Start a dent removal service by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
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 are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your dent removal service is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
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
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local ass
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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a dent removal service
The best way to promote is to get your name out. The more people know about you, the more likely it is your name will spread. Pass out flyers, leave business cards, and ensure your family and friends all know what you’re doing. Consider investing in a website as well, as many people will likely find services through search engines. Pay-per-click marketing and SEO tactics (optimizing your website so search engines promote you on the first page) may work particularly well.
If you franchise from a company like Dent Doctor, they’ll generally do much of the promotion for you. However, you may also need to perform your own local outreach as well.
How to keep customers coming back
The best way to attract customers is to be honest, fair, and good at your job. Educate your customers on how dent removal services work, and set their expectations right from the start. Not all dents can be fully fixed, but most can be substantially helped with the right services.
Promote your services as a way for customers to get full resale value from their cars. If people ignore their dents, their cars are more likely to rust and ruin the whole panel (or even the full car.)
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Dent Removal Service In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a dent removal service?
Paintless dent repair is still new, so there are almost no restrictions on it as of yet. While this is great for those who want to get started in the field right away, it can also make the quality uneven. Ultimately, the uncertainty may turn people off from even trying your services at all. You may want to keep your day job, and offer the services on the side until you get a feel for the market in your area.
Owners may want to offer free or deeply discounted services to help attract customers. Also, don't skimp on your tools and education! Consider becoming specialized before you get started, or offering one specific service only (such as hail dent removal).
How and when to build a team
You shouldn't build a team until you really have a strong base of customers. Once you do, look for those who have a natural aptitude for repairing everyday items, and be willing to either train or pay for your employees' certification. Ideally, you’ll want to hire those with experience, but depending on the area you live in, this may be hard to do.