When preparing to open your auto repair shop, one thing to keep in mind is that this is a profitable business as the demand for auto-care keeps on growing. The number of cars registered in the United States is approximately 276 million with approximately 11 million light trucks being sold on a yearly basis. This makes the auto-care business one of the most profitable and considered an American dream as it helps one in developing their own personal wealth. If you are a mechanic or intend to be one, realizing the dream might be simplified by just thinking of opening your own auto repair shop. This might begin with initiating the idea and coming up with an auto body repair shop business plan.
This is the time that you need to look at areas to specialize in that will be included in the auto body repair shop business plan. When it comes to owning an auto repair shop, the only limit to advancing in profit-making is the capacity of your auto repair shop or garage.
Here are some of the tips for preparing to open your auto repair shop.
Get Certified and Licensed
While considering coming up with your auto body repair shop business plan, the first thing that should come to mind is the necessary certifications and legal documentation that are needed for opening up such a business.
It is therefore imperative to, first of all, seek the ASE certification that relates to working on cars. Sometimes it might be expensive or difficult to get liability insurance, in which case you need to engage an expert to help you in doing that.
The ASE certification communicates to potential clients that you have the requisite skills and knowledge that relate to auto repair. This helps in promoting the confidence of customers by engaging you as an expert in auto repair.
However, before obtaining this certificate, a test is conducted along with proof of 2 years minimum working experience as well as supporting educational achievements related to the job.
After obtaining the certification, you can therefore go ahead with developing a financing plan that is integrated with your auto body repair shop business plan.
Your financing plan should incorporate the equipment that you intend to purchase, finances that may go to a commercial electrical contractor, and a commercial glass store front dealer should you need to subcontract them in the course of your business.
Knowing Your Startup Costs
If you have been working in a garage, then you’ll be in a position to know what you need to start your repair shop. However, if you do not have the experience, it is always recommended to seek advice from an experienced mechanic or an auto care shop expert that can help you establish the projected cost of starting up and running your shop.
You have to set everything up beforehand and get the customers, as customers are more convinced of your experience and expertise if you have the relevant equipment and tools for your work.
While it might be difficult to project the cost per head of time-based on a number of factors including location and marketing approach, estimates for starting up or running such a shop inclusive of rent, insurance, and equipment are approximately $47,000.
Should you consider buying a property, the estimated cost might be a little higher who are you starting up.
One recommendation for lowering the start-up cost could be buying an existing auto shop and modifying it to suit your aspirations.
Deciding Whether to Specialize or Not
It is possible to specialize in one of 16 different technician specialists with the ASE certificate, or you can choose to specialize in none. Automobiles, truck equipment, transit buses, school buses, medium to heavy trucks, and collision repair are just a few of the specialized areas available to you.
When you obtain your ASE certification, you can choose to specialize in one or more of these areas, or you can choose to be a general auto repair technician.
However, there is an advantage to specializing as much as possible, as well as the benefit of your reputation in specific target markets. On the downside, you may miss out on opportunities with other businesses.
It is, therefore, necessary to understand the scope of services required in a particular target market before making a decision on whether or not to specialize. Because of this, it is critical to conduct thorough market research in order to identify the type of demand-driven service that you can provide to potential customers.
List the Services You Intend to Offer
In your auto body repair shop business plan, you need to outline the services that your car repair garage intends to offer. Some of these services may include
Purchasing Equipment and Furniture
This is another budget line that you need to incorporate into your auto body repair shop business plan. Your shop needs furniture. In that case, you need to search for online for cabinets for sale that may be well suited to your business venture. Once you have identified the shop, you also need to engage a mold removal company and I found that it can help you clean up your shop.
Marketing Your Auto Repair Shop
While you have incorporated the marketing plan into your out of business repair shop business plan, you need to actualize it by ensuring that you get the word out that you are opening your auto repair shop.
Ensure to advertise some special discounts for their initial stages so as to welcome customers to test your level of service.
At this stage, you need to have an estimate of revenue potential, as well as the Shoprite and the pricing of the standard services you intend to offer.
To develop a good marketing plan, you need to enroll or have one of your employees take a role in sales training.
It is also important to come up with business signage that can offer directions to potential customers should you need to get to your shop.
Detailing the Auto Body Repair Shop Business Plan
In terms of marketing, your auto body repair shop business plan should include a description of your intended target customer base.
What is important to remember is that every customer of an auto repair shop is different, but they all have one thing in common: they have a car that is either in need of repair or is broken.
The best types of customers are those who require vehicle servicing and, as a result, develop a service contract with the company. A service contract is extremely beneficial because it helps to alleviate cash flow issues and ensures a consistent stream of revenue into your business.
You must, however, keep an eye out for the other type of customer who is only interested in taking advantage of your special discount and will not be returning to your establishment. These types of customers are referred to as price choppers, and they are considered liabilities to a business.
The business plan for an auto body repair shop must also include a description of how you intend to make money.
One of the most successful business models is to charge hourly rates for services provided in addition to a flat fee. Another option is to establish a routine maintenance fee that is charged on specific maintenance tasks such as oil for changes.
You can also use a fee-based model, in which you charge a fee based on the number of parts you purchase and the cost of labor.
Also, included in the auto body repair shop business plan should be a projection of the amount of profit that your auto body repair shop expects to make.
According to a rough estimate, mechanics in the United States earn between $30,000 and $50,000 per year. You can state at the outset that you are aiming for a rough estimate of $30,000 as your budget.
Financing Your Start-Up
The most complicated part is financed in your start-up. This is the part that the out of body shop repair business plan is important since with the plan you can approach various financing companies and potential investors to provide equity needed to purchase relevant tools, rent or purchase a shop facility, or pay your employees before the business starts making a profit.
Your financial plan should therefore be comprehensive in every aspect of your business, including profit and loss. Additionally, it is important to outline your business model so as to showcase the potential revenue generation within a certain period of time.
Another important facet of your auto body repair shop business plan is the SWOT analysis, which establishes strengths, weaknesses, opportunities, and threats that your company possesses or may be forced to navigate when starting a business.
Setting Up Business Accounting
In any business, it is a legal and professional requirement to set up a business accounting system that shows the sources of income and expenses. By understanding the financial performance of a business, we can better manage our resources.
Your business accounting should also include information on how to file your annual tax return in accordance with the law.
Once your company has been registered, you will also need to open a bank business account for it. Having a business account is very important because it demonstrates to the bank and other financial institutions your worth and ability to generate revenue, both of which can be used as credentials when applying for a business loan to fund the expansion of your company.
The majority of people are unable to distinguish between a person and a business bank account, which is particularly important when it comes to business operations and credit acquisition. Banks are interested in business accounts because they can use them to determine whether or not you have a low income and how much money to lend you for your business based on your specific requirements.
The government can also provide assistance to businesses, and in that case, establishing a business account with a bank or other financial institution may be necessary to establish credibility.
Setting Up Your Business Communication System
Any business must have a business phone system so that customers can reach you when they need to visit your establishment. It is critical to distinguish between your personal and professional lives, and as a result, they must develop a separate phone system.
When it comes to the website and other automated systems that can be accessed by customers, nothing that you might think of comes to mind at this time. A business website lends credibility to your company, which in turn can attract more customers to your company.
When preparing to open your auto repair shop, it is important to develop an auto body repair shop business plan. The auto body repair shop business plan should incorporate your business idea, areas of specialization, your financing model, your business profit-making, the essential purchases when starting up the business, the employee and management structure, the marketing plan, the sales training plan, and the level of service you intend to offer.
You also need to conduct thorough market research to establish the types of services that are needed by different customers.
Additionally, you need to obtain the relevant certifications and business licenses and show a high level of compliance with the authorities on matters of taxation and insurance. Some of these activities, however, are done and require professional support from a legal practitioner that may offer to help obtain the relevant business license and other legal-related documentation. Retaining such a legal practitioner is also important in the event that your business faces some legal hurdles that require a lawyer.