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8 Tips for Opening Your Own Auto Repair Shop

14 min read
repair shop

In 2019, there were over 279 million vehicles operating on the roads in the U.S.

With so many cars on the road, opening an auto repair shop is a no-brainer. Perhaps it’s been a life-long dream to capitalize on your passion but you’re not sure how to make it a reality.

Sound familiar? If so, check out our eight tips on how to open an auto repair shop.

1. Decide Whether It’s Right For You

Before opening an auto repair shop, figure out whether it’s the right career option for you.

You must be mechanically-inclined and know about different service protocols. Further, you’ll work long hours especially when you just open, including weekends.

In car repair shops, owners must check maintenance logs, upcoming appointments, and contact stores about supply needs.

Mechanics also need special training including an Automotive Service Excellence (ASE) certification.

2. Create a Business Plan

To run a successful auto body repair shop, you must have an iron-clad business plan. This will map out the specifics of your business so you know startup costs, how much you can charge customers, and the name of your shop.

You must also know your target market. In the auto repair business, the best customers have a service contract as it gives the shop a steady income on a long-term basis. One-time clients are problematic as they take advantage of promotions and may cost the shop money.

Because of this, decide if you want to specialize in repairs for a specific vehicle manufacturer or type of repair like brakes. If you do specialize, conduct in-depth market research to ensure there’s enough demand for your service.

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3. Find the Best Location

It’s important to find the perfect location for your auto repair shop. Make sure you’re not too far from your customers’ homes so set up close to a town or city.

Lease or buy a facility that’s larger than you expect so you have room to scale. And a pro tip: stay close to your town’s or city’s main roads so clients can easily find you.

4. Open a Business Bank Account

You must open a business bank account because it protects your personal assets. So if a client sues you then your home or car isn’t at risk of being taken away.

Another bonus of opening a business bank account is that you can build credit so you can get financing later on like a loan. During this stage, you must also register for state and federal taxes otherwise you’ll run into legal trouble.

To do this, apply for an Employer Identification Number (EIN) and begin the process.

5. Get Licences and Permits

Before open day, apply for the necessary permits and licenses so you can legally work as a mechanic. Plus, auto car repair shops must comply with federal and state environmental regulations so check which ones you need.

For instance, your state may require you to get a DBA so contact your local Small Business Administration office to see if it’s necessary.

6. Don’t Forget Business Insurance

Alongside licenses and permits, you must get business insurance so your auto repair shop operates safely. Start with general liability insurance as it’s the most common coverage that small businesses need.

You must also get garage keepers insurance and worker’s compensation insurance to protect your employees.

7. Set Up Interviews

If you have a small auto repair shop, it’s possible to carry the workload alone although hiring an employee to handle customer service is wise.

But if you have a large facility with multiple lifts, consider hiring mechanics to help service vehicles. Begin the recruitment process a month before grand opening so you have time to interview, check references, and agree on compensation packages.

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8. Market Your Business

Regardless of your industry, marketing your business is crucial. Start by defining your brand which is what your business stands for and how it’s perceived by customers.

Also, consider collaborating with local businesses that may need your services. For instance, you could partner with a taxi service and offer regular repairs and maintenance.

You must also highlight your unique selling point (USP) so customers know why you’re better than competitors. Perhaps it’s because you specialize in custom stereo installations or you sell high-quality tires.

Then, post marketing flyers over your city and offer great deals on common repairs on your first week open for business. You must also create a website and a social media profile to promote your auto repair shop as it’s the most effective way to reach customers.

After each sale, ask clients to leave positive reviews as it’ll encourage prospects to use your service.

Further, create a loyalty program whether it’s rewarding clients for referring your business to having a free oil change, it’s a fantastic way to strengthen your customer base.

Those Are Our Tips for Opening an Auto Repair Shop

Now you know eight essential tips on opening your auto repair shop.

Once you’re certain this is the right career path, decide whether you want to specialize, who your target market is, and where you want to lease.

You must apply for the necessary licenses, permits, and insurance so your auto repair shop is legal. Then find unique ways to market your auto repair shop and engage with customers, existing and new. Good luck!

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