So you’d like to open your own auto repair shop – that’s great! Owning your own business can be an immensely rewarding experience, with plenty of flexibility and control. It can also be stressful and very difficult – it’s not something to be undertaken lightly. Before you start your new auto repair shop, here are four questions you need to ask yourself.
Who Are My Customers?
This might seem obvious – anyone with a car, right? Not so fast. Do you really want to work on every single make and model out there? The answer may be yes – and that’s OK. Just understand that you will need to hire technicians who are skilled at servicing all types of cars and light trucks. You will also need to figure out how to reliably source parts for all of these vehicles. This certainly isn’t impossible, and many shops have indeed done it successfully, but stop to think if that’s really want you want to do. You may instead want to specialize in a certain make or type of vehicle – only BMWs, for instance, or only Japanese makes. This will allow you to become an expert in your chosen niche, but it does shrink your target market. Think about the other auto repair shops that already exist in your area as well. What’s missing in the landscape? How can you provide value?
How Much Will It Cost?
There are two types of costs to think about when opening your own auto repair shop – startup costs and ongoing costs. Startup costs are the expenses you’ll need to pay in order to open your doors on day one – things like a building (rent or a mortgage), tools and equipment (little things like wrenches and big things like lifts), and administrative costs (insurance and licenses). Some of those expenses will need to be paid on a recurring basis as well, like your insurance and rent. Add things like employee salaries and annual certifications into the mix, and you might be looking at a pretty daunting list of expenses. Don’t let this deter you, however. If you run a well-organized shop and do outstanding work, your customers will reward you with plenty of repeat business.
When Will I Start Making a Profit?
If you’re doing the math over and over trying to figure out how your shop will break even, try extending the time horizon a bit more. Most auto repair shops don’t start turning a profit right away, especially if they’re being fair with parts and labor costs. The startup costs for a new auto repair shop can be significant, and it can take a while to pay all of that off. Again, don’t let this scare you. Run the numbers to estimate when your shop will most likely become profitable, and make sure you have enough money saved up to cover that time period. Don’t launch your business until that is the case – being prepared will save you from a whole lot of heartache.
What Should I Call It?
Maybe you’ve had a business name picked out for years, complete with a logo, color scheme, and catchy tagline – or maybe you’ve barely given it any thought. Before you rush out and have a bunch of materials printed and signs made, consider how your name represents your business and how easy it will be to find when people are searching for it. For example, First Class Auto Service sounds great, but it’s not a smart move when there’s a First Class Auto Clinic right across town (you might even run into copyright issues). Pick something unique and memorable that still clearly describes what your shop does and who you serve.
Find Partners You Trust
This might sound like a daunting list, but you don’t have to go through the process of setting up an auto repair shop alone. Surround yourself with partners and vendors who care about your business and want to make it successful. From your shop management software provider to your parts distributor to your credit card processor, make sure everyone you work with has your best interests in mind. For a credit card processor who takes your business seriously and wants the best for you, consider 360 Payments. We know the auto repair industry inside and out and are ready to help you make your mark on it. Give us a call at 1-855-360-0360 or drop us a line on our website to learn more!
PS – Navigating unexpected business situations can be tough. Check out our guide.
PPS – Consider setting up remote payments right away. Here’s why.