Staffing by Sets
To maximize dealership profit, limit total personnel expenses to one-third of gross profit. Target specific departmental caps: 20% of service revenue for technicians, 50-60% of gross profit for sales, and 10% of revenue for parts and rental. Cap administrative support at 5% of aftermarket revenue to ensure sustainable growth.
Maintaining a high-profit dealership requires balancing revenue-generating roles with essential support staff while adhering to a strict "salary cap". A proven benchmark is to limit total personnel expenses—including wages, benefits, and taxes—to one-third of your total gross profit.
Revenue-Producing Staff (The "Front Line")
Your core staffing begins with your revenue generators:
Technicians & Salespeople: In a high-performing service department, personnel costs should be targeted at 20% of service revenue. Sales staffing should be managed so that total sales personnel expenses do not exceed 50-60% of the department's gross profit.
Rental & Parts: These departments should aim for personnel costs around 10% of their respective revenues. For rental, maintaining a 75% "Days Utilization" rate is critical to ensuring these staff members are managing active, income-producing assets.
Support and Admin (The "Back Office")
To compliment these roles without eroding profit, administrative and overhead expenses should be capped at 5% of aftermarket revenue. This "hard cap" ensures that for every dollar spent on admin, there is a direct, proportional amount of gross profit to support it. By viewing your dealership through these specific percentage caps, you ensure that as you scale your "iron" and "data" teams, your labor costs remain a sustainable investment rather than a financial burden.