Auto Repair Business Overview
Running an automotive repair business involves repairing and maintaining a variety of vehicles.
To be successful in this type of business, you have to have good problem-solving skills. You must have knowledge of various vehicles, as well as excellent mechanical repair skills.
As a garage owner, you have to keep in mind most of your customers will come in when they have a problem, and a lot of times they can’t afford to pay for the repairs.
They usually use their credit cards and they can easily become stressed out about the repair.
Knowing this, it’s your job to get the repair completed as cheaply as possible for your customer without compromising the quality of the repair. You can’t just guess the problem and keep putting on new parts.
- Problem-solving skills.
- Troubleshooting skills.
- Dealing with frustrated people.
- Scheduling skills.
- Keeping strict deadlines.
- Dealing with the unseen (This is common on a lot of repairs.)
- Giving accurate estimates.
- Common business skills.
- Licensed mechanics
- Common staff positions
Hours of Operation
Regular business hours are required for this type of business. However, you can open a half-hour early and or close a half-hour later to accommodate pickups and drop-offs for people who work 9 to 5.
Equipment and Supplies
- Vehicle Hoists.
- Engine Hoist.
- Air compressor with sufficient storage and enough power to keep up with your needs.
- Air tools — air ratchet, air chisel, impact wrench, assorted air tools.
- Transmission jack, jack stands, floor jacks.
- Tire changers — tire and rim balancers.
- Diagnostic scanners.
- Fender covers.
- Air conditioning tools.
- Gas torch – MIG or TIG welders.
- Battery chargers/jump starters.
- Brake Lathes.
- Car dollies.
- Assorted brake tools — suspension tools, exhaust repair tools.
- Headlight aimers.
- Gear pullers.
- Oil change and lube equipment.
- Parts washers, pressure washers, parts handlers/stands, vacuums, floor fan.
- Shop Press.
- Bench grinders, work tables, and benches, storage shelving, and bins.
- Feeler gauges, assorted calipers, micrometers.
- Assorted wrenches.
- Assorted sockets.
- A complete set of regular tools e.g., hacksaw, hammers, screwdrivers, pliers, vise grips, Allen wrenches, chisels, measuring tapes, rulers, files, troubleshooting lights, extension cords, etc.
- A wide variety of assorted specialty tools that you will purchase over time and as needed.
Monthly Expenses and Operating Costs To Consider:
In addition to our list of common business expenses, your shop will require a budget for the ongoing cost of supplies, like, screws, nuts bolts, assorted fastening supplies, oxygen, acetylene, drill bits, wire wheels, grinding discs, environmental disposal fees, etc.
- When you work on customer vehicles, you will need to have licensed mechanics.
- See our page on Licenses and Permits
- You could offer huge discounts on oil changes. For example, just cover the cost of the product and don’t make any money on the oil change. Now, with the discounted oil change, offer a free 10-point inspection. During this inspection, you’re going to find a lot of cars will soon need brakes, tires, exhaust systems, etc. Here’s where you can gain a lot of business. You can address the problem before it gets too bad, saving the customer money and making the repair sooner for you. This is just an idea — you can tweak it and make it your own.
- Create a maintenance record for your customer’s vehicle, so you and your customer can keep track of all the repairs and maintenance. This makes you the person in charge of the vehicle’s health, and the customer can have peace of mind when it comes to repairs and maintenance. It also makes the customer think twice before going to another garage for repair.
- Offer extended guarantees for your work. Be sure you have clear warranties that are specific to the repair.
- Make deals with local body shops to repair the issues that are beyond their scope of work. Offer them a percentage of each repair cost or a referral fee.
- Create an advertorial in your local newspaper, giving tips to people and offering a coupon.
- Get some local radio time. For example, if a huge storm is coming, you could contact your local radio station to offer safe driving tips during the storm and how important it is to have your brakes and tires in good condition while driving through these stormy conditions. You could offer listeners a free inspection when they drop by your garage.
- Create a comfortable waiting area for your customers. Create some videos about some of the most important issues to keep your vehicle safe and maintained and play that on a TV in the waiting area. With each of the maintenance tips, you could offer a service package and have the customer ask you about it.
- Have Wi-Fi, free coffee, and free soft drinks. You want to make your customer feel comfortable when they come to your shop for repairs.
- Create offers. For example, offer a 10% discount on labor for every 10 visits or for every $1,000 a customer spends on repairs during the year.
- You need to make a deal or get an account with a parts supplier. Sometimes, you make more money on the parts than you do on the actual repair. This is a good source of income for your business.
One last tip, you could also create maintenance packages and offer discounted rates to keep existing customers returning and bring in new customers.
Maintenance Packages Could Include:
See Our List of the Latest Business IdeasThanks for dropping by. Before you leave be sure to have a look at our list of the newest business ideas to spark your creativity.
- Oil change
- Tire rotation.
- Brake check.
- Front-end check.
- Transmission fluid check.
- Computer scan.
- Electrical check.
During these checks, issues may show up that will need attention now or in the near future.
Pros and Cons:
- Can be very profitable.
- With good marketing, you could have a busy garage.
- You become a problem-solver with all your thinking processes.
- Some problems are difficult to diagnose, especially if they are not occurring constantly.
- In some cases, special tools are needed that aren’t used very much, and these can be expensive.
- You’re always dealing with people’s problems.
- People who need your services are usually paying for something they don’t want to pay for.
- Trends are changing to electric cars.
- A lot of repairs need to go through a dealer.
- If you hire mechanics and they are on the clock, you must have enough business to keep them busy or you will lose a lot of money.
- When you charge customers for repairs, you must have licensed auto mechanics working on the vehicles.
Profitability and Revenue Considerations:
- Auto repair is a profitable business model. One of the issues that your profit depends on is if you’re doing the work yourself or you’re hiring mechanics. When you hire mechanics, you need to make sure you have enough business to keep them going, especially if you’re paying by the hour.
- Paying mechanics by the book means the mechanic is getting a flat book rate, which is less profit for the shop, but it’s safer if you don’t have a busy shop.
- A profit boost is when you charge by the book, and you are able to do the work in less time. You still charge the book rate, which gives you an extra profit boost.
Start-up Cost Considerations:
Your start-up costs depend on how you’re starting your business. For example, if you’re buying a garage with eight bays and buying top-of-the-line equipment, then your start-up costs will be great compared to starting your business from your home garage and building a customer base. So, how big you plan to start will reflect what kind of start-up costs you need.
Full-Time or Part-Time Business:
An automotive repair business can be part-time or full-time.
An automotive business can be run from your home depending on zoning restrictions.
Starting Your Start an Auto Repair Shop
Many of the steps you’ll need to address when starting a small business include:
- Writing a Business Plan
- Define the Type of Company You Will Form
- Get Your Tax ID
- Get Special Permits
- Registering Your Business
- Choosing a Bank
In my article, The Essential Steps To Start a Business you’ll find the information you need as well as important points to consider before you start a business.