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.
Check out our How to Start a Business page.
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 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 Business Name Generator
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your emission testing is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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Use a Premium Logo Maker
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: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
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.