Jim Murphy

Maximizing labor potential continues to be critical for shop owners who are working to grow their business without adding personnel.

Business owners need to know their monthly break-even point to help them project business profitability each month. The break-even point is very easy to calculate and will take seconds if you have an accurate profit and loss statement.

Many colleagues in the industry seem to be confused about managing labor inventory in their shops. Much of the confusion comes from the terminology thrown around the industry and because the definitions for these terms vary (no disrespect to my peers). I would like to clarify, from my perspective, what I believe to be the proper terminology and formulas for managing labor inventory.