Heard about the booming auto repair business and want a slice of the pie? Then, you have come to the right place.
Auto repair businesses have since long been experiencing a surge in customer demand. But to start a successful automotive repair shop, it’s vital to stay ahead of the curve with some tips and tricks.
Our ultimate guide on how to start a car repair shop will walk you through all the steps you need to know.
Why Should You Start An Auto Repair Business?
Don’t shoot darts in the dark; let’s start with the basics. Why are auto repair shops a lucrative business, and why should you be interested in running one?
The services of car repair shops have always been in strong demand. And with the rising sales of cars, automotive service excellence is in more need than ever.
Here are some of the reasons why you need to start your own auto repair shop:
It’s A Profitable Business
Setting up an auto repair shop can help shop owners earn high profits. With relatively low startup costs, you can make good money if you do this the right way with a solid business plan.
It Gives You Flexibility
Having your car repair shop can offer you flexibility. Instead of a typical 9-5 job, you can decide your working hours for running the auto repair shop.
It Offers Learning
Starting an auto repair shop also offers you the massive advantage of learning how to run a business. From small business administration to providing good quality auto repair services, you will learn how to execute your own shop successfully.
Hence, the car repair business is a great idea to start something of your own, provided that you have the technical knowledge. Next, we will explore some of the top tips and tricks shop owners of auto repair shops can use to start a thriving car repair shop.
10 Steps On How To Start Your Own Auto Repair Shop
If you are looking to start an auto repair shop, you will need to know how to become an auto mechanic and how to create a profitable business model. Balancing both acts can be really challenging, but our guide is perfect for helping you get started.
Alternatively, if you already have an automotive repair business, it will require time and effort to succeed. But it’s a good investment. The more customers that come to your shop, the more profit you will earn.
This step-by-step guide will also help you grow your existing business by getting more customers and repairing cars!
1. Start With A Well Thought Out Business Plan
Whether it’s an auto mechanic shop or some other business, the starting point should always be a solid business plan. The business plan will serve as your guiding light in terms of business operations and what you need to get started with your auto shop or own business.
Here’s how you can make a business plan for your auto repair or mechanic shop:
Finalize your goals
It’s important to know what the objectives and goals of your auto repair shop are. Every new business is set up with a unique mission and needs to address potential customers’ pain points to become profitable.
Having a clear vision for your auto repair shop and listing how it will help your potential customers and the target market should be your first step. You can also offer business-to-business services; for example, a local taxi company could also be your customer.
Think About Your Services
If you plan to provide maintenance services to car owners, you need to finalize the kind of services that your auto body shop will offer. Whether it’s engine repair or other collision repair services, understanding this will help you know what kind of tools and equipment you require.
This is also a good time to identify which business model you will follow; for example, you can also set up a mobile mechanic business which will require low startup costs.
Decide On A Business Structure
It’s great to have an idea, but knowing the business structure that you are going to follow is of utmost importance, especially for small businesses. As small business owners, you need to look up all of the different types of structures and decide which one will work for you.
Conduct Market Research
Market research about other car repair shops in your target area will help you understand the industry. A good way to start is by earmarking a top-performing auto repair shop and analyzing its business strategies.
A market-leading auto repair shop will offer great insights into the dos and don’ts for your car repair shop, saving you from potential losses.
Outline Your Marketing Plan
Once you know what your car repair shop will be offering in terms of services and the target for your car repair services, it’s time to get started with an effective marketing plan.
It takes time for a new business to make its mark in the industry, but you will get there with a good marketing plan. You can also invest in specialty marketing tools like SEO and digital marketing to build your repair shop’s footprint and make your business stand out.
Make Your Financial Projections
Now that you have a business model in mind, it’s time to get started with number crunching.
If you are interested in opening your own car repair shop, you should first consider your budget and available capital. You should set a realistic goal to achieve. Then you can go on to plan your finances.
You should also research the costs of owning a repair facility. Finally, you should compare these costs to the profits you expect from this endeavor.
And you should determine how much money you need to invest to achieve a return on investment.
You need to know the amount of capital you would need to inject into your car repair shop to get started, sales projections, and the amount of money you expect to make.
2. Decide On Your Legal Structure
You need to finalize the legal structure of your repair shop. You will have many options from setting up a sole proprietorship to a partnership. You will have to research all the different types of structures, their pros and cons, and then decide on a structure that will work for your repair shop.
It’s usually a good idea to stick to a structure for your car repair shop that makes small business administration great and separates your business assets from personal ones.
Here are a few structures you can choose from:
- Sole Proprietorship
- Partnerships
- Limited Liability Company
- Corporation
This is also the time to get yourself a legal team and iron out your legal documentation. For example, you will need to purchase a business license. Apart from the business licenses for small businesses, you will also need to explore insurance options.
From commercial property insurance to general liability insurance, it’s important to get business insurance for your auto repair shop.
3. Set Up Your Own Business Bank Account
Another key step is to set up your business bank account. If things go south and you experience bankruptcy, this will be of great importance. Having a business account can save your personal assets from being liquidated in the recovery process.
Having a business bank account is also a requirement for applying for a bank loan and conducting other financial transactions. It will also make the shop owners’ accounting and tax filing process much easier.
4. Decide On A Location For Your Shop
Now comes the fun part. It’s time to look for a nice space to set up your space! Having your own space will also help you house your team of auto mechanics and provide a platform to network with your existing customers or even new ones.
You can also choose a strategic location, for example, one that is near a car dealership just to target customers. Or you can take your competition head-on and get yourself a location right in the middle of where all the other repair shops are located.
5. Get Yourself The Necessary Equipment
Now that you have a space for your business, it’s time to purchase equipment! The total cost for this should already be factored in your business plan. But if you do need more investment, you need to know how to raise money from investors.
For getting equipment, you also need to focus on your capacity. For example, you need to think about how many customers and how many cars you will cater to each day, and how much equipment will be required.
To improve your cash flow, you can also lease equipment and make the lease payments as you go.
You should invest in quality tools. This will help you complete your repairs faster. You should always provide a full service. Make sure that you have all of the parts necessary to complete your repairs.
6. Hire A Team
Depending on the scale of your business, you need to get yourself a solid team that can repair cars and also helps you in running the show. Having a technically qualified team will also help you in staying ahead of other businesses in the industry.
You should consider your employee’s qualifications and experience while finalizing employee salaries. Remember, money serves as the best motivator, especially for a new business. Therefore, you might need to offer higher than market salaries to attract top talent.
Again, all of this needs to be part of your business plan and financial projections.
Remember that it takes time to gain a reputation as a reliable auto repair facility but a good team can help you do that faster. And the more customers you get, the more money you will earn.
So, keep in mind that you need attract top talent and fresh blood to your repair shop to be successful.
7. Get The Necessary Certifications
The automotive industry is a tricky one and requires certifications. For example, you may need an ASE certification depending on the services that you are offering. You may also require a certification from the environmental protection agency if you will be working on vehicle air conditioning.
You need to explore which certifications you will require to operate.
8. Set Up A Nice Marketing Strategy
Now that you have all of your operational details in order, you need to market what your shops specialize in and attract customers.
Marketing is an essential component of every business, especially a car repair shop. Most people want to get their car fixed so that they will come to your shop. You need to provide the best service to attract more clients. You need to develop a good marketing strategy.
You can have a business card or flyer. You can put your advertisement in a local newspaper. You can also advertise online through social media sites. You can give discounts to customers who are loyal to you.
9. Invest in Automation
To improve the efficiency of your business, you should invest in automation. For example, getting an automotive shop repair software will help in streamlining many of your operations. This will cut down costs, improve efficiency and boost your profits.
10. Network With Other Players In The Industry
Repairing a customer’s car using the best quality process is not the only thing you can do as a shop owner to make your mark in the industry.
It’s also a good idea to market with more players in the industry. By connecting with people in the automotive industry, you can access all sorts of information that can help you grow your business.
You can find out what is new in the industry, what companies are doing right and wrong, and what people are saying about certain topics.