The automobile industry in the United States is one of the largest in the world. It’s worth over a hundred billion dollars, with millions of cars sold yearly. However, the backbone of the industry relies mainly on small businesses willing to keep these vehicles on the road.
It’s estimated that about 69 million cars break down annually in the country. Without auto-repair shops, these cars would either be abandoned or have to be towed at a significant cost. This won’t look good for the industry and buyers everywhere.
So if you’re thinking of joining this lucrative market, here are five essential things you need before opening an auto repair shop:
Starting an auto repair shop isn’t expensive, but it still requires a decent amount of capital. You should prepare at least $10,000 to get the business going. This will cover the cost of renting a space, buying equipment, and acquiring the necessary licenses and permits.
However, having around $20,000 would be ideal. This additional amount can be used to cover unexpected expenses or to hire the first batch of employees. Of course, you can go for the bare minimum if you’re planning to run the shop yourself, but remember, this might lead to lower revenues.
Moreover, you should have an emergency fund ready. The fund should cover at least six months of operating expenses if the business hits a snag.
Invest in Equipment
Your repair shop won’t succeed if you don’t have the right tools and equipment. Fortunately, the cost of these has gone down in recent years. So you can now get a decent set of equipment for around $5,000.
Of course, the cost will still depend on the size and scope of your shop. If you’re planning to provide more services, you’ll need to invest in more equipment. Specialized tools and machines can also be quite expensive.
The good news is that you can always lease or rent equipment if you don’t have the budget. Ensure you only get what you need, so you don’t waste money. Here is a list of equipment you’ll need:
- Diagnostic tools
- Air compressors
- Brake lathes
- Tire changers
- Wheel balancers
Lastly, if you’re planning to restore vehicles, you will need to do some metalwork. You should invest in a good welding machine to do this. Furthermore, you might want to buy weld cleaning solutions to clean your welds. This will lead to better and cleaner-looking welds. It’ll also be more resilient to damage.
Choose the Right Location
The location of your auto repair shop is just as important as the quality of your equipment. After all, you can’t expect customers to come to you if they can’t even find your shop.
Ideally, you should look for a space that’s easily accessible and has a good amount of foot traffic. This will give you more visibility and making it easier for potential customers to drop by.
Another thing to consider is the competition. If there are already a lot of auto repair shops in the area, you might have a hard time attracting customers. In this case, you should look for a niche market you can target. For example, you can focus on repairing European cars.
Of course, the rental cost is also an essential factor. You don’t want to spend all your capital on rent, so be sure to look for a space within your budget.
Assemble a Team of Skilled Professionals
You won’t be able to do everything by yourself, especially if your repair shop starts to get busy. This is why it’s essential to have a team of skilled professionals to help you out.
These people should know the different aspects of running an auto repair shop. They should also know how to use the various tools and equipment
Some of the positions you need to fill are:
- Auto mechanic
- Assistant Manager
- Tire changer
- Wheel balancer
These are just some of the important positions you need to fill. Of course, you can always add more employees as your business grows. Just be sure to carefully screen each applicant so you can find the best people for the job.
Get the Necessary Permits and Licenses
Lastly, you’ll need the necessary permits and licenses before you can start operating your auto repair shop. The requirements vary depending on location, so check with your local government. The essential permit you’ll need is a business permit, so don’t forget about that. It costs around $50, and you can usually get it from your local Chamber of Commerce.
These are the essential things you need before opening an auto repair shop. By following these tips, you can increase your chances of success. Moreover, you can make your repair shop competitive when you open it.