Being your own boss is the American Dream that many people work towards their whole lives. If you recently decided to open your own automotive repair business, you may be feeling a bit overwhelmed. Even though you have been a technician or a service writer for years and you’re excited about starting your own business, you may not know exactly where to begin.
Wanting the American Dream and knowing how to get there are two very different things. Before jumping into starting your own automotive repair business you need to plan. When people say that you need a business plan they make it sound simple.
There are several areas you need to research so you know what you are getting into. Good research will help you be as prepared as possible, so here are a few tips…
Automotive Repair Shop Startup Costs
The last issue you want to deal with is starting your automotive repair business, and run out of money too soon. By understanding what the startup costs will be, you are more able to prepare and set yourself up for success.
When starting an automotive repair business, expect startup costs. You will need money for things like rent, insurance, legal, accounting, marketing, and equipment. Here’s an example. If you buy or rent a building and need to change the use of the property to an auto repair shop, you may well need planning permission, which means you need to speak to an architect or an engineer to see if the building is safe to change. These costs can mount up and are not insubstantial amounts.
Get a Lawyer, A Bank and an Accountant
Do you have extensive knowledge in tax law, liability insurance laws, accounting, business licensing, and business structures? If the answer is no, you will need an attorney and Certified Public Accountant (CPA) to help you. You want to ensure that your auto repair business is set up properly, and do everything you can to limit your personal and financial liability.
Trying to decide if your auto shop business should be a sole-proprietorship, partnership, or incorporate? A good CPA can help you find a business structure for the best profit-centered, tax-reduced, asset protection possible. Structuring your business correctly can offer great advantages. This means dollars in your pocket from corporate tax savings, and allows you to protect your assets during your lifetime and for generations to come.
Having an already existing relationship with a bank will help you when it comes time to start your business. Build a relationship with a business banker who will know you and your business, when you are ready to start or expand he will know your financial status and your plans. Don’t ever discount the value of having a banker emotionally invested in your success.
No one likes dealing with attorneys, usually because we are on the receiving end of bad news when we do. When you are starting a business having your own lawyer is vital. One paragraph in a document you sign happily today could come back and bite you in years to come. It may seem like just another expense, but paying an attorney to look through things before you sign could well be the best money your business ever spends.
Though having a lawyer on retention is not usually necessary, it is a good idea to have one who knows your business and whom you trust.
ASE Certification for Technicians
No one is saying that a person who is not ASE certified isn’t capable of fixing an automobile. Yet, people are more trusting of automotive repair shops when their technician is ASE certified. So, if you are not ASE certified, you need to either get yourself certified or hire technicians who are.
Be aware that ASE certification requires a person to take and pass the certification exam. Before a person can take the exam the person needs at least two years of educational or work experience. At least one of those years must be on the job.
If you are opening a transmission shop then consider joining ATRA , membership of an accredited trade association will always gain trust and respect from your clientele.
Hire Auto Shop Employees
This is not an area you want to rush. “Mishires” (or hiring the wrong people) are one of the biggest expenses for small and medium-sized businesses. Be sure to set the interviews or get the word out that you are looking to hire well before your opening date. You will need time to conduct the interviews, find the best candidates, do background checks, and negotiate the hiring agreement.
Even if you are starting out small you need to have at least one employee to help you. If you are the service writer then you need to find a solid technician who has wide experience and a good work ethic. Someone who wants to help you build a business.
If you are the auto shop technician then you need someone to answer the phones and work with the customers. When hiring forward facing staff the best comment we have ever heard is “You CANNOT train Attitude”. You can train them to use a computer program but you cannot train them to smile and be friendly.
Always look for staff who will fit in with your clients, and make sure they understand the behavior that is expected of them before they ever start. Or if you will be the person handling customers directly, you will need an auto shop technician.
Whomever you hire has to sign a contract of employment (speak to your lawyer about this) and should be supplied with a handbook of behavior that is expected. The handbook may seem like overkill if you are only employing one member of staff, but you are better off doing it early rather than wishing you had when it is time to reprimand or fire someone.
Marketing for Auto Repair Shops
Marketing is another big component that must be handled before your Grand Opening. Advertising your Grand Opening with promotions and special pricing is a great way to bring in business to your new shop.
Getting your name out there in many different ways is imperative. New shops are often successful with promotional give-away items for customers who come in the first week or month. Establishing customer appreciation early is key to customer loyalty.
A solid marketing plan is invaluable to keep within budget as you choose appropriate marketing tools. Other marketing tools for your new automotive repair shop could include: flyers, radio announcements, and social media. Plan your marketing steps and budget in advance, but prepare to be agile so you can adjust on the fly is one method is more or less successful than the other.
Be the Boss
Owning your own auto repair shop allows you to be the boss. You have control over your future, set your own hours, and make all the decisions. You get to create the workplace environment of your choosing, and build something great for yourself, your family, and your employees.
Going after your dream to open an automotive repair shop will be no small feat. If you’re willing to put in the time and the work necessary, you will see great rewards. By planning and preparing for potential pitfalls, you will give yourself an edge over the competition.