If you’ve spent endless summers or weekends turning wrenches in your garage, it might seem like the next logical step to turn your hobby into a business where you can earn money. While this can be a worthwhile endeavor, here are six things you should be aware of before you sign the lease on your shop and turn on the lights.
1. Licensing and Regulations
Anytime you open a business, you will need to obtain a business license and a tax identification number (TIN). You also have to familiarize yourself with some regulations, from employee safety to the disposable of hazardous materials, before you can open your doors. Not dotting your I’s and crossing your T’s can lead to costly fines that may even shut down your business before you get it off the ground.
2. Certifications
While Automotive Service Excellence (ASE) certifications aren’t a requirement to open a shop or even work in one, customers feel a lot better about leaving their car in your hands if they see that blue gear logo on your wall or the lapel of your shop clothes. You can take a few different tests depending on your shop’s specialization, from general automobile repair to heavy engine repair on trucks or busses.
3. Start-Up Costs
In 2013, the start-up cost for an automotive repair shop was roughly $48,000. This includes things like renting a shop, purchasing equipment and paying for insurance, to name a few. It’s hard to repair cars with no tools and nowhere to do it, after all. Keep those start-up costs in mind, especially if you’re planning to secure a business loan to cover them.
4. Specializations
Are you planning to open your doors to all makes and models, or are you planning on specializing in a single brand of car, such as BMWs? You might lose out on some business opportunities if you choose the latter, but it can be lucrative depending on the types of vehicles people in your area own.
If you do want a specific brand to work on, make sure you look into any specializations you will need to acquire to become a certified specialist.
5. Contractors
They say that no man is an island — and no auto repair shop is either. You will need some help from outside contractors that might include but aren’t limited to:
· Lawyer: To help you dot all those I’s and cross all those T’s that we mentioned earlier
· Accountant: To help you keep track of the books
· Certified Garage Door Repair Technician: Because there’s no point in having a garage if the door won’t open — choose a certified technician to make sure that the job is done right the first time
· Equipment Repair Technician: Since you probably won’t have a hydraulic lift or compressor specialist on staff
The services these individuals provide will cost money, so make sure you include that in your initial calculations, so you’re not caught flat-footed.
6. Marketing
No one likes thinking about marketing, but word-of-mouth will only carry you so far when you’re opening a new business. If you don’t have any marketing skills, invest in the assistance of a professional to help customers can find you. Providing excellent service can encourage word of mouth, but you only get the chance to repair cars if drivers can find you in the first place.
Opening an auto repair shop isn’t as complicated as it sounds, but it does take some preparation to make sure everything is done right. Taking that time to prepare will mean the difference between a shop that is successful and one that closes it’s door before its first year is over.