- Obtain a license to operate your business. States have different licensing requirements for auto repair business.
- Purchase insurance for your business. Before approving your application, most states require you to have a minimum amount of insurance for liability purposes.
- Fulfill your administrative needs. You will need a clear financial system in place in order to operate as a business and to anticipate potential pitfalls. [6]
- Implement a marketing strategy. Define your core values as a brand. What are three words your customers should think of when they think of your business?
- Make alliances with car dealerships. Some car dealers have their own mechanical shops attached to their businesses, but others don't.
Full Answer
Should you start your own car repair shop?
Most drivers now have cars that are at least 10 years old, which means that the need for an auto mechanic is growing for more consumers. Starting your own car repair shop can give you control over your own hours and allow you to reap the benefits of owning your own business. Define the scope of your business.
How to start an auto mechanic business?
To build a brand, auto mechanics need to network with any other car repair business that may require their services. Partner with local taxi companies or a limousine service, both of which would need the services of reliable auto repair shops for regular vehicle repair and maintenance.
What kind of Business is a car repair shop?
This business employs automobile mechanics who provide repairs and vehicle maintenance to consumers and businesses. The car repair shop might also offer services like custom installation of stereo and alarm systems, window tinting, and aftermarket upgrades. Ready to form your LLC?
How do I get a license to open an auto repair shop?
Check your local motor vehicle department for information about the type of license that you will need to operate an auto repair shop in your state. To obtain a license in your state, you will need to: Fill out an application. Your motor vehicle department can provide you with an application to apply for your license.
How profitable is a auto repair shop?
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. BizStats offers a breakdown of costs vs revenues. This, of course, will vary depending on your location and area of expertise.
How do I start an auto repair shop?
Start a car repair shop by following these 10 steps:Plan your Car Repair Shop.Form your Car Repair Shop into a Legal Entity.Register your Car Repair Shop for Taxes.Open a Business Bank Account & Credit Card.Set up Accounting for your Car Repair Shop.Get the Necessary Permits & Licenses for your Car Repair Shop.More items...•
How do auto repair shops make a profit?
Auto repair shop businesses make money by taking in customers' vehicles, testing them, replacing the parts that don't work, and sending the customers on their merry way. Thus concludes how auto repair shop businesses make money.
What is the most profitable auto repair?
Brake jobs A car's brakes are one of the most critical. A full-service repair shop that offers brake adjustment, repair, and replacement services will never run out of brake job customers.
How do I run a successful auto repair shop?
How To Manage An Auto Repair Mechanic Shop?Increase Mechanic Productivity.Use Automotive Management Software.Reduce Employee Turnover Rate. ... Give Discounts And Introduce Sales Offers. ... Offer Guarantee & Stand Behind Them. ... Display An Ethics Statement.Store Budget.Reward Your Loyal Customers.
How do you run a successful car garage?
8 Steps for Opening a Car Repair GarageDecide what type of car repair garage you want to open. ... Find the perfect location. ... Buy equipment. ... Get qualified (if you want) ... Get the necessary licences. ... Keep up to date with technology. ... Hire a talented team of employees. ... Market your business.
How much do shop owners make?
Retail store owners earn a median income of $51,270 per year. Those who run warehouses earn an average of $55,000 annually. And the median income for those who own construction businesses sits at $62,449 per year.
How much markup is there on auto parts?
Many automotive business consultants suggest an overall 100% markup on parts in order to achieve an overall 50-55% profit margin. This markup is important to achieve a 30 to 35% net operating profit. Shops that fail to succeed often have net operating profits of less than 15%.
Are body shops profitable?
According to Body Shop Business, profit margins on parts sales typically average between 20 and 28 percent, while labor profit margins range between 50 and 65 percent (Source).
Who is the world's best mechanic?
The Worlds Greatest Mechanic — Dave Williams.
What is the biggest automotive repair company?
Almost all of the auto repair franchises saw growth this year. Big O Tires tops the list in sales growth at 7.2 percent, with Tuffy Tire next up 3.6 percent. The rest of the companies saw 1 percent or less sales growth this year.
What is a good parts to labor ratio?
According to Bob O'Connor of Motor Magazine, a parts-to-labor ratio in the range of 0.8 to 1 is considered normal for the auto repair industry.
What does a car workshop need?
Items That Every Car Workshop NeedsA Vehicle Lift. Every workshop, from the smallest through to big dealerships, needs to have a vehicle lift or two. ... Proper Lighting. A dark and dingy workshop is a workshop where mistakes are made. ... Wall Mounts. ... Diagnostic Equipment. ... Air Compressors. ... A Good Sound System.
What is a standard automobile workshop?
An automobile workshop is a place where repairs and servicing of automobiles and automobile systems are done. In an auto-workshop various services are rendered by the technical staff during repairs and servicing of automobile systems and parts.
What is a car repair shop called?
An automobile repair shop (also known regionally as a garage or a workshop) is an establishment where automobiles are repaired by auto mechanics and technicians.
How do I register a mechanic shop in Texas?
Partnerships and corporations must obtain their business license from the Texas Secretary of State's Office. As of the publication date, the registration of a corporation costs $300 and the registration of a general partnership is $200 per partner. The cost of sole proprietorship licenses vary by county.
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...
What happens during a typical day at a car repair shop?
If the owner also works in the shop, then a typical day will involve working on a variety of different vehicles.
What is the growth potential for a car repair shop?
A small auto repair shop can be run out of an individual’s garage in some states. While licensing is usually necessary, there are typically no restrictions on how the shop owner operates the business as long as all local codes and ordinances are obeyed.
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 the best type of customer for an auto repair business?
The best types of customers are those with a service contract. Ongoing service contracts ensure steady income for the shop and reduce cash flow problems both in the short and long-term.
How do mechanics find customers?
Finding new customers is usually done by word of mouth but mechanics also network with other businesses that might need their services. For example, a shop might partner with a local taxi company or limousine service to offer regular repairs and maintenance.
How much do mechanics 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 larger shop can easily make $100,000+ per year by managing a small team of mechanics.
When do business owners check maintenance logs?
Business owners usually have to check maintenance logs first thing in the morning, check upcoming appointments , and meet with shop managers about various stock or supply needs. If the owner also works in the shop, then a typical day will involve working on a variety of different vehicles.
Why is it important to open a car repair shop?
If you are interested in opening your own car repair shop, now is a great time because the market for mechanics is currently experiencing significant profit gains. Most drivers now have cars that are at least 10 years old, which means that the need for an auto mechanic is growing for more consumers.
How much does it cost to open a franchise?
While the costs will be more on the business and administrative side than the equipment and resource side, you should still expect to spend $30,000-$200,000 to open your franchise. Guess again!
How much does it cost to join a Jiffy Lube franchise?
Do you plan to remain an independent repair shop or will you join a franchise like Jiffy Lube or Midas? You will generally need $30,000-$200,000 to join a franchise, but the advantage is that they will handle marketing and they often have a nationally trusted brand name for potential customers. If you do not have any existing customers in your current career that you know would follow you to a new business, joining a franchise might be worth the investment.
What happens if your shop is isolated?
If your shop is very isolated, it is unlikely customers will come to you, especially when towing costs are often tallied by the mile. Your location should also be able to accommodate an office for you to take care of your administrative needs and a waiting room area for your customers.
How to get more customers for your business?
Consider advertising on TV or on the radio. TV commercials and radio ads may also help you to reach a wider audience and gain new customers.
Who owns Stingray Auto Repair?
This article was co-authored by Jason Shackelford. Jason Shackelford is the Owner of Stingray Auto Repair, a family owned and operated auto repair shop with locations in Seattle and Redmond, Washington.
Do car dealers have their own mechanical shops?
Some car dealers have their own mechanical shops attached to their businesses, but others don't. You should consider approaching dealers and asking them if they could refer customers to your business. In return, you could also advertise for their business when your customers want to buy a new car. Score.
Is an auto repair shop profitable?
Without a solid foundation, no business can be profitable. And at the end of the day, an auto repair shop is exactly that: a business. That’s why it’s important to plan ahead. This is the first and most crucial step in increasing your odds of success.
Do auto repair shops get grants?
While there are no grants available specifically for new auto repair shops and mechanics, there are a number of grants available to broader subsections of the population. For example, there are government grants for minority business owners, female business owners, and veterans.
Is it free to open an auto repair shop?
Opening an auto repair shop is anything but a free endeavor. Like any business venture, a new garage or automotive repair shop will always have initial startup costs. However, for the sake of argument, let’s assume a person had little to no savings and decided to take the plunge into entrepreneurship.
How much does it cost to set up a small shop?
You will need some cash for setting up the building lease, and painting your floor, signwriting etc and buying or leasing equipment, ( In western countries between $20,00 and $100,00 is the usual cost range for setting up a small shop to a larger operation with 4 lifts.
Why do you need to outsource a workshop?
A workshop that can do everything in-house will attract more customers, and if you cannot do a job because you do not have the necessary equipment or machinery, you need to outsource it.
How long do hoists last?
I spent two years rebuilding, installing and servicing hoists. The average life of a cheap hoist is around two years before downtime and major repairs. Despite what your equipment supplier says, cheap hoists are dangerous, and when they need rebuilding parts are often not available.
What tools do you need to work on a circlip?
Hand tools, such as circlip pliers, bearing pullers, ring and open end spanners, depending on what you work on this will vary, but need to be in complete sets. A full range of inside and outside circlip pliers is essential. Hand held mechanics lamps, air guns and lines, rolling oil pans, Cooling fluid pans etc.
Why is the workshop floor important?
The workshop floor is very very important. More so than in most businesses as it must withstand stains from dirty thin and hot oil. It happens that spills do occur when doing oil changes, but more about how to stop that happening later.
Do you need to paint a floor before moving a hoist?
BEFORE you move your hoists in, you need to know that the floor is level, thick and strong and most important, treated or painted so that the oil does not soak into the concrete and weaken it , especially around the hoist uprights. Ensure the painted floor surface is skid-proof and smooth to roll equipment on.
Can you back a car off a hoist inside a building?
Remember to ensure the building is deep enough so you can back each car off the hoist INSIDE the building. Reception, office, toilets and lunch room need not be big, but should be neat and comfortable for workers and customers. A water fountain is a good idea in both reception and lunch room.
What is the next step in a business plan for an auto repair shop?
Your business plan has two objectives: to allow you to verify that the potential profitability of your auto repair shop is real, and to help you convince financial partners to invest in your project.
How to do market research?
To conduct your market research accurately, you will have to: 1 Analyze the demand on the local market: who are your potential customers? How many of them are there? What triggers their purchase (breakdowns or a need for specialized equipment such as winter tires, for example)? Is their choice of auto repair shop dictated by proximity, brand or price? 2 Study the competition: who are your competitors, and what exactly do they offer? How can you set yourself apart from them? 3 Consider the choice of suppliers: where are you going to source your spare parts, and what are the commercial terms offered by each supplier (price, choice, quality, payment terms, delivery options, minimum quantity per order, etc.)? 4 Study the sector's standards and regulations: if being a good mechanic is important, you should not forget the administrative part. Good knowledge of the regulation, licences required, but also of the standards to be respected is necessary.
Is the auto repair market impacted by economics?
Although the auto repair market is not a sector that's dramatically impacted by economic developments (even during the 2008 crisis), it continues to undergo a significant number of changes - such as the retirement of many garage owners.
Is the auto repair market competitive?
The auto repair shop market is competitive. Therefore, we advise you to carefully study the competitive dynamics within the area in which you'd like to set up your own auto repair shop, to ensure that the local market is not already saturated before doing so.
Do auto repair shops have a clientele?
Existing auto repair shops already have a well-established clientele. To stand out from the competition, you need to offer a service that can't be found elsewhere and for which your future customers will come, and, most importantly, keep coming back.
1. Streamline your operations
Investing in an auto repair shop management software can prove to be a game changer for your business. It will free you up from boring, repetitive tasks and let you focus on what really matters.
2. Improve technician productivity
The success of your automotive shop largely depends on service quality, which is directly linked to the competency and efficiency of your mechanics.
3. Prioritize the customer experience
Whether it’s scheduling an appointment or a vehicle drop off, make the auto repair journey for your customers easy and convenient.
4. Reduce your technician turnover
High turnover rates for technicians is quite common in the auto repair industry. Having to hire new and inexperienced technicians who need guidance and coaching is an unnecessary distraction, and will compromise on your service quality and reliability.
5. Grow your business
While you work on all the important stuff to keep your garage’s engine humming smoothly (no pun intended!), you also need to keep up the momentum behind its growth. Follow these basic steps to attract new customers, and have your existing ones coming back through your doors:
