If you have a passion for cars and like to work with your hands, owning a mechanic shop might be your dream job. You'll get to make a living by constantly working on cars. That said, opening a business of any kind requires a significant preparation and an auto repair shop is no exception. This guide explains how to start a mechanic shop.
What Education Do You Need as a Mechanic?
Licensing and related educational requirements for auto mechanics vary between states. For example, Florida doesn't require auto technicians to get a license to work on trucks or cars (although anyone who receives money to repair other people's motor vehicles must register with the Florida Department of Agriculture and Consumer Services).
In contrast, in Michigan, mechanics must obtain a license. As part of the licensing process, a person must pass a certification test for each repair category they want certification for (engine repair, automatic transmission repair, etc.). This includes a practical exam. Of course, to pass, you'll have to know how to fix a car.
Whether your state has strict licensing and education requirements, you'll have to learn the skills of the auto mechanic trade. Hands-on learning is essential. Doing an apprenticeship under an existing shop owner is one option. This will further give you insights into the other aspects of running an auto shop, such as customer service, staffing, and marketing.
Some community colleges and technical schools also offer mechanic training. There are even automotive degree programs. For example, the University of Northwestern Ohio and Weber State University offer bachelor's degrees in automotive technology. However, these programs are likely more geared toward individuals who want to work as a technician for a car manufacturer.
How to Prepare Before Opening Your Mechanic Shop
Whether you train at a formal educational institute or in a mechanic's shop, perfecting your technical skills is the first step toward opening your own car repair shop. You can then start planning your business. Follow the steps below.
Define the Services You'll Offer
Auto mechanic shops can be more generalized or offer specialization in niche areas, like collision repair versus regular servicing. There are also different types of vehicles you might focus on, such as regular cars versus mid- to large-sized trucks, busses, and farm equipment. The majority of repair shops target regular car owners who need repairs, tuneups, and general servicing.
Set a Clear Price List
Define a clear price list for your services in advance. An independent auto mechanic can generally charge from $70 to $100 per hour. This is on top of the cost of materials like replacement parts. You may also choose to charge a flat fee for some basic services like changing brake pads or changing oil.
Location is also a factor. Areas with a high concentration of luxury vehicles may have higher prices for mechanics. Do your research by scoping out existing mechanic rates in your city or county to get an idea of what's standard.
Calculate Your Mechanic Shop's Startup Costs
An auto mechanic shop requires significant upfront investment. The technology and tools you'll need can be pricey. Make a list of all overhead costs you anticipate, including:
- Mechanic licenses and certifications
- Automotive diagnostic machines
- Large automotive repair tools like an engine crane and hydraulic lift
- Mid-sized automotive repair kit, including a jack, tool set, workbench, and air compressor
- Small automotive repair tools like various wrenches, screwdrivers, fuses, drills, pliers, and hammers
- Automotive supplies and spare parts (e.g., oil for oil changes, transmission fluid, brake fluid)
- Worker supplies like gloves, boots, and headlamps
- Rent for a commercial garage space
- General business tools like a computer and phone
- Business license and insurance fees (more on these points below)
All of these fees can add up. If you hire employees, there are also staffing costs to consider. That said, you might prefer to start small and wait to expand your team until your automotive repair shop is better established and has more business.
Write Your Business Plan
Now you can write an auto mechanic shop business plan. The U.S. Small Business Administration (SBA) explains that this is like a guidebook for your company. It includes a business description, market competition analysis, financial projections, and more. Your business plan can also be used to convince a bank, investor, or another lender to give you the business loans you may need.
How to Formally Open Your Mechanic Shop
With the above planning complete, you can take steps to officially start your auto repair business. The process will vary depending on your state's licensing requirements for mechanics and for businesses in general. Here's a rough breakdown of what to expect.
Get the Necessary Mechanic Shop Certifications
As mentioned, licensing and educational requirements for auto mechanics vary between states. In addition to meeting any state licensing and educational requirements, you may want to get ASE certification from the National Institute for Automotive Service Excellence. This is a nationally recognized auto mechanic certification that can improve your business's marketability.
ASEcertificationtraining.com has a map where you can click on your state for information about state-specific certification and licensing requirements. Note that (despite the name) this website is not officially affiliated with ASE. Further, you should check with your relevant state regulatory body for auto mechanics to confirm these details.
Register Your Mechanic Business With the State
In addition to getting required mechanic-related licenses to work in your state, you should also register your mechanic shop as a formal business entity with your state. This can offer tax advantages and protect your personal liability in case your business gets into legal trouble. Possible types of entities include a sole proprietorship, corporation, and limited liability company (LLC).
Different business entities have different federal and state tax filing requirements, so choose your entity carefully. If you don't know what business structure is right for you, consult a business attorney for advice before proceeding.
Choose Your Business Name
When you register your business with the state, you'll have to provide a business name. This will become the official, legally recognized name for your auto mechanic shop. Choose wisely. You want to select a moniker that's easy to remember and reflects what your business does. Depending on your state, you may have to include your entity designation (e.g., LLC) in the name.
Set Up Systems for Tax Filing, Bookkeeping, and Banking
Once your mechanic shop is legally registered, obtain any state or federal tax ID numbers you may need. For example, if you plan to hire staff, you'll need an employer identification number (EIN). At this point, you should also set up any bookkeeping and banking you plan to use. For instance, setting up a business bank account will make it easier to differentiate between personal and business money.
Invest in Insurance
Liability insurance is a must for auto mechanics. Auto repair shops can be held liable if their work is deemed negligent and was the cause of a crash. When taking out insurance, you might be asked to provide proof of certain credentials, such as an ASE certification. Note that you may have trouble securing insurance without such certifications.
Further, if you are renting a garage space for your auto mechanic shop, you will want to insure the property plus all the expensive tools and materials inside. Finally, if you hire people, your state may require workers' compensation insurance.
Market Your Mechanic Shop to Attract Potential Customers
You're ready to open the doors of your auto mechanic shop, but how will you actually get new customers? A marketing plan is the answer. Here's a quick guide to get you started:
- Establish your brand. Your brand is your image - how others view your mechanic shop. A brand consists of many small details, like a slogan, logo, and colors used in marketing materials. All of these components should add up to create a cohesive identity. If you're not a branding pro yourself, you can find experts to help you via Upwork.
- Create a website. Your website should include important information about your business, such as your certifications, services offered, location details, and contact information. Your website should also reflect your brand identity. You can make a website yourself using design tools like Wix, WordPress, or Squarespace. Alternatively, you can hire a designer.
- Establish an online presence. Set up business pages on review sites like Google My Business. This makes it easier for new customers to find you online. Old customers can also leave testimonials. You can also create social media accounts to help connect with the auto mechanic community and engage with your customer base.
Do you want more detailed tips on marketing an auto mechanic shop? Check out these resources from Indoor Media and Spectrio. Suggestions range from starting a car advice blog to posting before-and-after repair photos on social media.
Find Ways to Make Your New Business More Efficient
As your auto mechanic business grows, you will get more customers and may need to hire employees (if you haven't already done so). As business picks up, make sure to keep operations organized and look for ways to enhance efficiency. For example, you might implement an online scheduling system for your team or invest in payroll technology.
A growing business also means growing profits. To keep your money management in check, trust Skynova's accounting software. You can track invoices, purchase orders, and other financial documents in one place. Skynova also provides user-friendly business templates that will save you time when issuing business paperwork.
Start a Mechanic Shop With Help From Skynova
As an auto mechanic, you want to spend your time working with cars. However, as a business owner, you're responsible for tedious administrative tasks - like financial paperwork. Skynova's accounting software and other software products can simplify your money management. With less admin to worry about, you can spend more time focusing on growing a thriving business.