Start an emission testing 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 emission testing. 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 much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an emission testing?
One of the initial costs has to be the testing equipment itself. Equipment costs can range quite a bit, depending on the volume of business you anticipate. Testing machines can start around a few thousand and can go upwards to five figures. Additionally, you’ll need a garage to conduct the tests.
Certification for yourself and employees, licensing with the state, plus business and liability insurance will round out most of your higher startup costs.
What are the ongoing expenses for an emission testing?
Rent or mortgage for your garage, utility costs, and maintenance for your testing machine are some of the essential ongoing costs. Additionally, business licensing and insurance will incur moderate costs.
Who is the target market?
All vehicle owners and drivers, per state rules, must undergo regular emission testing. In some locations, commercial vehicles are subject to different testing procedures.
How does an emission testing make money?
Customers pay emissions testing businesses to check the emissions of their vehicles.
How much can you charge customers?
Emission testing costs for customers are relatively low, anywhere between $20-30. This means the volume of tests performed will be an important factor for your business.
How much profit can an emission testing make?
An average salary for an emission testing business owner is approximately $35,000 annually.
How can you make your business more profitable?
Combining an emission testing service with a larger mechanic-based business is a smart and profitable move. Presenting the public with more options can generate greater revenue and more repeat customers.
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 emission testing 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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
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
Certain state permits and licenses may be needed to operate an Emission Testing 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 information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
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 an emission testing
Since your sphere of interest will reside in automotive, it makes the most sense to advertise in auto trade magazines and online publications. It is also important to advertise for customers who aren’t tapped into your realm of business. Local community publications, upon magazines, and billboards are some conventional methods, with online advertising reflecting the newer marketing methods. Develop both.
Flyers, magazines, and other tangible objects still matter, but an online advertising scheme is cost-effective and can greatly expand your advertising range.
How to keep customers coming back
Since an emission testing business is specific and necessary, customer retention will often depend on customer engagement beyond the emission testing business. Offering other services keeps customers coming back for more than that one need. Once they are engaged, make their experience pleasant and personable.
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 An Emission Testing 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?
Ideally, an emission testing business owner should understand the inner workings of the vehicles they are testing. Understanding the science behind auto emissions is also important. A background which offers insight into these areas, such as an auto mechanic, can be helpful, but not always necessary for success.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an emission testing?
Depending on the state, emission testing businesses would be scheduling and performing tests for customers. State requirements vary, so some businesses may have customers come to them, whereas others may travel to businesses or other locations to perform tests. Once the testing is complete, and data is submitted, customers are informed of compliance or necessary next steps.
Additional activities may include ensuring equipment, facilities, and staff are certified and regularly maintained.
What are some skills and experiences that will help you build a successful emission testing?
Understanding the ins and outs of exhaust systems can give an emission business owner an advantage. Helping customers to understand their options beyond the initial testing helps to build customer loyalty and confidence. General business and advertising knowledge is also beneficial for a relatively niche business, such as this.
What is the growth potential for an emission testing?
Depending on the state you’re set up in, emissions testing is a reliable business, although the overall earning potential is modest. Many emissions testing businesses combine with other related businesses, such as mechanic shops, which we will discuss later.
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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 an emission testing?
Since emission testing is a specific business, some businesses choose to partner with mechanic shops or mechanics future emission testing as a service. By offering more than one service under one roof, businesses are more likely to succeed.
Be sure to determine the estimated customer need for your business. Some states have more stringent testing standards and can, therefore, support greater emission business saturation. Perform some market research ahead of launching a business.
Create a strong initial advertising presence. Make your name known and splash the market with special offers and initiatives to visit. Customers have to know you exist.
How and when to build a team
Emission testing itself doesn’t usually take more than one, or possibly two, technicians to operate. Needing a team will depend on what other services you offer, as well as the volume of customers.