How to Start a Car Repair Business - 56juqingba: How-to instructions you can trust

Spread the love

Download Article
Explore this Article parts
1 Opening Your Store
2 Designing a Business Plan
3 Expanding Your Business Other Sections
Expert Q&A
Video
Related Articles
References
Article Summary
Co-authored by Jason Shackelford

Last Updated: July 29, 2024 Approved

Download Article X

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. He has over 24 years of experience in auto repair and services, and every single technician on Jason’s team has more than 10 years of experience.

There are 12 references cited in this article, which can be found at the bottom of the page.

wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 19 testimonials and 92% of readers who voted found it helpful, earning it our reader-approved status.

This article has been viewed 467,512 times.

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.^{[1] X Research source} 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.

Table of Contents

Steps

Part
1 Part 1 of 3:

Opening Your Store

Download Article

1 Obtain a license to operate your business. States have different licensing requirements for auto repair business. 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.
- Meet eligibility requirements. In most states, you will need to meet certain eligibility requirements to be allowed to apply. These requirements may include things like your age, credit, and criminal record.
- Provide required documents and information. You may need to include some other documents and information such as proof that the building you plan to use has been zoned for your business, your tax ID number, and color photographs of your facility.
- Pay any fees required to process the application. The application fee may be as low as $20, but if approved, you may need to pay $300 or more to obtain the license.^{[2] X Research source}^{[3] X Research source}
2 Purchase insurance for your business. Before approving your application, most states require you to have a minimum amount of insurance for liability purposes. This amount may be as low as $50,000 or as high as $300,000. ^{[4] X Research source} ^{[5] X Research source}
- Check with your state’s motor vehicle department to determine how much insurance you will need to obtain for your business.
Advertisement
3 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] X Research source}
- Consider hiring an accountant or a financial advisor to help you establish a budget for your expenses as a new business. An accountant can help you manage your taxes, your payroll system, and advise you on the best bookkeeping system to use in your business.
- You should also consider retaining a lawyer in case you face any suits or claims from your clients. Ask other mechanics in your area which lawyers they use and like.
4 Implement a marketing strategy. Your success as a business will depend on how you relate to your customers and potential customers
- Define your core values as a brand. What are three words your customers should think of when they think of your business? You might think of words like “honest,””loyal,” and “dependable.”^{[7] X Research source}
- Print eye-catching flyers. You can place them in places where lots of customers might congregate, such as gyms, civic centers, office parks, and the parking lots at universities and college campuses.
- Establish a loyalty program. You might offer your customers a free oil change after they come to see you for another service (like an engine repair or heating/air conditioning repair). You can also send coupons in the mail to your neighbors or consider offering a digital discount through a service like Groupon.^{[8] X Research source}
- 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.
5 Make alliances with car dealerships. 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.

Part
2 Part 2 of 3:

Designing a Business Plan

Download Article

1 Define the scope of your business. Opening your business plan with its scope provides a general idea of how many customers you will serve and on what scale you will serve them. How many cars do you plan to service in a day and how many staff members will you take on?
- Will you only offer a specialized service, such as oil changes and tire repairs, or will you offer a more comprehensive range of repairs?
- Will you buy a currently operating car repair shop or start a brand new one from scratch? What are the costs and benefits of each of these options?
- 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.
2 Describe potential locations. Your business plan will be shaped by the potential locations for your car repair shop. Leasing a current repair shop might be cheaper than buying one or building one from the ground up. ^{[9] X Research source}
- Look for locations that are convenient to either highway or main road access. 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.
3 Determine your equipment needs. The price of equipment will most likely be your largest cost after the cost of the location. Will you rent your equipment or will you buy it outright? You will most likely need a specialized set of mechanic’s tools ($15,000), at least one diagnostics machine ($5,000), and a lift with an installation ($3,700).
4 Detail your sources of funding. With the cost of equipment, insurance, rent , and payment for your staff, you will probably need somewhere between $50,000-$100,000 to open your business, depending on your location.
- You should clearly detail any loans your plan to apply for in order to fund your business? Will you apply for a business loan from your bank, from the Small Business Administration, or from another source? To get approved, you must have a healthy financial history (with good credit, no history of bankruptcy) and be able to demonstrate that you have roughly 70% of the funding already raised.^{[10] X Research source}
- If you are denied a loan from the Small Business Administration or your local bank, then you could consider other lenders like OnDeck and Kabbage if you need cash quickly. These lenders are meant for short-term loans because their interest rates are very high.^{[11] X Research source}
- If you choose to take a loan from friends or family members, still put the repayment terms of this loan in writing. You do not want to risk losing relationships in the event that you cannot repay the loan in a timely manner.
5 Define your Unique Selling Point. Most importantly, you should clearly state in your business plan what your shop will provide that no other shop in your area does. Will you provide the lowest prices, the fastest turnaround, or the best customer service? Why should a customer pick your business over your competitors?
- You can also consider if you will specialize in a niche field, like restoring old cars, or providing environmentally friendly or “green” services to your customers.^{[12] X Research source}
- Defining your USP will help lay the foundation for your broader marketing plan once you open your store.

Part
3 Part 3 of 3:

Expanding Your Business

Download Article

1 Consider going mobile. For minor repairs — like tire changes — you might consider offering roadside assistance or going to customers’ homes to help them. This will help your customers associate you with loyalty and convenience. ^{[13] X Research source}
2 Encourage your employees to get certified. Your business can only grow in prestige if your technicians gain certification. Most automotive technicians gain certification from the National Institute for Automotive Service Excellence.
- Technicians must have a two-year degree and a year of formal experience working as an automotive technician (or mechanic).
- You can become certified in a number of specializations, ranging from school bus repair, collision repair, trucking equipment, and more.
- Gaining certification can help your business gain more credibility in the eyes of your customers.^{[14] X Expert Source Jason Shackelford
  Auto Technician Expert Interview. 11 June 2019.}
3 Open additional branches of your business. If your shop becomes profitable, and you have a surplus of customers, consider opening an additional location in an area that you would be more convenient to other customers. ^{[15] X Research source}
- You should only do this if you get to the point where your first branch runs smoothly on a daily basis. Make sure you have reliable and capable managers to help you. If you still have to run daily demands by yourself, then it might not be the best time to expand.

Expert Q&A

Search
Add New Question

Question Do I need to get ASE certified? Jason Shackelford
Auto Technician Jason Shackelford is the Owner of Stingray Auto Repair, a family owned and operated auto repair shop with locations in Seattle and Redmond, Washington. He has over 24 years of experience in auto repair and services, and every single technician on Jason’s team has more than 10 years of experience. Jason Shackelford Auto Technician Expert Answer If you’re interested in becoming an automotive technician, an ASE certification always helps. Taking the initiative to earn your ASE shows potential employers you’re serious about an automotive career, and continuing education is always needed in this field. Thanks! We’re glad this was helpful.
Thank you for your feedback.
If wikiHow has helped you, please consider a small contribution to support us in helping more readers like you. We’re committed to providing the world with free how-to resources, and even $1 helps us in our mission. Support wikiHow Yes No Not Helpful 4 Helpful 1

Ask a Question 200 characters left Include your email address to get a message when this question is answered.
Submit

Video

Tips

Submit a Tip All tip submissions are carefully reviewed before being published Name Please provide your name and last initial
Submit Thanks for submitting a tip for review!

How to Buy a Car Under a Business Name
How to Write a Business Plan for a Startup
How to Open a Car Wash Business
How to Open a Car Dealership
How to Buy and Sell Cars for Profit
How to Start a Used Auto Parts Business
How to Start a Taxi Company
How to Get a Car Dealer License to Sell Cars
How to Start a Car Insurance Company
How to Open an Auto Body Shop
How to Open a Gas Station
How to Become a Car Dealer in California
How to Become an Auto Dealer
How to Become a Wholesale Car Dealer in California Advertisement