Statistics have it that roughly more than 90 percent of American households own at least one car. This alone is enough to tell you that a car repair and maintenance garage can be a lucrative business. However, it also doesn’t come without a significant amount of competition, which makes it important to get certain things right from the very beginning.
So, are you looking to start an auto-repair business? If so, here are X things you should do before opening your own car maintenance and repair garage.
1. Determine the Type of Services You Will Provide
One of the first and most important things to do is figure out the kind of services you wish to provide for your auto-garage. Will you specialize in certain types of vehicle maintenance, diagnostics, and repair services, or will you offer a variety of services? Make sure to conduct research and determine the types of services offered by other auto-repair shops around the area you intend to set up shop.
If most of your competition provides general service maintenance and repairs, go ahead and add specialized services that might not be available at competitor shops. For instance, you could offer repainting or maintenance for hybrids and electric vehicles.
The types of services provided will also help you estimate the costs of starting your car maintenance and repair business and create a business plan.
2. Choose a Business Structure and Obtain the Necessary Permits/Licenses
Next on, you will want to check with your state, city, or local government to ensure that you comply with all applicable laws and regulations. This means getting the necessary licenses and applicable permits you need to legally do business. In most cases, you will need an auto-repair shop license alongside documents like:
- Smog station license
- Seller permit number
- Lamp/brake station license
- Hazardous waste ID number
On the same note, you will want to decide on a structure under which you will operate the business. Although you can choose a legal entity such as a partnership, an S-Corp, or C-Corp, operating as an LLC can be more advantageous when it comes to legal protection and tax advantages.
3. Figure out How You’ll Fund Your Business, e.g. Through a Personal Loan
Just like with any other business, funding is an imperative consideration when starting a vehicle repair garage. Of course, you will need money to purchase equipment, gather supplies, buy parts, and set up your garage, among other things.
Once you have an estimate of the startup costs in mind, you will want to weigh your options between dipping into your savings, getting an SBA loan, or securing a personal loan.
It is crucial to have a financial plan in mind before you get started, as your business will also need a backup solution to keep it afloat from time to time. And if you opt to borrow, experts would recommend choosing a lender with low, favorable rates, flexible terms, and no hidden fees. The likes of personal loans by SoFi even offer same-day funding for loan applications from $5k to $100k.
4. Secure a Decent Location for Your Business
The last mistake you want to do is start a car repair and maintenance garage in the middle of nowhere. Unless the location is forecasted to grow alarmingly in the months to come, this can badly hurt your finances. Also, you’ll want to consider factors like accessibility, availability of parking, and local zoning laws when choosing a location for your auto repair shop.
5. Purchase Equipment and Hire Qualified Mechanics
Also, consider consulting with suppliers or experienced mechanics for recommendations on the best types of mechanic tools and equipment you need for your auto-repair business. You’ll also need a few extra hands to deliver great services, so make sure to look for highly qualified mechanics with a track record of success in the industry.
6. Get Insurance Coverage
If your car repair and maintenance business is to start delivering a steady revenue stream, you will need to set aside some funds for insurance. With proper business insurance in place, your business will be protected from various unexpected costs of liability, from property damage to bodily injury.
7. Determine your Marketing and Advertising Strategy
Although your business will likely start out small, do not sit back and leave advertising to chance. You’ll want to put in place a proper marketing and advertising strategy to enhance your visibility. From hiring an experienced advertising agency to visiting trade shows in your area, here are a few marketing tips you could use in your marketing strategy.
- Develop a Website and Social Media Presence: Having a strong online presence is key to reaching potential customers. Make sure your website is professional and informative, with information about your services and contact information. Create accounts on social media platforms such as Twitter, Facebook, and Instagram to reach potential customers.
- Invest in Local Advertising: Consider investing in local radio and television ads or newspaper ads. Local advertising can be an effective way to reach potential customers in your area.
- Participate in Local Events: Participating in local events such as car shows, community fairs, or other local events can be a great way to meet potential customers and get your name out there.
- Utilize Direct Mail: Send out postcards, flyers, or other direct mail pieces to potential customers in your area. You can also include coupons or discounts to encourage people to use your services.
- Establish a Referral Program: Word of mouth is the best form of advertising. You could consider offering incentives to your first customers to encourage then to refer new customers to your auto repair business.
- Leverage Online Reviews: Encourage your customers to leave positive reviews on websites such as Yelp, Google, and Facebook. Online reviews can be a great way to reach potential customers.
- Build a Network: Networking with other auto repair businesses or local businesses can help you reach a larger potential customer base. Consider joining local business associations or chambers of commerce.
8. Expect the Unexpected
After you have gathered all the right tools and financing, setting up your garage should be pretty straightforward. However, it never hurts to prepare for any potential setbacks that may arise, whether they are unavoidable or not.
Some common issues that may arise include labor shortages, equipment breakdowns, and sudden weather changes. Importantly, knowing the people to approach for help whenever the need arises can go a long way in helping to avoid financial failures.
Starting a new business is never an easy feat, and an auto repair shop is no exception. With proper planning and preparation, however, it’s easy to maximize your chances of success. Thankfully, the above few points highlight some of the most important things to do and think about before starting a car repair business.
Once you have all these in place, don’t forget to set competitive prices for your services. Research the market to determine what other businesses in your area are charging so you can have a competitive edge.