How to Start an Auto Repair Business That Profits

One thing you can count on is that automobiles are going to break down at some point. All machines do. But is repairing them a lucrative business model? Before you venture down this highway… consider the most successful financial plan for you. Let’s look at the options of becoming the owner of an auto repair business.

First…the big picture. The auto repair industry, like many businesses, took a hit from the Covid-19 pandemic. However, the non-discretionary and more complex auto repair services experienced a far less severe impact compared to services that could be delayed, such as tire and oil changes. Additionally, analysts believe we are in the recovery with the industry rebounding in 2021 and its market value expected to reach nearly $830-Billion by the year 2023.

Since the market is showing signs of improvement and knowing that the auto-repair industry will always be a necessity, the next step is to create a plan. This will help determine if this is a solid financial investment and set you up for success.

Creating a Business Plan

There are online help guides to prepare a business plan. The US Small Business Administration (SBA) provides a template for business plans. Have these details ready:

  • Summarize why you expect your auto-repair business idea to be a success
  • Describe in detail the problems your shop will solve
  • Research the market- what’s your competition doing?
  • How will you organize, legally? Uncle Sam will need to know. Will you be a sole proprietor, LLC, C or S Corp? There are taxes to be paid!
  • Outline your services
  • How will you sell yourself? Sales and Marketing Plan
  • Website Development/ Social Media Advertising
  • Get Customers in the door and retain them
  • Outline your funding requirements for 5 years (Bank account, credit)
  • Know your costs and how you will pay for them

What to Keep in Mind When Starting an Auto Repair Business

Remember the expression, “…you’ve got to spend money to make money”? While estimates vary depending on the size of your shop, let’s crunch the numbers. Initial start-up could cost in the neighborhood of $50,000. There’s a few more items in the red column, add on: Labor costs including mechanics and administrative will be $25-$100/hour per person. Insurance will cost about $4,000 a year and budget up to $20K per month for overhead like supplies, equipment, inventory, etc. Don’t forget your certificate of occupancy, permits, licenses, real estate costs, and insurance!

There’s a look at the money going out, what about the money coming in? The auto repair industry provides service. You are completely dependent on vehicles which will need repair and well-trained mechanics who are able to quickly and efficiently get the job done! Customer satisfaction will keep you in business. Based on variables, some auto-repair business owners could see earnings from $30k-$100K annually if they are able to build up business over time.

Once all of those positives and negatives are accounted for, there is still the hassle of creating a website and setting aside a budget for marketing expenses as well. Overall, there could be a total investment of hundreds of thousands of dollars. With so many hurdles to overcome and unknown or unplanned expenses, it is no surprise that so many independently owned businesses struggle to succeed.

But wait – there is another option!

Try an Auto Repair Franchise

Another option that could be worth your while is to consider buying into an existing franchise in the auto repair industry. To own an AAMCO franchise, for example, fees begin at about $40,000. However, AAMCO prides itself in providing a full investment picture, taking guesswork out of the equation and preparing franchisees for a total investment of at least $225,000. With that, you are the owner of a highly recognized brand which has been around more than 50 years. Franchisees receive on-going education in the ever-changing world of auto repair as well as looking towards the future of the industry. Your investment will cover all the details required to open a franchise following the AAMCO business model.

In addition to the brand strength franchising can offer you, AAMCO franchisees acquire numerous advantages over independent auto repair business owners. The model itself has proven to be resistant to the challenges of recession, shown by AAMCO’s ability to provide essential services to keep drivers on the road during the pandemic. Those reasons for confidence only add to the industry-leading operational support.

Not only do franchisees gain access to proprietary operational systems but also the website and marketing material that are so often neglected. Entrepreneurs also receive assistance through the real estate process and training on the latest trends and cutting-edge technology – a necessity since vehicles are continually being updated and improved. You would also be in a network of nearly 600 centers.

AAMCO franchisees invest in a proven brand and a business model that is set up for future success. As cars stay on the road longer than ever, complex repairs are growing in importance. Alongside those trends, the total car care expertise synonymous with AAMCO perfectly positions its centers to attract business around emerging technology such as electric or hybrid vehicle repair moving forward.

If the AAMCO franchise model is a better option for you, and you want to learn more, details are at your fingertips. Visit our website for information about franchising today!

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