How to Start a Dent Removal Service

Start a dent removal service by following these 10 steps:

1. Plan your Dent Removal Service
2. Form your Dent Removal Service into a Legal Entity
3. Register your Dent Removal Service for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Dent Removal Service
6. Get the Necessary Permits & Licenses for your Dent Removal Service
7. Get Dent Removal Service Insurance
8. Define your Dent Removal Service Brand
9. Create your Dent Removal Service Website
10. Set up your Business Phone System

We have put together this simple guide to starting your dent removal service. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Dent Removal Service Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a dent removal service?

Many people can get started without a large investment, especially considering you can perform this service on the go and without assistance. By saving yourself on rent or lease costs, you’ll have more money to invest in the tools you need.

A power dent puller can cost around $800, but many of the other tools can be purchased for less than $50. Your final costs will depend on your own personal techniques, and the services you offer.

You may also need a small business license as well. The exact cost of the license will be dependent on your neighborhood and state. If you choose to franchise your business from an established name, your costs will be much more substantial. You can expect to pay around $20,000 or more.

What are the ongoing expenses for a dent removal service?

Ongoing expenses for a dent removal business may include the following:

• Marketing/advertising costs
• Equipment maintenance
• Rent/mortgage costs
• Continued education in dent removal
• Employee salaries

Who is the target market?

If you’re looking to perform paintless dent removal (PDR), then your ideal customers are those who have minor dents (such as hail pockmarks). For those who want to offer full-scale services for larger dents, you’ll be catering to those in larger accidents as well. It's important for both you and your customers to know that not every dent can be repaired. Those that are too severe may need a total panel replacement.

How does a dent removal service make money?

Owners need to set their prices such that they cover their equipment, labor and rent costs. For more complicated repairs, customers can expect to pay more to account for the time and expertise necessary to fix the car.

How much can you charge customers?

Prices can vary considerably, depending on who the specialist is, the size of the dent, and what neighborhood you’re servicing. If you have years of experience under your belt and live in a nice area, you can charge up to $150 for the removal of a one-inch dent. You can expect to charge about $20 for each additional half-inch the dent covers.

Small marks from hail damage will typically be much cheaper. Small dents may run as low as $30, increasing in increments of $10 depending on the severity of the dent.

How much profit can a dent removal service make?

For those who keep their expenses low, profit can be considerable. If you operate at an 80% profit margin with 300 customers a year, you can expect to make about $24,000 in pure profit.

How can you make your business more profitable?

You can consider expanding your services once you have a steady base of customers coming in. There are many superficial body repairs you can perform to improve the look of people’s cars without learning any additional skills. For example, you may want to offer car washing or waxing services. You can also offer your own classes for those who want to learn more about dent removal, though this may end up increasing your competition.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your dent removal service is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, it is necessary to obtain a dent removal license. Certain state permits and licenses may be needed to operate a dent removal business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Service Agreement

Dent removal businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your dent removal business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Certificate of Occupancy

A dent removal business is generally run out of a garage. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met. 

• If you plan to lease a location:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a dent removal business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

• If you plan to purchase or build a location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your dent removal business will be in compliance and able to obtain a CO.

Trademark & Copyright Protection

If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.

Learn more about trademark and copyright protection

The nature of legal requirements in distance education is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

You will need an interest in and inherent talent for repair work. While it's not necessary to be a certified mechanic or body-work expert, it helps to have a strong base knowledge of the materials and tools it takes to get a car back to its original condition.

What happens during a typical day at a dent removal service?

Those in dent removal services may perform the following jobs in a day:

• Intake processing
• Dent repair
• Continuing education for new cars/techniques
• Advertising/marketing business
• Tool maintenance

What are some skills and experiences that will help you build a successful dent removal service?

If you’re planning to perform PDR services, then you may not need very many technical skills. Owners can get into this business with no formal training — all they really need is to have a talent and interest in being ‘handy’. To learn the specific process, you can either watch specialty DVDs and practice with your own equipment, or you can take an official class taught by a certified instructor.

For more complicated dent removal, you may need more formal classes and training. Most communities offer classes to teach you more about how to match paint, remove dents from panels, and leave the vehicle looking like new.

Finally, a strong sense of ambition and people skills will be important. There are a lot of opportunities for PDR services from commercial vehicle owners with large fleets. If they trust you for all of their repairs you'll likely meet and exceed your incomes goals quickly.

What is the growth potential for a dent removal service?

Dents are common, regardless of the part of the country you live in. However, the rate of the accidents and natural disasters will likely stay the same throughout your career. To really grow your business, you’ll need to concentrate on building up loyal customers who tell other people about you, and who refuse to trust their car with anyone else. Those who start to outgrow their area can open other branches in different parts of their state.