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How to Start An Auto Repair Shop in 2022?

You know what they say, there’s nothing like having your own business. And if you have ever offered auto repair services in the past, starting an auto repair shop seems like the way to go!

And while having your own car repair shop seems daunting at first, a few tips and tricks here and there will help you go a long way.

We will start with the basics and gradually flesh out the concepts of starting and running an auto repair business.

So if you’re starting a mechanic shop, this detailed how-to guide will help you understand everything before you can initiate your business.

Should You Opt for an Auto Repair Business?

First thing is first, no one has ample capital to waste. So the first question you need to ask yourself is should you opt for your own auto repair shop?

To answer this question, you need to explore the feasibility and market trends of auto repair businesses.

In fact, it would really help to go through case studies on automotive service excellence to help you plan you make your business plan.

Let us help you with a quick answer to whether you should opt to start your auto repair shop!

If you have experience working in an automotive repair shop or the automotive industry in general, you should definitely consider setting up your auto repair shop.

The market size of the Auto Mechanics industry in the US has grown 0.3% per year on average between 2017 and 2022 and the demand for auto repair shops continues to grow.

The overall global sales of vehicles and cars are also expected to grow, showing that there will be a need for auto repair shops in every vicinity.

Apart from the hard facts and auto repair industry potential, there are also other reasons to start your auto repair shop:

  • The potential to make money – if you run your auto repair business with a solid business plan, there is potential to make good money.
  • Flexibility – Running your own auto repair shop offers you the flexibility to choose your own working hours
  • Putting your auto repair skills to use – If you have auto repair experience or skills, this is the best way to put your skills to use.

But one of the biggest mistakes people make when they’re starting an auto repair shop is not asking themselves whether or not they’re willing to put in the time necessary to make the shop successful.

Sure, it may seem like there are a lot of other things you could be doing with your time instead of starting a repair shop.

But the truth is that many of those things aren’t nearly as lucrative or exciting as what you’ll find in an auto repair shop.

It may be difficult at first, but starting an auto repair shop can turn into a lucrative venture if you are willing to put in the time and effort needed.

So if you’re ready to start your own auto repair shop, let’s dive headfirst into our step-by-step guide!

How to Start An Auto Repair Shop: Step by Step Guide

Articulate a Solid Business Plan

It doesn’t matter if you are setting up a car repair business or any new business, the first step is always to articulate a solid business plan.

For a car repair shop, your business plan should cover the scope of your business, goals, services, target market and operational strategy.

  • The first step is to always identify your target market and potential customers. How many customers can you serve at your car repair shop per day? What hourly rate are you going to charge? You can also look at the strategies of other auto repair shop owners for ideas.
  • The second step is to finalize the services that will be offered at your repair shop. Will you offer general services from a car repair shop? Or will you expand and offer specialized services? These are the questions that you need to plan for.
  • The third step is to finalize the operation strategy for your own shop. For example, you need to know which location you will set up your car repair shop in. Will you set up a car repair shop in the vicinity of other car repair shops?
  • How much startup costs can you cover? Do you need to raise any capital for the required business structure? Or will you use personal assets for your financing your business.
  • Finalize the legal structure of your company. Decide if you want to start a limited liability company or a partnership.

Another thing to plan for is if you will set up your own car repair shop or if you’d like to become a franchisee for other car repair shops.

Engage in Goal Setting and Planning

Goals are key to setting a plan for your business. You should begin by determining what you want to achieve with your auto body shop. You need a plan, which includes marketing, expenses, and start-up costs.

Research what it will cost you to buy the necessary equipment. Many products to perform auto body repair will cost quite a lot of money, but you have to be prepared for them.

You can also set weekly and monthly targets in terms of how many repairs you will perform.

And if you have the capability, you can also set up a mobile mechanic business arm. This will allow you to offer repairs irrespective of the location of the customer’s car.

Offering repair services with a mobile setup allows you to serve customers as and when required for example you can offer immediate collision repair services.

Get the Required Training for Your Own Car Repair Shop

There are certain regulations that you will need to follow to set up an automotive business. Getting a certification like the ASE certification can help you secure business insurance for your business assets.

Getting training and certifications will also help you in acquiring customers more easily. It will make your business stand out in the automotive repair industry.

Create a Budget For Your Business

Things like equipment for engine repair, maintenance services, and getting a business license requires a budget. You also need to set up a business bank account.

A business bank account will provide a lot of support in carrying out your professional transactions and separating them from your personal assets.

Some of the expenses and costs that you need to factor in as shop owners include:

  • Rental Expenses: Small businesses require a good location for conducting services. Small business owners often opt to rent out good locations for setting up an auto shop.

Hence, if you decide to do the same, you will have to add this cost to your budget. You will also need to look into whether you require commercial property insurance as a business owner.

  • Certifications and business licenses: Getting business licenses or certifications is also an added expense.
  • Equipment cost: Depending on what your shops specialize in, you will require equipment and tools to repair cars. That cost also needs to be added to the total cost of purchasing equipment.
  • Insurance cost: Define any insurance cost that you may have for general liability insurance etc

All of these are upfront costs that you will need to cover.

If your total cost exceeds the amount of capital currently available, you can also get a bank loan. But for that, you need to establish a plan that shows a profitable business!

You can also secure financing or raise money by reaching out to potential investors. You can also look out for small business administration loans to cover costs. Do a cost-benefit analysis between raising money and getting a bank loan.

Costs that are hard to predict upfront might include costs associated with selling or advertising.

Start Hiring Your Team

As auto repair shop owners, it’s now time to start hiring employees for small business administration and achieving your business goals.

You will need a technical team of mechanics to provide maintenance services, and resources to look after the record-keeping, and general administration of the shop.

The number and type of resources you require will also depend on what goals you have in mind for your company. If you want to operate at a larger scale, you will need more resources.

Marketing and Advertising Your Shop

We don’t really need to explain how important marketing and advertising are to a business, do we? They’re vital to keeping your business afloat. But how do you market an auto repair shop?

Well, there are several different methods you can use, but in order to succeed, you need to pick the right one for your specific business.

It’s now time to put the word out in the market about your auto repair business. For this, you need to invest in effective marketing and advertising. It’s also a great idea to take your business online and have a strong digital presence in this day and age.

The first step for this would be to set up your own website. For that make sure you have a catchy logo and tagline that can be showcased right next to your business name.

Finding new customers can be tricky at first, but once you build up a solid client base, word of mouth can be one of the best advertising methods to get repeat customers.

People want to know that they can trust to get services from your auto repair shop.

It’s also a good idea to offer specialty tools or services to customers which can help you stand out from most businesses in the industry.

You can also move towards a business-to-business model and offer services to a local taxi company or a limousine service.

You could try these tactics:

  • Putting up advertising posters in the area
  • Advertise on social media and run sponsored ads
  • Use search engine optimization techniques to gain traffic to your website through Google searches
  • Create promotions and possible partnerships with related business
  • Host a grand opening and invite all related people in the industry to gain traction

Make sure you provide quality services to clients once you start getting them.

The Bottom Line

You’ll be amazed at how simple it is to open an automobile repair shop. You can start out small and grow from there.

Start by offering basic repairs and services that will help you build your customer base slowly.

You want to keep your customers coming back time and again, so consider offering them the first oil change for free.

Do it well, and hopefully, the word-of-mouth reviews will spread, and you’ll gain repeat customers and even new clients.

And once you have managed to do that, just focus on providing quality services no matter how big it is!

Read more:
How to Start An Auto Repair Shop in 2022?