of all business shopping completed outside of regular business hours, convenience goes a long way – especially when it comes to auto repair. Customers may need to drop their vehicle off and pick it up later, rather than waiting in the lobby. They may even request to complete pick up after business hours. In all cases, convenient solutions can keep the pick-up process smooth and painless for both you and the customer.
Tekmetric’s two-way texting opens the door of convenience for vehicle owners. Two-way texting meets the customer where they are – anytime, anywhere. The vehicle owner can access updates to their repair process through a simple text, even from their office desk. Additionally, two-way texting can integrate with Tekmetric’s text-to-pay feature, so customers can pay from work or home, then come pick up the vehicle at their own convenience.
Comfort
Traditionally, we think of comfort in a physical sense. For example, we might say, “that chair is comfortable.” Customers choose who they do business with based on how comfortable of an experience they receive. Having the tools and resources that ease the tension inherent with getting a vehicle repaired is critical to making a customer feel comfortable. One example that is often overlooked is the payments experience.
With Tekmetric’s “Buy Now, Pay Later,” option, shop owners can offer vehicle owners the opportunity to complete necessary repairs and pay in installments over time. An experience like this can make vehicle repair affordable and comfortable, no matter what the customer’s budget is.
Trust
Trust between an auto repair shop and vehicle owners is paramount. Not only can it make the repair process smoother for all parties during the repair, but it also contributes to building a lasting relationship for future repairs. A customer is more likely to trust you when you have demonstrated that you can create an experience that is convenient, comfortable and transparent.
Digital vehicle inspections (DVIs) are a great opportunity to educate vehicle owners on the health of their car by providing them with recommended repairs accompanied by photos and videos. Through DVIs, technicians can offer a holistic, transparent evaluation of the customer’s vehicle by highlighting both areas in need of repair and parts that are working well. The result? Customers can gain a better understanding of the technician’s findings, making them more likely to approve work – and return for future repairs.
Loyalty
Prioritizing customer convenience, comfort and trust contributes to an enduring sense of customer loyalty. Building loyalty drives your shop’s bottom line in the long term. A good experience for one vehicle owner can lead to a domino effect within their personal network, as they return for future repairs and make referrals to others. Therein lies the hidden gem of long-standing, thriving businesses: strong customer loyalty.
One of the ways to strengthen customer loyalty is through education and clear communication. Our integration with MotoVisuals demonstrates Tekmetric’s commitment to education and clear communication by showing customers what is wrong with their vehicle instead of simply telling them. Informing vehicle owners about the health of their car accompanied with pictures and educational videos creates a dynamic that is forthcoming, honest and geared towards educating the customer while also ensuring the car gets repaired.
A customer-centric approach can drive your shop’s performance and establish an excellent customer experience. Use these four pillars – convenience, comfort, trust and loyalty – to drive your shop, and you will create a seamless experience for your customers from start to finish. Whether it’s meeting them where they are financially or educating them about a repair, you can establish a consistent, excellent experience that attracts and retains loyal customers now and far into the future.
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