Auto Repair Shop

How to Start an Auto Repair Shop

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Most mechanics use their skills working for someone else. But if you have business skills and access to some capital, you’ll be in a good position to learn how to start an auto repair shop of your own. You should be aware that it takes a lot of hard work of course, so you’ll need to prepare accordingly.

One of the first things you will need to do is formulate a business plan. I’m sure you’ve heard the saying before: If you fail to plan, you plan to fail. Every business needs a plan. And this plan is more than simply, “We’ll rent a shop and fix cars for money. If we get enough customers, we will make a profit.” No. You’ll need to set a goal on where your business is headed. Your plan will also include things such as advertising methods and expenses, as well as particular (specific) start-up costs that you’ll have to pay—that diagnostics machine costs $5,000?

You don’t necessarily have to open your own auto repair shop from scratch. You could look into buying one that already exists. You’d already have a suitable building to use, as well as a few employees who may stick around under the new ownership, as well as returning customers and an established marketing presence.

Another way to get a good head start is to purchase an auto repair franchise. You would work with an established company and operate under their name instead of doing business under your own. There are plenty of benefits of starting a franchise, but there are also a few drawbacks.

The most important benefit is that you’ll have an established brand-name that customers will recognize. Training and equipment will also be provided generally. However, you may be severely limited with the way that you do business when operating a franchise.

If you want to start your own business, then you will need to pick out a proper location. Your location will play a large role in whether your business succeeds or fails. Shops located by highways or in the middle or busy cities typically fare much better.

You may even be able to find an old building that already has all the necessary equipment in it. When picking out a location, make sure that you take into account how much the lease will cost you on a monthly basis. The location will also need to be zoned for your particular type of business. This is important.

Another important expense that you’ll have to pay when starting an auto repair shop is insurance. You’ll need insurance for your garage in cause there’s a fire, natural disaster or an employee injures themselves. As such, you will also need worker’s compensation insurance in case an accident happens.

You may not have the cash to pay for everything you need to start an auto repair shop, so you will need to get a loan from a bank or a personal loan from a friend or family. You can expect to pay anywhere between $30,000 and $100,000 to get your business started. You’ll need to pay for the building as well as any equipment. You can save some money by leasing the equipment instead of buying it.

The amount of money that you’ll have to pay will mainly depend on the size of your operation. Starting a shop that can repair up to four cars at a time will obviously be more expensive than one that can only service two.

When you start an auto repair shop, you also need to decide what services to offer. You could specialize in a certain area such as heating and air conditioning systems or brakes. However, doing so would significantly limit the amount of money that your shop could make. Most shops are general, but remember that customers love niche businesses, and if you specialize in say, engine repair and tuning for high performance autos, you’ll have a much more established credibility to start off with.

However, sometimes it’s best to offer as many services as you can. Even if you or your mechanics don’t have the experience to perform a particular service, you could outsource it instead.

It’s important you look into advertising when starting an auto repair shop. You will need to get customers in the door. Make sure you get a listing in all local online directories, Google places, the yellow pages and consumer review sites such as Yelp and CitySearch. If you can afford it, you may also want to look into radio and television advertising. Just make sure you take the time to do it carefully.

Always start out by creating a business plan that outlines your goals, and remember it may take months to a year to finally be profitable. The last piece of advice (if applicable), is to start repairing autos in your home garage, or otherwise rent some small space and start doing simple repairs, and build up your customer base and repetition. For example, offer the first oil change free, do it quickly and very well, and make sure subsequent oil changes are cheap too. Do it for all your friends, family, and neighbors, and soon the word will spread about how fast and economical you are. One you build up a base through simple oil changes, other requests for service will come, and once you open your shop, you will already have guaranteed traffic.

Image from Dja65/Shutterstock

Automotive.com

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16 comments

  1. I am planning to establish an auto repair shop, I will like to know where I can get qualified and certified technicians who are willing to work overseas, where I can get a list of the best and latest tools and machineries and how much they cost for startup and where to buy a constant supply of spare parts.
    Thanks

  2. sir i want to start a car repairing and servicing (garage) business so,can you please tell me the minimum and the maximum investment for the small garage……..

    • Prem,

      Thanks for your message. If you’d like more information about starting your own garage, we’d suggest you look at the websites shared in the article. We don’t have that knowledge here.

      If there’s anything else I can help you with, just let me know! Thanks for your time and effort.

  3. Look for discounts wherever achievable. HVAC systems might be rather expensive, so you’ll need to seek out whatever discounts and offers that could possibly be around. When buying about, ask about any current specials operating, and look for discounts which might be related to Energy STAR compliance. Each can save you plenty of cash.

  4. I am a student in high school still and I plan to start my own shop, so I need some guidance in order to do so. Can u give me some advice on where to start, so I will be prepared. Please contact me as soon as possible.

  5. hello sir, i wanna start up the garage business in canada and i am not so much financally strong so tell me predicted cost of starting the garage in canad, thanks

  6. ask how can we manage a shop that we the employee now our the owner of this shop and we rent the shop for 60th pesos can you give us some points of view how to market and what will we do to make this shop succed?

  7. I have often thought of opening a shop and have seen it done by one of my co workers I became his worker he got the money and I kept working till he became too greedy and then quit 5 years later best wishes for him to lose his shop with the poor busisness skills he has. he would rather pay someone else to do it then himeself .I say he lost pride in his work and acts like a spoiled bi*ch..name is chris look out you might end up working for him if you live in R.I and then get thrown out on the whim of a tempertantrum, that is how it could be and lots of times people say that will never happen to me but it does when you loose yourself in the owner greed. If you love what you do love it always and fix and tune cars till your haerts content otherwise be ready to see the otherside of people that you can never make happy ,that always want it cheaper.
    good luck in your choise

  8. A very important coverage to make sure is included on your Business Owners’ Insurance policy is “Garage Keepers Legal Liability” coverage. Garage Keepers insures your customers cars while left at your in your care. My Insurance Agency specializes in insuring Auto Repair Shops and, honestly, most of the claims calls I receive fall under the Garage Keepers coverage.

    To decide how much coverage you need a good rule of thumb is to figure out the average number of cars left at your shop on an average day. Then figure out what you feel is the average value of the cars and multiply.

    I am happy to answer any insurance related questions for Auto Repair shop owners. My name is Nanci Sparrow and you can call me at (888) 469-3434 or visit my website at http://www.SparrowGeneral.com

  9. Hi, I am in the process of buying an existing auto repair shop. What are all the permits that I need to have in order to continue running the shop?

  10. see thats my plan for my future is to start my own garage. so at this moment i’m starting to go to MTTI for auto…and gain some experience after i graduate from it. will it be a problem if i got 4 felonies on me???

    • Major tools needed to start a mechanic bussiness, Air compressor , youwill want to use air tools over elect.. , Air impacts 1/2, 3/8 should be good enought by having a set of adapters from 3/8 to 1/2 to 1/4 and so on, also a good set of extensions, 1/2,3/8, and 1/4 set of gooood ratchets you will need them alot, and a set of whrenches start with regular once money its on the way up try to upgrade to ratchets/wrenches it a combination of both together believe if you want suceed in the bussiness time repairing counts too.short and long sockets prefered from 7mm to 33 and standars, pliers and cutters, manny ziptights, electrical wires cutters and clampers along with fire tape, a press bolted to ground for stability, jacks and stands prefered 3 tons capacity to start. A/C hoses and recovery machine that will make prety good profit and easy as long as there is very hot or very cold weather on your area.

  11. You just need some required equipments that are essential for car repair. If you want to start your own business, then you will need to pick out a proper location. Your location will play a large role in whether your business succeeds or fails. And knowledge of car repairing is also essential

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