An auto repair shop business requires start-up fees, garage facilities expenses, advertising costs and staff expenditures. The repair shop location is critical to attract and retain customers. Auto mechanic and maintenance staff must meet minimal training requirements and maintain appropriate certifications. Additional responsibilities of the shop owner include business insurance and health insurance to cover all liabilities. A garage owner must apply for a business license to operate in most states.
Train as a licensed technician. Send all shop mechanics to earn the required certifications and keep them updated. An auto repair shop owner should have formal training in auto mechanics for foreign and domestic vehicles. You can earn a certificate or license through a local trade school or through professional training programs offered by car manufacturers and dealerships.
Apply for a business license for an auto repair shop. A business license is required to conduct business on a regular basis in any given state. Your local business and finance office can provide the necessary paperwork, fee schedule and requirements for obtaining a license.
Set up separate business checking and savings accounts for your auto repair business. A business requires start-up fees, operational costs and emergency funds. Your purchasing and payroll departments need access to funds for parts, supplies and staff costs.
Obtain a federal tax identification number from the federal government. A federal tax identification number can be used to receive a business line of credit and it's used on all business contracts. A line of credit may be required to stock your repair shop with standard maintenance supplies such as oil and antifreeze and routine parts such as belts, hoses, filters and spark plugs.
Prepare a business plan proposal with the types of repairs and number of vehicles to be fixed annually. The proposal outlines your plans for the business, the anticipated income, the operational costs, the staffing expenses and the short-term and long-term goals. This business plan can be presented to partners, investors or banks for extended credit.
Find a good shop to rent, lease or purchase. The repair shop must be in a populated area, with at least two service bays and lift equipment inside and ample parking space for vehicles to be dropped and stored outside. Consider room for a waiting area and customer service counter that can be open extended hours.
Purchase business property and automotive insurance that will cover damage to any vehicle in your possession and any lawsuits associated with the repair shop. Insure your business property and equipment against unexpected loss. Medical insurance for shop mechanics is important for major shop accidents.
Hire staff to help your run the shop. You need at least one other employee to help you with major repairs, engine overhauls or radiator replacements. A cashier or book-keeper can help with payment processing, accounting and payroll. All small business owners must be familiar with employee paperwork, work requirements and medical insurance options.
Advertise your business in auto trade magazines. Many means of free advertising are available. Build your own website. Use your advertising budget for business cards, weekly flyers, local billboards and print ads. Place information ads in print and online. Publicise grand opening specials.
Research zoning ordinances and restrictions before opening your business.
Do not be overly optimistic and sign a long-term lease without a guarantee of revenue from your new business. Negotiate the lease terms based on a worst-case scenario.