Starting a business is never an endeavour one should embark on lightly. Making a business successful and keeping it running takes a lot of hard work, dedication, and strategizing.
However, if you’re tired of working for other people and want to expand your potential, working for yourself is the best way to go. For example, if you’re willing to put in the work and have a knack for car repairs, starting an auto shop could be a lucrative career move.
If this sounds good to you, you’re probably wondering how to get started. That’s exactly what we’re here to talk about. Keep reading for a quick guide on how to start an auto repair shop.
Master Guide to Opening Your Own Auto Shop
Research and Analyze the Local Auto Industry
First, you need to learn as much as you can about the local auto repair industry. The more you know about the demand for auto repair services and your competition, the better prepared you’ll be to succeed. Ask yourself the following questions:
- Who are my biggest competitors?
- What are they doing well?
- In what areas could I do better?
- Is there any gap in the community for specific types of services that I could fill?
- What are the average price points for the types of services I will be offering?
- What are the average operational costs of auto shops?
- How much money will I need to get started?
- What is the demand for the services I will be offering in the community?
- What are the most effective types of marketing strategies for auto shops?
Knowledge is power, especially in business. There’s a reason 50% of small businesses fail in the first five years, and it usually comes down to a lack of knowledge. This could be in marketing, sales, or management.
Identify Your Specialty
Now that you know more about the industry, figure out what you can bring to the table that’s different or better than other local auto shops. Auto repair shops are common in most towns, which means you’ll need to find a way to set yourself apart from your competition. In most cases, this means establishing a niche within the industry.
Determine your specialty and rely on your strengths. However, even if you open a generic auto shop, the right marketing strategy can ensure you have a heavy flow of traffic.
Write a Professional Business Plan
Now it’s time to write your business plan. This is one of the most important steps in starting an auto shop business. The business plan you create should serve as a road map to your success. It should simultaneously provide an in-depth description of your business and how it will operate, and outline a path for growth and success.
Just as importantly, your business plan will be the document banks and investors use to determine the validity and credibility of your business. If it is found wanting, they will be less inclined to provide you with the funds you need to get started.
Apply for Startup Financing
Once you’re confident that your business plan is both professional and compelling, you can approach different lenders. You can attempt to get an SBA loan, which is probably your best option. SBA loans typically provide more money and lower interest rates.
However, SBA loans can be more difficult to obtain, as they require relatively high credit scores. It also depends on how much money you’re asking for.
If you can’t get approved for the SBA loan you want, you can also pursue funding through investors. You have a wide variety of options here, such as private investors, crowdfunding agencies, angel investors, and more.
You can also look to family, friends, and coworkers as personal investors. Alternatively, consider taking on a business partner. They can help you apply for an SBA loan or provide your own private funding.
Find a Garage and Outfit Your Shop
Now that you have funding, you need to find a place to start your auto shop. We always recommend starting small and working your way up. Many new business owners make the mistake of starting with too much overhead, which can make it difficult to get by financially.
Find a garage in the right location, but remember that the “ideal” location may be more expensive to rent or buy commercial real estate.
Additionally, make sure you leave enough room in your budget to rent or buy all the necessary tools and equipment you’ll need for your auto repair shop. If you’re working with a tight budget, you might need to start with the basics and invest in more/better equipment as your business gains traction in the community.
Get Licensed and Insured
To start a legitimate auto shop, you need to ensure your business is licensed through the state. You also need to make sure anyone performing car repairs has the proper auto mechanic certifications.
Furthermore, invest in the various types of insurance you’ll need to protect your company, your assets, your employees, and your personal finances. Common insurance policies typically include:
- Property insurance
- Liability insurance
- Worker’s compensation insurance
- And more
Sometimes, you can find these policies bundled in something called garage insurance. This is a policy created especially for auto shops.
Set Up Operations
Finally, you can start setting up the basic operations of your auto shop. This means hiring employees, marketing your business, and organizing your shop.
If you don’t have the funds to hire employees yet, that’s okay. You can start to bring on more people as your auto shop grows in popularity.
We also recommend finding more info on auto shop management software to help you run your business smoothly. The right software can save you a ton of time while simultaneously streamlining your business.
Lastly, start getting the word out about your business. There are numerous ways you can advertise your business. Some of the most effective methods include:
- Radio ads
- TV commercials
- Website design and development
- PPC advertising
- Content marketing
- Social media marketing
- Affiliate marketing
- And more
If you’re new to business marketing, it’s a good idea to work with an advertising agency to help you establish a presence in the community. The importance of brand visibility cannot be overstated.
Planning On Starting Your Own Auto Shop?
As you can see, there’s a lot that goes into starting an auto shop. However, if you’re willing to put in the work and do your homework, there’s no reason your business can’t be a huge success. Follow our guide to get started.
But if you need more information, you’re in the right place. Browse through the rest of our blog to find more valuable content on business finances, marketing, and more. Our website is here to help entrepreneurs like you.