Starting an Auto Repair Shop: 4 Things to Know

Posted in May 14th, 2020
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Starting an auto repair shop is a logical move for someone who’s had a life-long love of cars and enjoys working on them too. If you’re that type of person and have experience working in an auto shop as a mechanic, a respraying pro, or another role, then you may be ideally placed to jump into starting an auto repair business.

Here are 4 things you should know to prepare yourself.

Be Prepared for the Responsibility

If you’ve previously worked inside the workshop fixing vehicles, then you may not have experience as the workshop manager or the people who manage the bills. While hands-on repair experience gives you a better appreciation of the nuts and bolts side of things, it leaves you in a bad position on the management side.

To address this possible deficiency, taking a training course in running an auto repair shop is not a bad idea as long as it addresses the back-office aspects (not just the actual repair work). Alternatively, look to take a position in the back office of a small to a mid-sized auto repair shop to learn the ropes for a few months before leaving and going out on your own.

Ensure Sufficient Funding to Succeed

Many businesses fail because the founders go into it with insufficient capital to get up and running. Beyond just starting, you shouldn’t expect a steady flow of repair work from the outset. Unless you have excellent connections in the neighborhood, getting the word out will take time.

The cost of getting started includes the facility, the necessary equipment, materials, training for personnel, recruitment costs, and more. Figure out what these are likely to cost and add a buffer for miscalculation or things you’ve forgotten to include (there will be a few).

Now, look at what money you have saved and whether you’ll have enough capital. If not, then you might wish to consider looking into business loans to see if it will cover the shortfall.

Knowing the Marketing That Will Get Customers Through the Door

Most auto shops have regular customers which keep a certain minimum amount of revenue coming in. When starting up, you won’t have this advantage.

How will you find your first customers? Will you advertise in the local paper? Could you spend time in Facebook Groups dealing with mechanical issues to provide advice, and recommending your shop? Or, is an ad in Craigslist going to be useful to find people in the city/town that you’re based in? Come up with a workable plan; don’t just expect people to find you.

Figure Out Your Profit and Loss

Break down the cost of running the auto repair shop right down to the labor cost and what parts will be used to fix different types of repairs. You’ll need to order the parts from a dealer and wait to receive them. Being a small auto shop, the lower prices still go to the bulk buyers. Factor in the true costs to see how affordably the business can be operated. Then look at what your peers in the local vicinity charge for their work. Call around posing as a customer to see what they’re quoting for different types of repairs and bodywork. This will give you a clearer sense of what to charge.

Once you get over the initial hurdles, the pride of being a business owner will drive you to succeed. However, prepare early to increase your chances.