
- Start by writing a detailed company description. For instance, address whether you’ll have a full-service shop of specialize in one service. ...
- A well-developed business plan will help at every step of the process. ...
- Don’t think of a business plan as a tool to help you run a business. ...
How do I start a collision repair business?
Starting a collision repair business requires a complete, written business plan. Hank Nunn is a 35-year collision industry veteran. He is now retired. There are many reasons you may contemplate opening your own collision repair business.
What to know before opening an auto repair shop?
Opening an Auto Repair Shop: 6 Things You Should Know. 1 1. Get Certified. You’re not required to have ASE certification to work on cars, but without it, you might find it substantially more difficult or ... 2 2. Know the Startup Costs. 3 3. To Specialize or Not To Specialize. 4 4. Get Legal Advice. 5 5. Set up Interviews. More items
What is the best business structure for a collision repair company?
Which business structure is best? Most start out as sole proprietorships or partnerships. The best form for collision repair centers is probably a form of corporation. Work with a business attorney and an accountant when deciding your business structure. You might as well start out with the proper structure.
What is the best form for a collision repair business?
The best form for collision repair centers is probably a form of corporation. Work with a business attorney and an accountant when deciding your business structure. You might as well start out with the proper structure. Be very careful with partnerships.

Is owning a body shop profitable?
Average Profit of a Auto Body Shop In general, a larger auto body shop can earn $100,000 per year, and mechanics themselves can make between $30,000 and $50,000 per year.
How profitable is the auto collision business?
Profit Margins for Parts On average, according to the Body Shop Business website, the sale of parts generates between 36 to 44 percent of sales proceeds, while parts produce only 20 to 28 percent in profit margin. The reason for this has to do with style and control.
What is needed to open a body shop in California?
In California, you will need a resale permit and, most importantly, to be registered with the Bureau of Automotive Repair (BAR). The BAR can be found online on the Consumer Affairs Department website. You will also need a Hazmat/EPA permit.
How many collision repair shops are in the US?
There are 59,781 automotive paint and body shops in United States.
How much does a mechanic shop owner make a month?
Auto Repair Owner SalaryAnnual SalaryMonthly PayTop Earners$81,500$6,79175th Percentile$57,500$4,791Average$52,969$4,41425th Percentile$31,500$2,625
How do body shops increase revenue?
Effective body shop marketing strategies to increase profitsSocial media. First and foremost, let's start with online presence. ... Referral marketing. Referral marketing is one of the least expensive and most effective ways to market your business. ... Community involvement.
Is car painting profitable?
Automotive painting is not only a proven and stable industry, it can also be a very profitable business venture to set in motion.
Do you need a mechanic license to open a shop in California?
Licensing Requirements for the Automotive Repair Industry Any automotive repair shop in the state of California must be registered with the B.A.R., and should be able to provide their licensing information to you upon request. Requiring the automotive repair shops to be registered and licensed provides accountability.
Who regulates auto repair shops in California?
The Bureau of Automotive Repair (BAR)The Bureau of Automotive Repair (BAR) licenses and regulates automotive repair dealers, Smog Check stations and technicians, and brake and lamp stations and adjusters. BAR also administers the Smog Check Program.
Who is the largest collision repair company?
CaliberToday, Caliber dominates the $40 billion U.S. collision-repair industry, which is highly fragmented with tens of thousands of small, mom-and-pop shops. Caliber and three other big companies—including Dallas-based Service King—together own only about 12 percent of the market.
How big is the auto repair industry?
Auto Mechanics in the US - Market Size 2002–2027$68.1bnAuto Mechanics in the US Market Size in 20223.6%Auto Mechanics in the US Market Size Growth in 20220.3%Auto Mechanics in the US Annualized Market Size Growth 2017–20221 more row
How many car mechanics are there in the US?
National estimates for Automotive Service Technicians and Mechanics:Employment (1)Employment RSE (3)Mean hourly wage629,7800.7 %$ 23.07
Do you need a license to open a body shop in Florida?
Technicians must have certification issued by the National Institute of Automotive Service Excellence, or local certification issued by the American Advanced Technicians Institute Corporation. Additionally, a person or entity may not advertise auto body shop services without maintaining a current license.
Who regulates body shops in Texas?
Auto Repair Shops: Compliance Resources - Texas Commission on Environmental Quality - www.tceq.texas.gov.
Due to the spread of the coronavirus, is this business essential?
Yes. Based on current information across multiple states with emergency orders, this business provides essential goods and services.For more inform...
What are the costs involved in opening a car repair shop?
Costs for starting a shop vary, but generally include: Business license: $50 to $100. ASE certifications: $36 registration fee, one time, plus $39...
What are the ongoing expenses for a car repair shop?
Ongoing expenses for the business include shop rental (unless the business owner owns the shop building), insurance, and labor costs. Mechanics can...
Who is the target market?
Clients for auto repair businesses are unique in that they all have one thing in common: a broken or serviceable vehicle. The best types of custome...
How much can you charge customers?
Labor rates vary depending on how the shop is set up. At a dealership, mechanics are paid differently than at an independent shop. One of the main...
How much profit can a car repair shop make?
According to US News, mechanics make between $30,000 and $50,000 per year. So, a one-man shop could expect to make around this much. The owner of a...
How can you make your business more profitable?
Making the business more profitable isn’t easy. Owning a shop is hard work. Pulling in extra income is usually a matter of specialization. Converti...
Is this Business Right For You?
This business is good for people who are mechanically-inclined. In most states, a license is required to work as a mechanic. Each vehicle manufactu...
What happens during a typical day at a car repair shop?
Business owners usually have to check maintenance logs first thing in the morning, check upcoming appointments, and meet with shop managers about v...
What are some skills and experiences that will help you build a successful car repair shop?
Mechanics need special training, usually Automotive Service Excellence (ASE) certification, in addition to general automotive education. Some high...
Are You Ready to Start Your Own Collision Repair Shop?
Auto body shops will always be needed, so starting a collision repair shop is a solid, sustainable idea as well as a lucrative business opportunity. However, before you take the plunge, you need to ask yourself if you’re really ready.
How to Start a Collision Repair Shop and Succeed
Use these guidelines to get your business off to a great start, and hit the ground running by learning more about how a Forklift Wrecker can help your new collision repair shop succeed. Contact our team online or call 877-593-6959.
What is a car repair shop?
A car repair shop business is generally run out of a “garage,” a retail location uniquely equipped to store and repair cars. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
How does an auto body shop make money?
An auto body shop or car repair shop makes money by charging a flat fee or hourly rate for service. In some shops, owners set routine maintenance fees, charging a set price for simple maintenance like an oil change. In other shops, all work is based on parts and labor cost.
What is a CO in a garage?
A CO confirms that all building codes, zoning laws and government regulations have been met. If you plan to lease a garage: It is generally the landlord’s responsibility to obtain a CO. Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an Car Repair business.
How much does a mechanic make an hour?
Mechanics can be paid anywhere from $25 flat rate per hour up to $100 per hour . Insurance can cost shop owners $4,000 per year. Overhead and supply costs vary, but may cost a shop between $10,000 and $20,000 per month, depending on the size of the shop.
Is owning a shop hard?
Owning a shop is hard work . Pulling in extra income is usually a matter of specialization. Converting a general auto repair shop into a transmission specialist, for example, would help increase profits due to the fact that the shop can charge customers more for specialized work.
What happens when you work on the shop floor without ownership?
When you work on the shop floor without ownership, your earnings top out at your salary or hourly wage.
Do you need a mechanic for a small shop?
If you have a very small shop, you might do all of the work yourself, but you will probably still need at least one employee to handle telephone calls and customers. If you have a couple of lifts and want to maximize your capacity, you’ll need additional mechanics to help service vehicles.
Is Advanced Technology Institute a warranty?
DISCLAIMER – Advanced Technology Institute (ATI) makes no claim, warranty or guarantee as to actual employability or earning potential to current, past or future students or graduates of any educational program offered. The Advanced Technology Institute website is published for informational purposes only.
What can an attorney do for a body shop?
Additionally, the attorney can help you draft contracts and leases and can provide legal advice for many of your business decisions. Getting Started. Starting a new body shop or expanding an existing one will prove to be one of the most exciting (and stressful) initiatives you’ll ever experience.
How much does it cost to set up a corporation?
The cost to set up a corporation will likely run $2,500 or more even for a small shop. There also are annual filing fees to be paid in most states that can range from $25 to $500 or more. The administrative costs of accounting and tax preparation can also be more expensive than for other forms of organization.
Can you compete with other small shops in a rural area?
In a more rural area, you’ll likely be competing against other small shops with service and price at an equal level in terms of attracting collision repair business. In an urban area, however, you’ll likely have at least one consolidator with which to compete.
2. Form a legal entity
A limited liability company (LLC), sole proprietorship, partnership, and corporation are the options available for your legal structure – each has its advantages and disadvantages in terms of taxation.
3. Secure financing
You will likely need a loan to help pay for equipment, location acquisition costs, employee salaries, insurance coverage, etc. And every bank and/or investor will want to know the same thing: “Will you be able to pay us back?”
4. Obtain permits & licenses
Certain permits and licenses are required before one can legally run an auto repair shop; businesses can be subjected to heavy fines, or even sealed, if these regulations are not followed.
5. Open a business bank account & get a credit card
A dedicated business bank account and credit card can help protect your personal assets in case of bankruptcy or if any legal action is taken against your auto repair shop.
6. Setup business accounting
Whether you run a real estate business or an automotive repair shop, keeping a detailed and organized history of your income, expenses, assets, and liabilities is critical to understanding your business’s financial performance over time. It will also help you file annual taxes faster because your accounts would already be in place!
7. Get business insurance
Obtain insurance coverage to protect your shop from any unforeseen incidents, such as accidents or natural hazards.
8. Hire the right people
From mechanics to an administrative assistant, you will need skilled individuals to help with day-to-day operations. Finding the right employees should be a top priority for you, as auto repair technicians will influence how well your business performs.
Federal Requirements
This isn’t a license per se, but it is important for an auto body shop to know, is the Environmental Protection Agency (EPA) has requirements for paint stripping and surface coating operations.
State Licensing
Every state regulates auto body businesses a little differently, and it can be complex finding what requirements there are, but all require some sort of state licensing or registration.
Local Licensing
If the thought of researching the federal and state requirements wasn’t enough, many cities also regulate body shops.
General Business License or Permit
Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.
Federal Employer Identification Number
The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).
Sales Tax Permit or Number
In order to sell parts and/or offer certain services, a state sales tax permit (or tax ID number) may be needed. This permit creates an account number with the state’s Department of Revenue or a similarly named state taxing agency.
Resale Certificate
When buying products such as bumpers, fenders, and paint that the customer pays for after the vehicle is repaired, the business can purchase these items tax-free. A resale certificate allows a business to purchase inventory, and instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.
