Auto Repair Valuation Template

Start with the Business Inputs sheet. Pull your trailing twelve-month revenue by category from your shop management system — most systems (Mitchell 1, Shop-Ware, Tekmetric, ROWriter) can export a revenue breakdown by service category, and you want labor revenue separated from parts revenue rather than combined. Gather your full expense structure from your profit and loss statement or your accountant's records. Owner compensation needs to be fully documented: your salary or draws, any personal expenses run through the business (a vehicle, fuel, health insurance, personal cell phone), and any family members on payroll whose compensation would not continue under new ownership. For the asset section, pull any recent equipment appraisals if you have them, or estimate current resale value based on age and condition rather than original purchase price — a ten-year-old two-post lift that cost $12,000 new might be worth $4,000–$7,000 today depending on its condition and brand.

Auto repair shop valuations are shaped by three realities that distinguish them from most other small businesses. First, the workforce is the primary asset — more than the equipment, the customer list, or even the lease. A shop's ability to perform the work that generates revenue depends entirely on whether the technicians stay after a sale, and buyers know it. A shop where the current owner is personally performing a significant portion of the billable labor is worth less than one where the technical work is fully distributed among a retained team, because a buyer must hire replacement labor immediately at close. Second, the equipment is substantial, expensive to replace, and essential — a buyer cannot operate an auto repair shop without functional vehicle lifts, working diagnostic tools, and alignment equipment, and the condition of that equipment is therefore a direct input to both the asset floor value and the SDE multiple. Third, the revenue mix between labor and parts matters: labor revenue reflects the shop's technical capacity and workforce, while parts revenue largely follows as a byproduct — a shop with strong labor revenue and appropriate parts margins is a healthier operation than one showing high parts revenue relative to labor, which can indicate a less skilled service mix.

Key Performance Indicators