In this post, you’ll find the steps for starting an Auto Repair Shop along with a few important points to consider, followed by a unique collection of resources you can use during the start-up phase and when your business is in full operation.
The Steps to Opening an Auto Repair Shop
Steps to Starting an Auto Repair Shop
1. Make Sure Running a Business Is Right For You
Decide whether starting your own business is right for you and whether you possess the necessary skills before you start.
More information can be found in the following article.
You will be more successful if you know as much as you can about an auto repair shop. Below, you’ll find insider information from industry professionals about auto repair shops.
See An Inside Look Into the Business You Want To Start for more.
Advertising to the right people will help you succeed. In addition, getting to know your target audience will make setting up your business easier.
For more, see, How To Understand Your Target Market.
3. Goals and Considerations
Setting up your business requires a vision and a goal. Otherwise, you may wander from idea to idea. As you do more research, your vision may change, which is okay but for now, start with a vision.
Answering the following questions can help determine how you want to set up and operate your automotive repair shop.
- Will you operate from home or a commercial location?
- Are you planning on one location or multiple ones?
- Will you run your business full-time or part-time?
- Will you do all the work yourself or hire mechanics and personnel to manage the business?
- What type of automotive repairs are you considering, all types, foreign vehicles, classic cars, trucks, or Off-road vehicles?
- Will you specialize in certain repairs, for example, air conditioning, electrical, Dyno tuning, brakes and exhaust, transmissions, or all repairs?
4. Choosing The Right Business Location
It is important to choose the right location for success. Poor locations will hamper your success, while good ones will help you. In addition, there needs to be a demand for auto repair in the location without an oversaturated market.
For more, see Choosing The Best Location for Your Business.
5. Choose a Business Name
Your business name must be easy to pronounce, memorable, and available for registration. The domain name of your website should also match.
See the following links for more information:
- How To Register a Business Name.
- Name Ideas for an auto repair shop
- Registering a Domain Name For Your Business
6. Business Registration
You must register your company, apply for permits, and choose the right business structure to operate legally. Of course, your business structure will differ depending on your financial situation and how big an operation you intend to run.
See, How to Register Your Business for all the details.
7. Create Your Corporate ID
Several components of a corporate identity include a logo, business cards, stationery, promotional items, brochures, etc. The necessary parts can be added after creating a logo and business cards. To positively impact your customers, make sure your design is professional.
See A Complete Introduction to Corporate Identity Packages for more.
8. Estimating Your Startup Cost
During the first few months of your business, you will need a lot of money to get it off the ground and running. Make a list of the items you’ll need, and as you research your costs, you may find other items you need to consider.
For more, see, Estimating Start-up Costs: Are you Missing Anything? Also, see, Business Expenses To Consider.
9. Writing a Business Plan
Having a business plan will help you get a clear picture of your business and keep you on track, and it’s essential if you plan to get a loan or attract investors. Below is a link that outlines a few ways to create one.
Details can be found in How to Write a Business Plan.
10. Set up Your Banking
The finances of your business and your personal life must be separated. A business checking account is the best way to accomplish this.
A merchant account will also allow you to accept credit and debit cards.
Read the following articles to learn more about business banking.
- Choosing a Business Bank
- How To Open a Business Bank Account
- What Is a Merchant Account, and How to Get One?
11. Get the Funding for Your Operation
Getting a startup loan is difficult because lenders avoid funding startups since they consider them high-risk.
With a good business plan and collateral, you can get a business loan, despite the difficulty.
For ideas, see our article, Getting a Small Business Loan.
12. Software Setup
Specific software can enhance operations and help you to effectively manage your business.
Check out the links below to learn more about your business software.
Consider reading reviews and researching what others have said about the software packages you are considering.
13. Get The Right Business Insurance
Having the right insurance is essential before starting a business. By speaking with a qualified insurance broker, you can get insurance protection for your customers, employees, and property.
See the following links for more information about business insurance:
14. Choose Suppliers
A good supplier can streamline operations, while a bad supplier can create disruptions. Long-term relationships require a supplier you can count on.
Details can be found in our article, How To Choose a Supplier, for tips and insights.
15. Physical Setup
Your operation’s layout will be the focus of this step. Your layout must be organized, so you can easily put things away and find them.
It is important to have an appealing layout so that customers will have a positive impression if they stop by. Your office, where you’ll spend most of your time running your company, is no different.
You should also put up your business sign that indicates you are almost ready to open.
For More, See the following articles:
16. Creating a Website
In addition to allowing you to communicate with your customers, your website can help market your business. Therefore, your site must be mobile-friendly and quick to impress users.
Register a domain name and sign up for a decent hosting account if you want full control over your website.
For more, see our page on How to Build a Website for Your Business.
17. Create an External Support Team
You can utilize an external support team for professional services or for consulting. Using your team’s services doesn’t have to wait until it’s fully developed, which may take months or years.
List potential team members and consider meeting with them. For example, your team members might include a lawyer, financial advisor, accountant, banker, IT professional, and marketing expert.
For more, see, Building a Team of Professional Advisors.
18. Hiring Employees
Hire only as many employees as you need if and when you hire employees. Having too many employees will increase your operating costs and reduce your profits. Rather than assuming a person will fit a specific job, ensure they are a good match.
In addition, hiring mistakes can result in lost time, productivity, and money that could have been put to better use; plus, when the hiring process fails, you have to start over from scratch.
See How and When to Hire a New Employee, for the details.
Points to Consider Before Starting
In this section, you need to consider several important points when opening an auto repair business. First, you will be given an overview of what to expect and a few tips to keep in mind before you begin.
Considerations for Starting a Business
Owning a business isn’t for everyone. Most of the time, it involves a lot of time, effort, and hard work. So before starting your business, consider these factors carefully. The right reasons for getting into business, figuring out your skillset, and other considerations are all part of the process.
For all the details, see our page on Business Start-up Considerations.
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. In addition, you must have knowledge of various vehicles and excellent mechanical repair skills.
As a garage owner, you have to remember that most of your customers will come in when they have a problem and often can’t afford to pay for the repairs.
They usually use their credit cards, easily becoming 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.
- Problem-solving skills.
- Troubleshooting skills.
- Dealing with frustrated people.
- Scheduling skills.
- Keeping strict deadlines.
- Dealing with the unseen (This is common on many repairs.)
- Giving accurate estimates.
- Common business skills.
- Licensed mechanics
- Shop manager
- 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 — 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, benches, storage shelving, and bins.
- Feeler gauges, assorted calipers, micrometers.
- Assorted wrenches.
- Assorted sockets.
- A complete set of common tools, e.g., hacksaw, hammers, screwdrivers, pliers, vise grips, Allen wrenches, chisels, measuring tapes, rulers, files, troubleshooting lights, extension cords, etc.
- You will purchase a wide variety of assorted specialty tools 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 licensed mechanics.
- See our page on Licenses and Permits.
Marketing is an essential part of running a business. There is no business without customers. It is difficult to gain customers without marketing. Marketing needn’t be complicated. You are merely raising awareness of your business, products, and services. For example, putting up a sign in front of your business is marketing; telling other people about your business is marketing, and handing out business cards is also marketing, so as you can see from the examples, marketing can be simple.
- 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 will find that many 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 worse, 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 issues 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 videos about some vehicle maintenance, and play that on a TV in the waiting area. You could offer a service package with each maintenance tip and create an opportunity for the customer to ask 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 offer a 10% discount after a customer spends $1,000 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 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:
- Oil change
- Tire rotation.
- Brake check.
- Front-end check.
- Transmission fluid check.
- Computer scan.
- Electrical check.
During these checks, problems may show up that need attention and this is added work for your shop.
When you are a business owner, you can effectively market your business by doing a little at a time, testing your results, and doing more of what works. Have a Look at the Latest Articles for Marketing an Auto Repair Shop.
Pros and Cons
- It can be very profitable.
- With good marketing, you could have a busy garage.
- There is always a demand for auto repair.
- 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, which can be expensive.
- You’re always dealing with people’s problems.
- People who need your services pay 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.
Points to Consider about Revenue and Profits
- Auto repair is a profitable business model. One of the issues that your profit depends on is whether you’re doing the work yourself or 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 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.
Depending on zoning restrictions, an automotive business can be run from your home.
Here you’ll find a few resources that can be helpful to you during the start-up phase and after you’ve launched your business. Of course, you can return to this page at any time to use these resources.
Shops for Sale
Consider looking at businesses for sale before starting your own business from scratch. There are pros and cons to purchasing an existing company.
The pros include:
- The start-up phase is bypassed.
- The business’ success has already been determined.
- You gain a customer base when you purchase a business.
- Your revenue begins when you take over the business.
- The reputation that the business has earned is transferred to you.
There are some cons to buying an established business, including:
- It is more expensive to purchase an established business than start one from scratch.
- You purchase both the good and the bad with a business purchase.
- If the business is not set up how you want, you’re better off starting from scratch versus making extensive changes that could disrupt operations.
However, it doesn’t hurt to browse the listings on the market. You may or may not find a good match, and the worst that can happen is that you gain a stronger understanding of the auto repair business. See the latest Google search results for auto repair shops for sale.
Keeping up with the latest tips, insights, trends, and information regarding your industry is important. However, finding this information in one location can be a challenge.
In the link below, you’ll find a list of publications that can help you stay current with industry news. It is now easier to find the information. You just have to use it.
To see what’s new in the automotive industry, visit the following link at least once a month. Click here for the latest publications related to an auto repair shop.
Industry Trends and Statistics
Analyzing industry trends and statistics may provide you with tips and insights you weren’t aware of. Look at trends and statistics to tell if a business is improving, declining, or shifting.
Being familiar with your industry is essential for business owners. You can look at glossaries for a head start or wait to pick up terminology by experience.
Association membership can be beneficial. Several provide publications and news to members. In addition to hosting events, many of them also host networking events.
Click Here To View Associations Related to the Auto Repair Industry. You may also want to check out our page for tips and insights about Joining a Trade Association.
Top Auto Repair Shops
Studying other businesses can learn what’s available in the market, pricing, services, and other ideas. As a result, you might develop a unique idea or discover something your business lacks. But I don’t believe in constantly looking at the competition. Rather, I like to know what my competition offers and focus on providing my customers with the best products and services I can provide.
Auto Repair Tips
Whether you have experience in the industry or not, keeping up with the latest auto repair tips is a good idea. Getting a refresher is the worst that can happen.
Reading books about your industry can also help you gain a deeper understanding. Non-fiction books have the advantage of not reading them from cover to cover. Instead, you can refer to the table of contents or the index to find the chapter containing the information you’re looking for.
Your chances of success rise as you become more skilled and knowledgeable about your business. Check out some of the latest publications related to auto repair shop training.
You should keep an open mind when it comes to training, especially if you are familiar with the subject. You can review what you already know and gain insights into issues you don’t understand.
A good way to find news about auto repair is to search Google News.
You can also set up a Google alert to notify you of a new post related to the auto repair industry.
Videos on YouTube
Videos on YouTube contain tips and insights you can use to expand your industry knowledge if you’re a visual learner.
While watching a YouTube video, you will see related topics. Because of these, I can discover videos I hadn’t thought about. So you may want to keep an eye out for them.