COMPLETE REPORT
LEA D E RSH I P 2023 K I P 2023 TECH TOOLS
2023 — SPONSORED BY:
THE 2023 RATCHET+WRENCH INDUSTRY SURVEY:
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2023 Ratchet+Wrench Industry Report
The survey features data from over 400 survey responses submitted by owners and/or managers of independent or franchise auto repair shops, many of which subscribe to Ratchet+Wrench. The goal is to provide a cross-section of today’s independent automotive service industry.
This survey, conducted during the first quarter of 2023, provides readers an opportunity to see the automotive repair industry through individual and comparative data sets grouped categorically and listed within one of four sections within this report: Industy Overview, KPI, Leadership and Tech+Tools.
• Industry Overview: A bird’s-eye view of the general industry identifiers, like background information, shop data, location and average revenue. New to the 2023 survey is a subsection about woman-owned shops.
• KPI: A look inside key performance indicators governing sales and customer service in the front of the shop and efficiency and productivity in the back of the shop.
• Leadership: A glance at how shop owners are staying accountable, running their shops and compensating team technicians.
• Tech+Tools: A peek at how shop owners are investing in the tools, technology, people and information systems necessary to build successful businesses.
For automotive repair shop owners looking to see how their operations stack up within these four areas, the Ratchet+Wrench Industry Survey provides compelling peer-to-peer benchmarks upon which shop owners can measure their metrics against for future success.
2023 RATCHET+WRENCH INDUSTRY SURVEY 2
THE 2023 RATCHET+WRENCH INDUSTRY REPORT PROVIDES AUTO SERVICE PROFESSIONALS INFORMATION REGARDING TRENDS AND INSIGHTS IN THE AUTOMOTIVE REPAIR INDUSTRY
Jack Sann
The Average Respondent
WHAT THE INDUSTRY LOOKS LIKE IN 2023
The average respondent for the 2023 Ratchet+Wrench industry survey is a male in his 50s who owns his shop and became an owner in his 30s. He has over three decades of industry experience, which most likely includes work as either a technician or a manager—or both. He launched his business independently and does not have a parent that was employed by the industry.
2023 RATCHET+WRENCH INDUSTRY SURVEY 3
AGE 30-39 15% 70 or older 8% 40-49 22% 50-59 26% 60-69 27% 20-29 2% GENDER 6% Female 1% Nonconforming 1% Prefer not to answer 92% Male Owner, partner, president or VP 82% Manager 14% Shop foreman or shop supervisor 4% POSITION AGE OF SHOP OWNERSHIP 30-39 37% 40-49 14% 70 or older <1% 50-59 7% Not applicable 10% 60-69 2% 20-29 27% Under 20 3%
The Average Respondent
2023 RATCHET+WRENCH INDUSTRY SURVEY 4
BUSINESS ACQUISITION Pre-existing business purchased from another owner (non-family) 22% Not applicable 12% Other 3% Launched independently 43% Pre-existing business passed down or purchased from family 20% Attended technical/vocational school but did not complete 9% Attended college but did not complete 29% Earned bachelor’s degree 26% Earned master’s degree 3% Earned doctorate <1% Completed high school 27% Attended high school but did not complete 6% EDUCATIONAL BACKGROUND PRIOR INDUSTRY POSITIONS 11% Porter 3% Vendor 35% Service advisor 16% Administrative staff 69% Technician 42% Manager 10% None 1-9 7% 10-19 15% 30-39 25% 20-29 21% 40 or more 32% YEARS IN THE INDUSTRY PARENT INVOLVEMENT IN THE INDUSTRY 33% Yes 67% No
The Average Shop
INSIGHT INTO THE AVERAGE MECHANICAL REPAIR SHOP
Independent shops with an annual revenue between $1 million and $2.5 million are the median business model. Domestic and import specialties were similarly represented.
2023 RATCHET+WRENCH INDUSTRY SURVEY 5
SHOP SPECIALTY SHOP TYPE Hybrid repair 30% EV repair 16% Transmission repair 27% Import repair 76% Diesel repair 32% Domestic repair 80% ANNUAL REVENUE Under $250,000 9% $250,000-$499,999 8% $750,000-$999,999 13% Over $2,500,000 18% $500,000-$749,999 10% $1,000,000-$2,499,999 40% Unknown 2% Franchise 2% Dealer 1% MSO 15% Independent 82% McAnally Moments
Average Shop Setup
INSIGHTS INTO THE INNER WORKINGS OF A TYPICAL SHOP
The majority of respondents reported working in or owning shops of 2,000-4,999 square feet with 3-4 team members. The average number of lifts within these shops was 3-4.
2023 RATCHET+WRENCH INDUSTRY SURVEY 6
NUMBER OF BAYS 1-2 8% 5-6 24% 3-4 25% 7-8 17% 9 or more 26% NUMBER OF EMPLOYEES 1-2 13% 3-4 20% 7-8 18% 11 or more 19% 5-6 18% 9-10 12% NUMBER OF LIFTS 0 3% 1-2 15% 5-6 20% 9 or more 19% 3-4 27% 7-8 16% SHOP SIZE (in square feet) 5,000-9,999 34% Over 15,000 4% 10,000-14,999 9% 2,000-4,999 41% Under 2,000 12%
Location, Location
A LOOK AT HOW SHOPS COLLECTIVELY ARE PERFORMING IN REVENUE, ARO AND CAR COUNT BY GEOGRAPHIC REGION
Auto repair shop owners who responded to the 2023 Ratchet+Wrench Industry survey tend to be from the Northeast or Midwest. Despite being one of the smallest geographic regions, shops in the West lead all other regions in annual revenue, ARO and car count above 300.
Annual Revenue over $1 million: 55%
Average Repair Order Above $400: 72%
Car count above 250: 31%
Annual Revenue over $1 million: 47%
Average Repair Order Above $400: 64% Car count above 250: 35%
Annual Revenue over $1 million: 58%
Average Repair Order Above $400: 74% Car count above 300: 26%
Annual Revenue over $1 million: 64%
Average Repair Order Above $400: 89% Car count above 300: 27%
2023 RATCHET+WRENCH INDUSTRY SURVEY 7
(IA, IL, IN, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI) (CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT, WV) (AL, AR, FL, GA, LA, MS, NC, OK, SC, TN, TX) (AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY)
WEST SOUTH NORTHEAST MIDWEST 30% 19% 29% 22%
Women-Owned Shops
A LOOK AT THE INDUSTRY FOOTPRINT OF WOMEN
The average female shop owner for the 2023 Ratchet+Wrench Industry Survey is between the ages of 30 and 49 who became a shop owner in her 30s. She has approximately two decades of industry experience which most likely includes work as a service advisor or an administrative staff member—though nearly as many have entered without prior experience. Three-quarters are independent repair shop owners with an additional 20% running multishop operations. Most of their shops are between 5,000 and 9,999 square feet with 3-6 bays and lifts. They employ 5-8 team members.
Revenue above $1 million
Average repair order above $400
Car count above 250
Opportunity above $800
Closing ratio of 70% or higher
CSI score of 90% or higher
Posted labor rate above $140
Raised labor rate in past 2 years
Works with a consultant or business coach
Is a member of a 20 group or peer networking group
Attends industry-specific management training at least quarterly
Sends staff to industry-training at least quarterly
40%
It’s long been said that female shop owners emphasize efficency, productivity and running a well-oiled machine. The survey data confirms this.
2023 RATCHET+WRENCH INDUSTRY SURVEY 8
64% 87% 10% 82% 46% 47% 59% 94% 60% 60% 46% 73% Attended technical/vocational school but did not complete 4% Attended college but did not complete 32% Earned bachelor’s degree 36% Earned master’s degree 4% Completed high school 20% Attended high school but did not complete 4% EDUCATIONAL BACKGROUND Service advisor 48% Admin 36% Manager None 24% 32% TOP PRIOR INDUSTRY POSITIONS
MOST REPRESENTED BY WOMEN-OWNED
WEST:
REGION
SHOPS
DOES YOUR SHOP TRACK KPI?
HERE’S HOW THEIR SHOPS ARE RUN:
ATTENTION TO DETAIL 92% Yes 8% No
KPI REPORT K I P
2023
Importance of Tracking KPIs
KNOWING YOUR NUMBERS PAYS OFF
What gets measured gets managed, and shops that did not track KPI trailed shops that did in 10 of 11 key metrics. Shops tracking KPI had a 3-to-1 chance of reaching $1 million in revenue over shops that did not. Learning to track KPI shows shop owners how the business is performing (or underperforming).
Shops that DO track KPIs Shops that DON’T track KPIs
2023 RATCHET+WRENCH INDUSTRY SURVEY 10
23% 18% NO 67% 82% YES 27% GROSS PROFIT MARGIN ON PARTS ABOVE 50% 54% 64% SALES CLOSING RATIO OVER 70% 49% 29% 65% 54% AVERAGE REPAIR ORDER ABOVE $400 82% 31% OVERALL GROSS PROFIT MARGIN ABOVE 50% 50% 16% EFFECTIVE LABOR RATE ABOVE $90 21% 36% OVERALL NET PROFIT MARGIN ABOVE 15% 52% 12% EFFICIENCY ABOVE 100% 26% 36% POSTED LABOR RATE ABOVE $130 64% 9% PRODUCTIVITY ABOVE 90% 34%
GRAPH KEY: ANNUAL REVENUE OVER $1 MILLION DOES YOUR BUSINESS TRACK KPI? GROSS PROFIT MARGIN ON LABOR ABOVE 60%
Importance of Tracking KPIs
A LOOK AT THE AVERAGE REPAIR SHOP’S FINANCES
A look at annual revenue shows that more shop owners reported revenue between $1 million and $2.5 million (40%) in the 2023 Ratchet+Wrench Industry Survey as compared to 2022 (31%). Gross profit margin in the 50-59% range increased by 10% over 2022, while overall profit margin was up 6% over last year.
2023 RATCHET+WRENCH INDUSTRY SURVEY 11
ANNUAL REVENUE OVERALL GROSS PROFIT MARGIN OVERALL NET PROFIT MARGIN Under $250,000 Less than 30% I don’t generate a net profit 9% 7% 4% $250,000-$499,999 30-39% 1-4% 8% 8% 3% $750,000-$999,999 50-59% 10-14% 13% 42% 14% Over $2,500,000 Does not track 20% or more Does not track 18% 9% 24% 18% $500,000-$749,999 40-49% 5-9% 10% 13% 12% $1,000,000-$2,499,999 60% or more 15-19% 40% 21% 25% Unknown 2%
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Making the Sale
A LOOK AT THE AVERAGE CAR COUNT, ARO, OPPORTUNITY AND CLOSING RATIO
For one-third of shops, the average repair order is $400-$599. On the same token, 1 in 3 shops also report a vehicle opportunity of $1,500 or more. The difference could correlate to higher unsold or deferred work by the customer.
REASONS FOR DELAYED MAINTENANCE
While every customer may not take the time to make the repairs found by technicians—18% say they delay repairs—it’s important to know why so the shop can understand the customer position and improve its processes.
Here are the top three reasons customers delay maintenance, according the Auto Care Association Factbook.
Cost of repair is too high: 37%
Can’t find a convenient time: 20%
Repair doesn’t impact driveability: 19%
2023 RATCHET+WRENCH INDUSTRY SURVEY 12
AVERAGE OPPORTUNITY* PER VEHICLE Below $800 $2,000 and above 10% 17% $1,000–$1,100 Does not know what this is 7% 4% $800–$999 Does not measure 12% 23% $1,200–$1,499 14% $1,500–$1,999 13% AVERAGE REPAIR ORDER Less than $200 13% $200–$399 20% $600–$799 18% $1,000 or more 19% $400–$599 18% $800–$999 12% CLOSING RATIO Less than 50% 16% 50–59% 18% 70–79% 17% 90% or higher 16% 60–69% 14% 80–89% 19% CAR COUNT 100-149 17% 200-249 300 or more 13% 21% 150-199 250-299 12% 9% 50-99 14% Less than 50 14% *average amount of work found on a car—sold and unsold
Car Count’s Impact on Sales
DOES HIGH CAR COUNT MEAN MORE SALES?
The Ratchet+Wrench Industry Survey found that shops serving fewer cars turned out a higher ARO and closing ratio, despite lagging behind slightly in opportunities.
ARO over $1,000: 8%
Closing ratio of 90% or higher: 15%
Opportunities found above $1,000: 53%
ARO over $1,000: 22%
Closing ratio of 90% or higher: 21% Opportunities found above $1,000: 45%
2023 RATCHET+WRENCH INDUSTRY SURVEY 13
CAR COUNT OVER 300
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CAR COUNT LESS THAN 50
Getting Paid Properly
THE IMPACT OF RAISING YOUR LABOR RATE
One of the most contentious KPI is labor rate. While many shop owners know their labor rate needs to be increased to keep up with rising costs, employee compensation and advancements in vehicle technology, it remains a challenge to execute. Data from this year’s survey showed that 86% of shops raised their labor rates within the last two years with 43% reporting labor rates above $140. On the flip side, 1 in 5 shops maintain a labor rate below $110.
2023 RATCHET+WRENCH INDUSTRY SURVEY 14
RAISED LABOR RATE IN PAST 2 YEARS: MIDWEST MIDWEST SOUTH SOUTH NORTHEAST NORTHEAST WEST WEST Less than $80 5% Less than $80 2% Less than $80 3% Less than $80 1% $80-$89 5% $80-$89 0% $80-$89 3% $80-$89 0% $90-$99 6% $90-$99 11% $90-$99 4% $90-$99 1% $100-$109 13% $100-$109 9% $100-$109 10% $100-$109 4% $110-$119 13% $110-$119 5% $110-$119 6% $110-$119 3% $120-$129 17% $120-$129 14% $120-$129 12% $120-$129 14% $140-$149 12% $140-$149 12% $140-$149 10% $140-$149 16% $130-$139 14% $130-$139 18% $130-$139 23% $130-$139 7% $150 or more 17% $150 or more 30% $150 or more 28% $150 or more 54%
POSTED LABOR RATE BY REGION: 86% Yes 88% Yes 82% Yes 88% Yes 14% No 12% No 18% No 12% No
Technician Stats
COMPARING TODAY’S TECHNICIAN WITH THE PAST
Efficient shops are profitable shops. As reported by survey respondents, nearly half of auto repair shops hit an efficiency between 80-100% and 41% hit productivity in the same range. Under the hood, more than one-third of technicans spend between 2 and 2.5 hours on a repair.
2023 RATCHET+WRENCH INDUSTRY SURVEY 15
EFFICIENCY PRODUCTIVITY AVERAGE TIME SPENT ON REPAIR 24% 35% 12% 6% 5% <1% 18% 24% 27% 14% 9% 5% 1% 20% 15% 35% 23% 12% 15% Less than 80% 80-99% 100–109% 110–129% 120–139% 140 or more Does not
Less
90–99% 100–109% 110–119%
Under 2
2-2.5
2.5-3
3-3.5
Over 3.5
track
than 80% 80-89%
120 or more Does not track
hours
hours
hours
hours
hours
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LEADERSHIP
2023
REPORT LEA D E RSH I P
The Typical Leader
A LOOK AT THE 2023 OWNER
The face of the industry is changing. According to the results, leaders are taking more vacation time, spending less time under the hood, pursuing training for themselves and their teams and working fewer hours . With an emphasis on working on the business rather than in the business , shop owners are able to delegate tasks and look at the bigger picture.
Direct involvement: 33%
“I get dirty on the shop floor and lead by example”
Visionary: 31%
“I focus on the big picture and inspire my team to succeed”
Democratic: 19%
“I encourage my staff’s input in decision-making”
Hands-Off: 15%
“I trust my team with key decisions and am not afraid to delegate”
Authoritarian: 2%
“It’s my way or it doesn’t get done”
2023 RATCHET+WRENCH INDUSTRY SURVEY 17 38% Occasionally
AVERAGE HOURS OF WORK PER WEEK TIME SPENT WORKING ON VEHICLES 36% Never 26% Everyday SCHEDULED CHECK-INS WITH EMPLOYEES PLANS TO EXPAND FACILITY 48% Yes 49% Yes 51% No 52% No
LEADERSHIP STYLES Less than 40 24% 40-49 36% 50-59 26% 60 or more 14% VACATION DAYS PER YEAR None 6% 1-5 20% 6-10 16% 11-15 19% 16 or more 39%
Employee Benefits
STAND OUT TO POTENTIAL EMPLOYEES
Retention starts by providing your team with benefits that gives them and their families peace of mind. Here are the most common benefits offered:
CREATIVE COMPENSATION
Sometimes a small- or medium-sized shop can’t provide the attractive benefits package that a larger shop or a franchise can offer. In order to level the playing field, survey respondents indicated that they added perks to their packages.
• Christmas club savings
• Vacation stipend
• Dental and vision insurance
• Flex time
• Gym membership
• Tax help and financial planning
2023 RATCHET+WRENCH INDUSTRY SURVEY 18
POPULAR EMPLOYEE BENEFITS Vacation days 93% Uniforms 84% Sick days 71% Training reimbursement 66% Health insurance 69% Retirement plan/401(k) 62% Disability insurance 35% Life insurance 29% Equipment reimbursement 18% Parental leave 30% Adobe Stock
Team Structure Trends
2023 RATCHET+WRENCH INDUSTRY SURVEY 19 COMMON WAYS THAT LEADERS SET UP EMPLOYEES Here’s a breakdown of how independent repair shop owners structure and pay their teams.
FLAT RATE Technician efficiency over 100% 37% Technician productivity over 100% 25% HOURLY Technician efficiency over 100% 15% Technician productivity over 100% 3% SALARY Technician efficiency over 100% 0% Technician productivity over 100% 4% SALARY PLUS COMMISSION Technician efficiency over 100% 25% Technician productivity over 100% 31% HOURLY PLUS COMMISSION WHERE IN THE U.S. DO TECHS EARN THE HIGHEST MEAN WAGE?* Technician efficiency over 100% Alaska Washington New Jersey 35% $60,640 $56,260 $55,100 Technician productivity over 100% District of Columbia California 20% $61,090 $58,980 * Bureau of Labor and Statistics WHAT BEST DESCRIBES HOW YOUR TECHNICIANS WORK? One tech per vehicle, from start to finish 57% Techs work in teams on each vehicle, from start to finish 10% Techs are segmented by types of jobs 27% Other 6% One tech per vehicle is the most common way shops use their team members in the bays. HOW DO YOU PAY YOUR TECHNICIANS? Flat rate: 23% Salary: 10% Hourly: 28% Hourly + commission: 23% Salary plus commission: 6% Other: 12%
Team Structure Trends
Shop owners reported in the 2023 Ratchet+Wrench Industry Survey that despite there being a shortage of technicians, they are holding on to their technicians longer. On the other side of that equation, the need for technicians has l ed 26% of shop owners to create an apprenticeship program to solve their labor shortage challenges.
One of the best indicators of a healthy business is the length of time your team members have had within the shop.
Apprenticeships are growing in popularity within the auto care industy. As the labor shortage continues, the number may seem small now, but more shops could gravitate toward in-house apprenticeship programs.
Which states are technicians most in demand today?
One of the key changes shop owners have been adamant about chan ging is the perception of the industry in the eyes of the consumer. This is why it’s no surprise that trustworthiness is the most desirable trait in a technician.
2023 RATCHET+WRENCH INDUSTRY SURVEY 20 California 60,500 Texas 61,200 Florida 48,650 Pennsylvania 31,580 New York 30,750
Less than one year 3% 1-2 years 11% 3-4 years YES 23% 26% 5 or more NO 63% 74%
TECH TENURE APPRENTICESHIPS EMPLOYING TECHS* * Bureau of Labor and Statistics MOST IMPORTANT TRAITS FOR A TECHNICIAN Technical skills 15% Ability to learn 25% Passion for the job 17% Trustworthiness Ability to get along with others 27% 16%
Higher Accountability
No matter how long a shop owner has been in the industry, rapid changes are causing many shops to have to learn new approaches to do business and win customers. Coaching has been a solution more shop owners have turned to and according to the data, it’s paid off. Those shop owners getting coached saw their shops significantly outperform those shops that didn’t seek consulting.
2023 RATCHET+WRENCH INDUSTRY SURVEY 21 ENLISTING COACHES AND/OR PEERS TO IMPROVE KPI
LEADERSHIP
AND
DO YOU WORK WITH A BUSINESS COACH? 42% Yes 58% No
WORKS WITH A BUSINESS COACH Revenue above $1 million Revenue above $1 million 84% 48% Average repair order above $400 Average repair order above $400 93% 73% Posted labor rate above $140 Posted labor rate above $140 Attends industry-specific management training at least quarterly Attends industry-specific management training at least quarterly 64% 32% 62% 13% CSI score of 90% or higher CSI score of 90% or higher Sends staff to industry-training at least quarterly Sends staff to industry-training at least quarterly 40% 22% 58% 43% Website updated with the last year Website updated with the last year Has scheduled check-ins with employees Has scheduled check-ins with employees 66% 33% 67% 63% DOESN’T WORK WITH A BUSINESS COACH
Higher Accountability
The data revealed that shop owners who participate in peer networking groups report having higher revenue and ARO and better performing technicians.
2023 RATCHET+WRENCH INDUSTRY SURVEY 22
37% Yes 63% No
ARE YOU A MEMBER OF A 20 GROUP OR OTHER PEER NETWORKING GROUP?
WORKS WITH A PEER NETWORKING GROUP Revenue above $1 million Revenue above $1 million 81% 52% Average repair order above $400 Average repair order above $400 89% 77% Posted labor rate above $140 Posted labor rate above $140 Attends industry-specific management training at least quarterly Attends industry-specific management training at least quarterly 63% 36% 61% 18% CSI score of 90% or higher CSI score of 90% or higher Sends staff to industry-training at least quarterly Sends staff to industry-training at least quarterly 48% 19% 55% 44% Website updated with the last year Website updated with the last year Has scheduled check-ins with employees Has scheduled check-ins with employees 60% 38% 68% 38% DOESN’T WORK WITH A PEER NETWORKING GROUP
TECH+TOOLS TECH TOOLS
— 2023 —
Budgeting for Tech, Tools, and Equipment
A LOOK AT HOW MUCH AND WHERE SHOP OWNERS ARE INVESTING THEIR MONEY
While most shop owners in the 2023 Ratchet+Wrench Industry Survey said they didn’t designate a specific budget for equipment, their sweet spot fal ls between 1% and 10%. While that may not seem a hefty investment, nearly 9 out of 10 shop owners said they foot the bill in providing tools.
2023 RATCHET+WRENCH INDUSTRY SURVEY 24
PERCENT OF BUDGET USED FOR TECH, TOOLS AND EQUIPMENT Less than 1% 3% 1-5% 26% 6-10% 19% 11-15% 10% 16-20% 6% 21 or more 3% No specific budget 33% PROVIDES TOOLS FOR TECHS 89% Yes 11% No Adobe Stock
Training Your Techs for Long-Term Success
IN ORDER TO KEEP UP WITH A CHANGING INDUSTY, CONTINUAL EDUCATION IS KEY
To help technicians “sharpen the saw,” 64% of shop owners paid for training provided by industry training organizations like ASE or through the specific manufactutres of the equipment their technicians use. In terms of training frequency, a little over one-third of technicians and a quarter of shop owners trained four times per year.
2023 RATCHET+WRENCH INDUSTRY SURVEY 25 OEM-specific 28% Within last five years 20% Annually 27% Quarterly 27% Monthly or more 13% Never 13% Within last five years 12% Annually 26% Quarterly 35% Monthly or more 14% Never 13% FREQUENCY OF TECHNICIAN TRAINING TYPE OF TRAINING RESPONDENT AND/OR TEAM ATTEND ASE 29% Industry association 55% Part/equipment manufacturer 43% Part/equipment supplier 60% Other vendor 33% None 11% FREQUENCY OF OWNER TRAINING TYPE OF TRAINING FOR WHICH SHOP PAYS ASE 64% Industry association 53% Part/equipment manufacturer 46% Management and career development 47% OEM-specific 40% Other vendor 38% None 12%
Technology as a Business Tool
USING SOFTWARE IS AN EFFICIENT WAY TO STREAMLINE BUSINESS
In 2023, technology is king. Many auto shop owners have proven that they’re upto-speed on technology and how to make it work for the running of their shops
2023 RATCHET+WRENCH INDUSTRY SURVEY 26
SOFTWARE USED Accounting software 82% Electronic management system 88% Electronic estimating system 81% CRM software 51% Electronic inspection sheet 63% Electronic KPI software 44% Electronic customer service index software 22% Adobe Stock
Scan Tools
IN ORDER TO DIAGNOSE VEHICLES, THESE PIECES OF EQUIPMENT ARE KEY
A variety of tools to serve a variety of needs makes sense for a general repair shop with 28 percent reporting that they have three or more OEM tools.
OEM ACCESS
Where shops are finding crucial repair information
Ninety-four percent of repair shops subscribe to a repair information service and 83% have access to OEM repair information, reports the data from the 2023 Ratchet+Wrench Industry Survey. This is key. As the automotive industry continues to grow and evolve, having access to quality information will guarantee shops can offer the best service to their customers.
2023 RATCHET+WRENCH INDUSTRY SURVEY 27
SUBSCRIPTION TO REPAIR INFORMATION SERVICE ACCESS TO OEM REPAIR INFORMATION 94% Yes 83% Yes 6% No 17% No OEM SCAN TOOLS (OEM) OEM SCAN TOOLS (AFTERMARKET) None 43% 1 15% 2 14% 3 or more 28% None 3% 1 11% 2 23% 3 or more 63%
Marketing to Consumers
Every shop has a different relationship with marketing. As indicated by shop owners responding to the Ratchet+Wrench Industry Survey, 1 in 10 shops outsources their marketing while 40% prefer to handle those operations in-house and 32% choos e to share the role with an outside marketing service provider. Key areas in shop marketing include the shop’s website, social media and and a combination of print and digital strategies.
* 60% of shops without a website have an
* 78% of shops posting to social media daily
* 69% of shops using Facebook have an
2023 RATCHET+WRENCH INDUSTRY SURVEY 28
PREFERRED SOCIAL MEDIA PLATFORMS Facebook 82% Twitter 20% LinkedIn 16% Instagram 36% Pinterest 3% Snapchat 2% TikTok None 7% 17% LAST WEBSITE UPDATE Within the last year 46% 1 year ago 1% 2 years ago 14% 3 years ago 8% 4 years ago 6% No website 12%
SOCIAL MEDIA USE FREQUENCY Daily 19% Weekly 34% Quarterly 7% Yearly 4% Don’t Use 21% Monthly 15%
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Marketing to Consumers
* 37% of shops that don’t market have an average revenue of under $500,000
2023 RATCHET+WRENCH INDUSTRY SURVEY 29
SOCIAL MEDIA USE FREQUENCY SEO tools 47% Geofencing Paid search 16% 19% Video marketing Organic 12% 30% Facebook ads Don’t market 49% 26% Google Adwords 43% Email marketing Direct mail 49% 39%
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Looking Ahead
Over the next five years, 81% of shop owners said they expect t heir annual sales to continue to grow with over half of shop owners saying they plan to invest in EV repair. When asked about ADAS investment, only a small percentage of shops were equipped for the service.
HOW HAVE YOUR TOTAL ANNUAL SALES TRENDED DURING THE LAST FIVE YEARS?
HOW DO YOU EXPECT YOUR SALES TO TREND DURING THE NEXT FIVE YEARS?
DO YOU HAVE PLANS TO EXPAND YOUR FACILITY OR ADD LOCATIONS IN THE NEAR FUTURE?
WHAT IS YOUR FIVE-YEAR INVESTMENT FOCUS?
HOW DO YOU EXPECT YOUR SALES TO TREND DURING THE NEXT FIVE YEARS?
IS YOUR SHOP EQUIPPED FOR ADAS WORK?
2023 RATCHET+WRENCH INDUSTRY SURVEY 30
Grown Grow Collision shop YES YES ADAS Declined Decline Quick lane NO NO EVs Fleets 87% 81% 4% 48% 16% 46% 3% 3% 7% 52% 84% 34% 57% Remained flat Stay the same Tire sales ADAS repair Inconsistent Uncertain EV repair Other 5% 12% 66% 16% 5% 4% 27% 27%
Primary Concerns
For nearly 70% of shop owners, the ability to find and employ a uto technicians remains a difficult obstacle to overcome. When asked, shop owners cited poor leadership and inadequate facilities as reasons why technicians exit the industry. The second major concern of shop owners was related to the country’s present inflation.
2023 RATCHET+WRENCH INDUSTRY SURVEY 31 Low labor rates 4% Technology and tool needs 3%
PRIMARY CONCERNS Technician shortage 68% Rising business costs 11% Availability of repair information 9% Vehicle design advancements 5% Training 2% Parts choices (OE vs. aftermarket) Industry consolidation 2% 1% Other 4%
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Retirement & Succession
With 35% of shop owners at or heading into retirement age during this decade (ages 60-plus), two-thirds say they plan to retire. About a quarter quarter of these shop owners plan to pass their business to a family member or business partner and another 25% says they intend to sell to a private buyer.
DO YOU HAVE PLANS TO RETIRE IN THE NEAR FUTURE?
WHAT IS YOUR BUSINESS SUCCESSION PLAN?
2023 RATCHET+WRENCH INDUSTRY SURVEY 32
35% No 65% Yes Sell to a private buyer 26% Leave it to a family member or business partner 25% Sell it to a chain/consolidator 3% Transfer ownership to staff 18% I don’t have one 19% Other 9%