The 2 Numbers That Decide If Your Vehicle Wrap Shop Scales.

Added: 2026-06-02

[00:00:00]Would you believe me if I told you that you could change one thing in your business by a measly 5%. And it could completely change how you do everything in business. It could delete weeks off of your schedule. It could allow you the the extra funds to hire that next employee, allow you the extra money to run the advertising that you so desperately need to run. If you were constantly busy in your business, but you're still broke, then this video is for you. Now, why should you watch this video? My name is Brent Knot. I own and operate Design at Wraps. And I have currently been out of my business for the last 3 years. It wasn't always like that. I spent the 10 years prior in my business doing everything myself and doing it the hard way, much like many of you. It wasn't until I started working on these things that we're going to go over in this video that I started to see true progress in my business. Now, this video is going to be broken down mostly in two levers. Um, the the two levers that are going to matter the most is your gross profit margin and your capacity. Everybody says know your numbers. And while that's true, a lot of us installerbrained uh business owners, we don't understand that vocabulary. We don't understand naturally what it means to look at a profit and loss sheet, right? And so in this video, I'm going to be breaking down like installer math basically on how to grow and scale your business just with two simple levers. What is your capacity and what is your gross profit margin? So first, what is gross profit margin even? I see so often on our Facebook forums where people are saying, "Hey, how much would you quote this trailer? How much would you quote this vehicle for?" And so many people just answer $15 a square foot, $14 a square foot, $12 a square foot, whatever the price is. It's often confused and wrong.

[00:01:57]In fact, I've even seen two people say, "I charge $15 a square foot." And they both come up with different prices. How is that even possible? And it's because everybody's guessing. They don't truly understand why they arrived at this $15 a square foot. They don't really know how many square foot for sure is on that vehicle because they haven't created a system in which they're going to be paneling out that vehicle. Every single one of them is different and therefore they are constantly getting different results. So what is gross profit margin?

[00:02:29]It is the revenue minus the cost of goods sold divided by the revenue. Now one thing to understand in our industry is cost of goods sold also includes our labor. In many industries it does not but we cannot procure the item or the end result without facilitating some form of manufacturing and the labor to put it on. Therefore that is a part of that equation. So, you're going to take the total sum of what the design cost was, what the production cost, what the installation cost, and then you are going to um package all of that together and then divide it by the revenue. And you should be aiming for a target of let's just call it 60% gross profit margin. All right, so let's break down a scenario. We're going to use a mid roof cargo van, uh, Ford Transit, Dodge, ProMaster, doesn't matter, as uh, breaking down just how little these little tweaks make to your business. So, in most cases, depending on how you tile everything, the cargo van at a 148 wheelbase, let's just say mid roof is approximately 350 365 ft. And so all of these inputs that you're going to see on my screen are effectively um realworld numbers for calculating what my gross profit margin is going to be for one of those vehicles. Let's just say I was selling the project end all beall at $4,000. Okay, I don't care what the square foot price is. I only care about the profit left over and why I arrived at the the number. Now uh in this calculator that I've built I have a in-house material rate as well as a outsourced print rate. Okay. And we are also including a about 30 I think it's 32.5 cents per square foot on ink expense. Uh I have my artwork being built at an in-house designer. Um if I was to contract this out then I would need to change this price to whatever it may be. You can see that clearly my gross profit went down. But um if you were designing in-house, then what I calculated for was 4 hours at $30 an hour. To produce in-house, I put two business hours at $30 an hour. The install labor is at 16 man hours at $30 an hour. Okay? So many people aren't paying their staff $30 an hour in many cases. But the point is is this is also how you can uh preload how much you could pay a position to do their tasks.

[00:05:03]Okay? Even if it's just you doing it, that's what you should be getting paid until you hire it out. Okay?

[00:05:09]Now, if I was to sell that project at $4,000 based on those numbers, of course, that's if those are true, um, then I would be at a 62% gross profit margin, which is pretty strong. That means that at the end of the day, I'm going to be making $2,475 on the bottom end of the gross profit for that project. Now, to the side of this, you can see that I also included the outsourcing effect where you are going to be closer to a 40% gross profit margin, but we'll get into that later.

[00:05:43]Now, if I was to instead change that price to $4,250, okay, and let's just say all of my expenses did not change, right? Then I would now be at 64%. That means I'm effectively getting $250 additional per unit that I am putting out. Now, doesn't seem like a lot, but it makes a big difference. Let's just say you complete one vehicle wrap a week cuz you're solo operator. Okay? And that means that you have 52 units that you can complete times $250 is $13,000.

[00:06:21]Okay? Just for $250 change. All right.

[00:06:25]Now, there's a lot of ways to go about this to skin this cat, too. Meaning, instead of just giving the design away, we could start charging for an artwork pack. We can increase our revenue um by increasing our price. We can also remove how much friction it takes us to produce that project. Meaning maybe we don't wrap bumpers, door handles, mirrors, which is not the case on the transit van, but on trucks for example, those are items that are going to take us more time to complete. Therefore, we can make it all a cart and we can start charging, let's just say $35 to $40 per door handle, and we're at least getting paid $40 an hour to do one handle if it takes you one hour to do the door handle.

[00:07:11]Okay? By the time you add up the door handles and the mirrors, you are now adding effectively that $250 to that project, right? Um, and that's $13,000 straight to the bottom line at the end of the year that you uh would get to keep and or invest. Now, a couple of things here. I would say that if your design included that frankly you could probably get, let's just say $4,500 for that project. Now, you're at 66% gross profit margin, right? And we go from instead of $4,000 time 52 at $28,000 in revenue for the year, we can be at 44,500 * 52 means that you're now at $234,000.

[00:07:55]Okay, you just increased your revenue by $30,000 by not working more at all.

[00:08:02]That is massive. And these are little small changes. Okay. Now, you can see here that we went from uh at 62% where we at 62.

[00:08:16]We're at $2500 and then at 66 we are at $2,959.

[00:08:23]Now, couple of things happen here. This is where it really starts to compound.

[00:08:27]That is math purely on you being a sole operator.

[00:08:32]We can't think like that. We're not in the business. We're not in business to be alone. So, whenever I first started growing and scaling my vehicle wrap shop back in 2013, there was absolutely zero business education on growing and scaling a vehicle wrap shop. And that is what we strive to achieve with the rap shop academy. I would like to invite you out to the printing profits workshop July 18th and 19th at John Doover Shop Vinyl Images. Over the next two days at that event, we are going to be covering how to grow and scale your vehicle wrap shop. It is not a mystery as to how to do it. It's just a matter of giving yourself the permission to take the time to grow. So, if you're struggling to grow your rap shop and you're tired of beating your head against the wall, then click the link below and we will see you at the event in St. Louis. Back to the podcast. You're not you're not a business owner if you're a solo operator. You're just getting started.

[00:09:25]That's the difference. So that's not hate to the people that are alone. It's just you're just starting out.

[00:09:31]Therefore, this is just what you have to do. You have to be alone. But if you price correctly and you're getting a higher than 65% gross profit margin, I can assure you very quickly you can hire somebody because you are making 2959 per project bottom line. And as long as you have some financial discipline where you're not just blowing the money on a nice truck or something like that, then you can get your help.

[00:10:00]All right, so that's a little bit on your gross profit margin. Now, we're going to look at what is our capacity.

[00:10:05]So, I'm going to break it down in very simple terms. And on this this this page here, you can see that let's just say our first goal is $250,000. And this repeats at 500K, 750, 1 million. This process goes over and over and over. But if you're at $250,000 is your revenue goal and you typically work 220 business days out of the year. That is a normal job. By the way, that is not what most entrepreneurs do. Most entrepreneurs work 365 days. Okay?

[00:10:36]Right? But let's just say that we were being smart with oursel and we were um planning for the future that we should not be running on a sprint at all times in our business. Okay. So we can change this to 220. We can say we want to work 250 days and give oursel um 100 days of weekends and or vaca vacation time with family, whatever it may be. Um, but I like to use 220 because I always like to be conservative with our math. If there is something wrong in my model, I want to know. Okay, it that just means that if you're working more days and this still doesn't work for you, then something's really wrong. Okay, now if you were at 60% gross profit margin and you you were to take five days per unit because you're doing everything, right?

[00:11:31]So, you're doing one unit a week.

[00:11:33]Basically, that means that you would average out across the year, including some of these days off, uh, holidays, family time, whatever it may be, that you're going to actually facilitate 44 units across the year. Okay?

[00:11:55]Now, obviously, all of this math is broken down as a full wrap. It's just simpler that way. But you can also um figure out what your average ticket is and it'll give you some real world numbers as well. Um now if you were keeping 60% gross profit margin that means that at the end of the at the end of the day $250,000 a year you should be making $150,000 in gross profit. That is the money that in which you are going to pay for your insurance, your building, everything like that. And frankly, at 60% gross profit margin, you should be seeing at least 10 to 15% on the bottom line. Now, the problem is with this capacity lever is our goal is $250,000.

[00:12:36]If we only wrap 44 units in a perfect world at $4,000, then we're going to be 19 vehicles short of our yearly goal. And you can't work any harder. Now, you could work more days. So, let's just say, okay, uh, I'm going to tolerate this for a little while. Great. You now get 65 days off for the year, and you are three vehicles short. All right, it's very quick ways for you to kind of tally up how you're going to hit $250,000 in revenue. One vehicle a week. Great. I can hit it. You can also work less days. Let's just say 280 days, but we're going to change our price to 65%, which if you remember was $4,500.

[00:13:26]Actually, it was 66. And so now you can quickly see that just raising your price 6% took 20 days of work off your schedule. Again, back to that busy and broke thing. You can go through a season of grind. you can work more days, but if you work more days at 66% gross profit margin, then you can easily bolster up the the bank account so that you can hire these people. It's that simple. It just takes stopping for a second and saying, "What is wrong?"

[00:14:00]Instead, we us installers, we just throw more work at it. We're like, "Yeah, that's just what we know. We're going to work harder and it's going to fix all my problems." and it does for a while, but it breaks eventually or you break or something happens or you get sick or whatever it may be. It's not sustainable. But, you know, back to our 20 220 business days, if we want to be a lifestyle entrepreneur, well, we're still 12 vehicles short. What can we do?

[00:14:28]Well, I can also get more efficient. I can install and produce and do everything in 4 days. Guess what? and I just worked 60 days less just because I got one more day efficient on my output.

[00:14:40]So, there's a lot of ways to view your capacity. You can raise your price, you can get more efficient, you can work more days to hit your goals, but if you didn't notice that the biggest lever was more efficient in price, not working more.

[00:15:01]it took 20 days and or 60 days off your schedule from efficiency or raising your price.

[00:15:10]Whereas working more barely pushes the needle. Okay? It's it's it's effective until it's not. It has a massive diminishing return. Now, after that, so we got our gross profit margin.

[00:15:26]We're slowly tweaking that up. We're increasing our efficiency to increase our capacity or what what velocity of cash can run through the business. Now, we need to identify when can we hire.

[00:15:41]Uh, I don't know about you, but every time I've ever, especially early on, like between hiring my first person all the way up to hiring the fifth, like that one through five is tough because you always say, "Man, if I could just get like like I always felt like I was on a hill, right? And I'm climbing up this hill and I'm like 75% there." And I'm like, if I could just get to the top of that damn hill, then I could basically hire that person.

[00:16:13]But you're already there.

[00:16:15]You at 75% or even 80% you forget that hiring somebody means that they're going to generate you a return on investment.

[00:16:25]Their job is to make you money. It's not to cost you anything. We should get excited to hire people. Why? because they make us money. Every time we hire somebody, if we effectively hire that person and we train them correctly, they will make you money. All right. Now, let's look at a calculator for that. So, if you were, you know, back to the efficiency thing, especially if you were working five days per one unit of rap and just hiring a flexible admin person that could also help you a little bit in production. Okay, let's just go super conservative on this and they can you're at 5 days and they're going to save you one whole day of working on the output of your vehicles, but they're also going to do something that is often overlooked and that's keeping your schedule consistent. Okay, now we're back to 20 220 business days out of the year. Our gross profit margin per wrap was, let's go back over here. We have um let's just start off at 60%.

[00:17:36]So if our gross profit margin is 2,200 right here, let's see, copy. And our admin annual cost is $40,000, then we need to basically figure out what the ROI of the admin is.

[00:17:53]So the ROI right now or the spread for the admin is that they can take you from five days to four. All right.

[00:18:02]Now, what if it was like a hybrid role where they're like admin plus production and they have a little bit of design skills? Could could they possibly bring you down to three or three and a half?

[00:18:12]Now, I need to fix it on this calculator because I can't do three and a half. But if you could average 3 days, then now you're going to go from 44 units out of the year to 73 units. That means that the additional gross profit margin that's going to be generated for that employee is $67,000 if that was the case. Right?

[00:18:35]The thing that we have to identify is is that true. So we have to put in real numbers here. But you can see that you're now getting a return on investment off of that admin/flexible production role just because you it you're you're now so much more efficient at install because you can put out vehicles. Like let's be real, good installers actually can install probably not even really trying at two days.

[00:19:02]Okay, two days. So imagine if you hired all the other position, like if you could just only install and you could do two days worth of units. What does that even look like? Let's go to capacity. It takes you two days, right? All of a sudden, you jumped up to 110 units that you can complete for the year. Okay. So then let's just see what that means for our revenue. 350 400,000 500,000.

[00:19:43]So that's how easy it is, frankly, to get to 500K is you just need to be able to wrap a unit every two days and then you reverse engineer all the steps prior to that. Now, obviously doing that is the hard part. Frankly, wrapping the car in two days is easy.

[00:20:02]But training a designer and training a production person and training an admin to fully own the responsibilities of their role is what will unlock very easily a team that can achieve this $500,000 goal is to make sure that the quarterback can pass the ball. That's it. Super simple.

[00:20:24]Can you shoot your shot? Okay, so back to the admin payback calculator. So, if we're at 4 days, right, and that's at the 22 or $2,286, but if we came back and we upped our price to our 66% gross profit margin, right, we're now at 2959.

[00:20:48]Let's go here. 29 59.

[00:20:53]We've done nothing.

[00:20:55]And we went from 40 capacity of 44 to 55 rafts. Okay, you're almost already there.

[00:21:06]You don't have to work more days. So it's like, well, how many more days this year do I need to work? 240?

[00:21:12]Nope. 250? Nope. 260?

[00:21:15]Nope. 270? Okay. So basically, you added 50 days of the work year, but frankly, most of you guys are working more than that in the first place. So, what that's that's the question that I'm asking you guys is what is broken in your business that needs to be adjusted. Which lever is it? Is it my capacity? Do I need to get more skills so I can get more efficient on the install to get to the 5day mark? Cuz maybe you're not there.

[00:21:43]Is it that I need to get more efficient on my process for the design? Or do I need to sub out the design so I can keep installing? Do I need to sub out the install so I can keep selling? Like what is your proficiency even? Right? And you have to start asking yourself better questions and using, you know, is it my pricing or is it my capacity?

[00:22:06]Because if you're full and if you're booked four to six weeks out, most likely you can just automatically increase your pricing. If you're booked four to six weeks out, your pricing is too low.

[00:22:18]And frankly, your service is probably really good to be booked out that far in the first place. So, people want to use you. I'm going to break down a very simple math equation for you that really got me excited about this, and I've never thought about it before, but let's just say you're at a million dollars in sales, okay? And we use a million because it's easiest to do the math on.

[00:22:38]And at the end of the year after doing a million dollars in sales, the only thing that you had left over was 10% net profit. Okay? which is not really healthy in my opinion for our industry, especially if you're operating within the business. Um, you should be 20% or higher.

[00:22:54]If you're at a million dollars with 10% net profit and you increase your prices by 10% and let's just say 10% of your customer base now hates you and you don't attract any more business the next year. Okay, worst case scenario, you are only going to have to fulfill 99 uh $900,000 of topline revenue of work. But you're only going to lose $10,000 in net profit, okay?

[00:23:23]Because you're going to do 900k and you're still going to be at 10% net profit. You're just going to work less for only $10,000 less.

[00:23:29]However, in most cases, the likelihood is the customer ends up staying or most all customers end up staying. But let's just say in the scenario that all customers stayed and they they agreed to pay your 10% increased price.

[00:23:45]You're now going the next year going to do $1.1 million. You hired nobody. The business is exactly the same. Okay? So, your expenses are the same. And now, instead of making $100,000 at the end of the year, you did only $100,000 increase of sales, which is 20 wraps, I believe.

[00:24:04]So, let's just say, yeah, let me just check. So, increasing that price is equal to you wrapping 25 more vehicles.

[00:24:13]but you didn't wrap them and you on the bottom line increased your profit by an additional $100,000 because your expenses didn't change. Okay? So, increasing your price 10%. It doesn't have to be 10% by the way, but it's just for simple math. 1 million in sales, 10% net profit. Raise your prices 10%. The drawback is you could lose $100,000 if nobody bought from you or if 10% of your customers were to leave, which is unlikely. And and or you lose only $10,000 in net profit or the upside is you increase your net profit by $100,000. Like that's massive. I don't care who you are. And so if you just year one want to increase the price by 5% and great, it's $50,000 in bottom line revenue or in bottom line net profit.

[00:25:04]These are little micro tweaks. That is what makes a business that scales. It is not one lever that you're just looking to pull on as hard as you can and it's going to fix all your problems. It's little micro tweaks in your business that are going to make massive benefits because they all compound together.

[00:25:23]Okay. Um so you need to start asking yourself what is broken in my business? What am I looking at? Is it my pricing? Is it my capacity? It's most likely both. And if I start pulling on these levers, how can I get to my next hire? It's very easy.

[00:25:41]If you're so close to hiring your next person, just raise your prices 3 to 5%.

[00:25:47]It it it will work. I promise. Most like most of us are not at the top of the market.

[00:25:53]And if you don't want to increase your prices by 3 to 5%, you can also decrease the amount of friction that it takes you to fulfill the job. Um, I had a guy, short story, had a guy yesterday, he told me, um, it just proves the point.

[00:26:09]He told me he was at $16 a square foot for installing vehicles, yet he was pricing at $4,500. I was like, "No, you're at 12."

[00:26:19]Like, I believe is what the math came out to. Like, oh, what is it?

[00:26:24]Yeah. 375 foot on a cargo van time 12 is 4,500 bucks. So, he was not at $16 a square foot at all. He had this illusion he was charging $16 a square foot and yet he wasn't. And he told me that he is slammed. He's floored for like 4 to6 weeks and they can't quite afford new help.

[00:26:45]And I was like, well, there's a lot of ways we can go about it. I was like, are you selling the artwork? And he said, yes, I'm actually um that's my proficiency is design. I was like, "Okay, well, what if you were to instead of giving the design away like or instead of like what if you were to increase your profit on the bottom line by creating an offer?" Okay, many of us have to give files to the customers anyway whenever they want to go get shirts made, whatever it is. So, why don't you instead of charging just for design, you have a design package above it where you charge, let's just say instead of $750 for just the design, you can charge $1,500 and you provide them a whole mood board, uh, branding profile, branding guidelines, how to use the logo, um, all of the file types and outputs, JPEG, PNG, PDF, SVG, whatever they need to get whatever they need to be produced in the future and they also own the assets when they are done with you. And then you make sure that it's written that you own the assets if they only pay $750.

[00:27:52]You're now upselling $750 per project.

[00:27:57]And let's just say out of the capacity of okay, let's just say you're doing 44 units a year, right? And let's just say 50% pay you for that. So 22 jobs pay you for $750 additional. You're going to make $16,000 at the end of the year bottom line net profit because you have no additional expenses against it. And you dramatically increased your gross profit in doing so.

[00:28:25]That is just one change. Not wrapping door handles for free. Not wrapping mirrors for free. Not wrapping roofs for free. Not wrapping bumpers on trucks for free. adding it as a line item because some trucks have plastic bumpers or chrome bumpers. So, we can say that if it's painted, we are going to charge you for the bumper.

[00:28:49]These are the micro tweaks that you make to grow and scale your wrap shop. Um, I will make sure that you guys have access to this capacity calculator. I'm still making tweaks to it, so it's not perfect just yet. Um, but get in there, play with your business, ask more questions, slow down, find out why you are struggling to grow your rap shop. There is a feedback, there is a feedback loop.

[00:29:15]It is telling you something.

[00:29:17]And our job as the entrepreneurs within the business is to solve that puzzle.

[00:29:21]And if you can constantly get better at asking yourself, what is this telling me? Growing your business becomes a lot more fun because you don't look at problems anymore as problems. you start looking at them as opportunities. You look at a problem as a potential to solve a riddle that will give you a return.

[00:29:40]So, with that being said, thank you so much for watching this video. Please subscribe to this channel. It does push this then to more rap shops and we don't ask for a lot. I do a ton of giving. I'm happy to continue to do so, but that is one thing that does greatly affect us is making sure that people know that this channel exists. So, thank you so much and we'll see you