Business Overview

This business employs automobile mechanics who provide repairs and vehicle maintenance to consumers and businesses. The car repair shop might also offer services like custom installation of stereo and alarm systems, window tinting, and aftermarket upgrades.

Who is this business right for?

This business is good for people who are mechanically-inclined. In most states, a license is required to work as a mechanic. Each vehicle manufacturer typically has proprietary processes and service protocols that a mechanic must follow. Because of this, specialized schooling is a practical necessity.

Business owners usually work long hours away from their families.

What happens during a typical day at a car repair shop?

Business owners usually have to check maintenance logs first thing in the morning, check upcoming appointments, and meet with shop managers about various stock or supply needs. If the owner also works in the shop, then a typical day will involve working on a variety of different vehicles.

A shop owner must also negotiate contracts with local businesses that provide revenue. For example, if a shop partners with a taxi company to provide maintenance services, then the owner would need to negotiate the contract and terms.

What is the target market?

Clients for auto repair businesses are unique in that they all have one thing in common: a broken or serviceable vehicle. The best types of customers are those with a service contract. Ongoing service contracts ensure steady income for the shop and reduce cash flow problems both in the short and long-term.

The worst type of customers may be the one-time customers who take advantage of special discounts. These types of customers are price shoppers and may actually cost the shop money.

How does a car repair shop make money?

An auto body shop or car repair shop makes money by charging a flat fee or hourly rate for service. In some shops, owners set routine maintenance fees, charging a set price for simple maintenance like an oil change. In other shops, all work is based on parts and labor cost.

What is the growth potential for a car repair shop?

A small auto repair shop can be run out of an individual’s garage in some states. While licensing is usually necessary, there are typically no restrictions on how the shop owner operates the business as long as all local codes and ordinances are obeyed.

A large operation it usually run out of a commercial shop, which is purpose-built for the business, including mechanical and hydraulic lifts, a commercial paint booth, professional tools, and diagnostic computers.