What is Your Average Repair Order (ARO) vs Hours Per Repair Order (HPRO)

At the recent ProfitBoost Annual Retreat ,one of the most engaging breakout sessionsdiscussed the validity of tracking average repair order (ARO). The general consensus from the room was that ARO can be misleading. However, it was quickly determined that hours per repair order (HPRO) was a much more accurate statistic to measure.

Now the next question is “What is an acceptable amount of HPRO?” The thought process here was very cool. The ProfitBoostweb-based auto repair softwareusers never fail to impress me.

The first question is “What is your business model?” There are several different business models in our industry and each type could possibly have a different standard regarding financial performance. Here are a few examples:

• General repair shops performing a significant amount of lube services or smog checks.
• Transmission shops that process vehicles in the traditional in-house rebuild method.
• Transmission shops that offer general repair and service options to their clients in an effort to be a total car care facility.
• Transmission shop installing remanufactured transmissions.

Each one of these business models could possibly have a different acceptable level of HPRO. The fact is that each business has its own unique business model and its own HRPO level. The HPRO should be established and then measured. If you adopt a change in the business model that should have an impact on HPRO, it can quickly be measured in order to validate the change.

For the sake of this article, let’s assume you have an establish HPRO and you want to understand how to improve it. Here are some simple areas that can affect HPRO:

• Sales skills – Does your entire staff have proper sales training?
• Lack of opportunity – Do you have a robust enough marketing activity to keep the shop full of new vehicles with owners in your ideal client demographics?
• Proper vehicle processing – Do you have a vehicle inspection process for identifying additional sales or services that can be offered to the client while the vehicle is at your shop?
• Technician productivity –Do you have available hours to sell?

To better understand and measure your HPRO, you are going to need one of two things: either one heck of a slide rule or a great auto repair software program. And here is my short and sweet one line commercial... “Why Profitboost?Because it works.”And you won’t need that slide rule.

To wrap this up, delving into your business and measuring and monitoring the financial activity in a business allows you to gain insight into the financial indicators that assist you to grow and realize the success that automotive repair industry has to offer.

So ask yourself, what is your ARO?