Real repair shop profitability: margin, costs and break-even point

Some shops never stop working and, at the end of the month, barely have anything left. Others, with less volume, live comfortably. The difference is almost never in the hands, but in the numbers: knowing what each repair truly costs and the point at which you actually start making money. This guide gives you the full calculator, with example figures in euros.

1. What real margin is (and why "profit" misleads you)

When you charge €90 to replace a screen that cost you €35, it's easy to think you made €55. That's not true. Those €55 are your gross margin, but they haven't yet paid the rent, the electricity, your time or the technician's. The number that really matters is the net margin: what's left after assigning every cost to that repair.

To calculate it properly you need to separate three cost blocks:

• Part cost: what you pay your supplier for the spare part, including shipping if any.
• Labour cost (real hourly rate): not the salary you wish for, but what one productive shop hour actually costs. It's based on the hours you really bill, not the 8 you spend inside.
• Allocated fixed costs: rent, utilities, software, insurance, accountant… spread across the month's repairs.

2. How to calculate a repair's margin, step by step

The most useful approach is to build a real shop hourly cost and apply it to every job. Let's look at a realistic example of a one-person shop.

Step 1: your real hourly cost

Assume these monthly fixed costs and a technician who bills around 110 hours a month (out of the ~160 worked; the rest goes to customer service, errands, waiting and gaps):

In other words: every shop hour costs you about €29 in structure alone, before touching a single part. If you charge labour below that, you lose money even when the part has a good margin.

Step 2: the margin on a specific repair

Take a screen replacement that takes 40 minutes (0.67 h) and that you charge at €90:

That repair leaves €35.50 in real terms, not €55. The difference (the €19.50 of labour) is exactly what "evaporates" when you only look at part versus price. Repeat this calculation for your 5 or 6 most frequent services and you'll have a crystal-clear map of what's worth pushing.

3. What margin percentage to aim for

There's no magic number, but there are healthy benchmarks for a repair shop:

• Labour: aim to multiply your hourly cost by 2 to 2.5. If your hour costs €29, bill it between €55 and €70.
• Parts: a 50–100% margin over cost is standard (a €35 screen sells for €55 to €70 as a part, before labour).
• Net margin on the full ticket: each closed repair should leave you, on average, a 30–45% net. Below 25% you're tight; above 50% you can probably grow or you're highly specialised.

4. Your monthly break-even point

The break-even point is how much you have to bill (or how many repairs to close) to cover all your costs. Beyond that, everything else is profit.

The formula is simple: fixed costs ÷ average net margin per repair = repairs needed per month.

Translation: you need to close a little over 4 profitable repairs a day just to break even. The 93rd of the month is the first that leaves you clean money. If you raise the average margin from €35 to €45 (better pricing or more profitable jobs), your break-even drops to 71 repairs: 21 fewer a month for the same result. That's why raising margin matters more than raising volume.

5. Mistakes that kill profitability

• Not costing your own time: if your salary isn't inside the costs, the shop looks profitable when it actually pays you less than an employed job.
• Charging labour "by eye": without a calculated hourly cost, long, cheap jobs sink you without you noticing.
• Idle stock: parts you bought that don't rotate are tied-up money and sometimes obsolete. Capital that isn't working.
• Unpaid customer debt: repairs handed over "to pay later" that pile up. It's real margin that never reaches the till.
• Not measuring by service: without knowing which repair leaves the most, you push the wrong ones and overlook the good ones.

All these mistakes share one thing: they're invisible if you don't track the numbers. And tracking them by hand, with notebooks or a loose spreadsheet, almost nobody keeps up month after month.