As of March of this year, there is an increased number of aging vehicles that will force demand in the auto mechanic industry. During the last five years alone, the industry saw healthy growth and shows no slow down.
How can you compete with a car repair business of your own? It begins with a business plan.
Read on to learn how to develop an auto repair shop business plan.
Create an Executive Summary
The first portion of an auto repair shop business plan should be an executive summary that outlines the most important pieces of the business. This can include the following things:
- Marketing practices
- Financial projection highlights
- Services offered
- Specific niche or practice
You don’t necessarily have to have a specific niche or practice to create a car repair shop business plan. If you do, however, this is something you need to include in the executive summary.
Add in Company Information
The next section of an auto repair business plan is there for informational purposes. You’ll need the address of your shop in this portion of the plan.
If you haven’t already bought a space for your business to be set up, that may be fine too. As long as you show what your plan is to purchase a property, investors may still want to work with you.
If you are operating out of your home, note this in the company information section.
Among the locations, you’ll also need a company email, phone number, and business name.
Complete a Competitor Evaluation
Knowing how to open an auto repair shop involves taking a look at the competitors out there. When creating the competitor evaluation part of the business plan, you’ll need to detail the services your company will provide.
How does your car repair business differentiate from the others out there?
This will be one of the most important questions to answer throughout this process. By detailing the popular services you will provide, it should be clear how you can compete in the industry.
For most future car repair business owners, this will be the longest part of the business plan. If you have more than five or six services you offer, you can place the additional services in the appendix.
Know Your Target Market
Just like you will need to research the competitors, you’ll also have to research potential consumers that will want to work with your company. Find out what the inherent needs of a customer are.
This alone will take you deep into the minds of your potential clients. Once the research is complete, you should be able to classify a sole target market with one or two secondary markets.
Study the Industry
Trends come and go in every industry so this is no different when you are building an auto repair shop. To show investors you know enough about the auto repair business, you’ll need to provide more than your skills. Knowledge is power. Study the national trends that are occurring in the auto mechanics industry. A quick internet search will show you numerous facts and statistics about the business. These are important to know and important to use when conducting a business plan.
Furthermore, industry trends can explain how your company is expected to grow in the current market.
Show Proof of Experience
You may know you have the right experience to open up an automotive business of your own, but how will investors know? The only way to prove your experience is by outlining it in the business plan.
This section is more commonly referred to as the owner and management section.
The easiest way to go about this is by providing or creating a resume. The resume should include previous employers you’ve worked for within the same industry and the specific work you did for them.
You should also tie in any certifications or management degrees you have obtained. Pro tip: You should at least have a certification for the industry you want to work in.
An auto repair shop business plan is mainly created to find proper funding. For this reason, you’ll need to share how much funding you need and the financial expectations your company will have.
Starting this business takes a lot of capital because of the need for specialized equipment. Many don’t have the money to build a business like this by themselves.
You’ll need to uncover all of the equipment necessary to get the business started and identify the cost for each. From there, you will be able to assign specific dollar amounts by category.
Don’t forget to add in necessary pieces of software to get your company off the ground. For example, note the cost of Tekmetric shop management software.
For this portion of a business plan, it is essential to convey where the money needed will be going.
Make Financial Projections
Another important piece of getting funding includes making accurate financial projections. The best strategy to do this is to determine the average amount a customer will spend when purchasing from your company.
Knowing the average prices for the most popular services is also a good way to figure out a projection. With these two ideas in mind, you’ll have the starting point for calculating cost averages.
If you can’t figure out where your money will come from and how your business will see a return on investment, you can say goodbye to the idea of owning an auto repair shop.
Building an Auto Repair Shop Business Plan the Right Way
An auto repair shop business plan is going to come in handy when searching for funding and much more. Without the right information, your business plan won’t get you very far.
When you follow the tips outlined in this guide, your business plan will have everything it needs to help you with your startup.
For more business tips as you are getting started and beyond, check out the other posts on our blog.