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Auto Repair and Car Wash Business Plan
Start your own auto repair and car wash business plan
DIY Wash N' Fix
Service business analysis.
The industry we participate in consists of quite a few sub-industries. The ones that pertain most towards DIY Wash N’ Fix are the Car Wash Industry, the Auto Parts Industry, and the Mechanical Repair Industry.
5.1 Mechanical Repair Competitors
These competitors are less direct than the previous ones because we differ in terms of services. There are different types of competitors:
- Independent repair stores : These are typically a small facility run by one owner. They face a declining market share in the favor of big chains and franchises, primarily because they cannot retain a skilled workforce. Commitment is their competitive advantage.
Therefore, the competitors we need to carefully watch are the big repair stores (chains, franchises, licenses) that offer many services thanks to a skilled workforce and heavy marketing expenses. They are able to retain customers and have the advantage of their brand recognition.
5.2 Auto Parts Industry
The after-market auto parts companies are retailers that sell directly to the end users and own stores throughout the U.S. Forty percent of all U.S. auto parts sales are made by the “Big Eight” auto part chains. The six largest retailers are: AutoZone, Advance, CSK, Pep Boys, Discount, O’Reilly, NAPA (National Auto Parts Association) and Carquest.
The following trends are prevalent within the industry:
- Aging U.S. vehicle population (average car age is 8.5 years).
AutoZone is the number one retailer in this market; last year they realized $3.8 billion in sales. Auto part chains are expecting sales to continue as more car owners buy parts to do repair and maintenance themselves. This is a positive indicator for the potential success of DIY Wash N’ Fix.
Mechanical Auto Repair Industry
The auto repair industry is composed of two categories: the collision repair industry and the mechanical repair industry. Considering our business, with our facility and tool constraints, we will focus on the mechanical repair market and not the collision repair market. However, we expect we will have some customers wanting to do minor collision repairs.
Like the automotive industry as a whole, the mechanical repair industry is currently experiencing major structural changes. These trends include:
- The growing importance of customer service and satisfaction.
5.3 Car Wash Industry
The car wash industry has entered the mature phase of its life cycle and is becoming increasingly competitive. The increasing competition is becoming apparent through the shift in three major industry trends. They are:
- Gas station chains : many are offering car washes either on a free or low-cost basis, investing in high technology equipment that requires little maintenance or labor.
5.3.1 Consequences of Trends
The consequences of these trends are:
- Car wash service is combined with other services.
The main threat within the industry is the water recycling regulations that some states impose. For instance, Maryland requires car wash businesses to recycle 80% of the used water.
The car wash industry is seen as a profitable industry, provided that owners can differentiate their firms, create a loyal customer base, and develop methods to attract new customers. Moreover, profits are greater when a car wash is combined with other car-related services that provide better overall value and helps retain customers. In order to succeed in the industry, businesses must provide:
- Relevant and quality other car services.
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Auto Repair Business Plan Template
Written by Dave Lavinsky
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their auto repair businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an auto repair business plan template step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your auto repair business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start an auto repair business, or grow your existing auto repair business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your auto repair business in order to improve your chances of success. Your auto repair business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Auto Repair Businesses
With regards to funding, the main sources of funding for an auto repair business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Personal savings is the other most common form of funding for an auto repair business. Venture capitalists will usually not fund an auto repair business. They might consider funding an auto repair business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results. With that said, personal savings and bank loans are the most common funding paths for auto repair businesses.
If you want to start an auto repair business or expand your current one, you need a business plan. Below are links to each section of your auto repair business plan template:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of auto repair business you are operating and the status. For example, are you a startup, do you have an auto repair business that you would like to grow, or are you operating a chain of auto repair businesses?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the auto repair industry. Discuss the type of auto repair business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of auto repair business you are operating.
For example, you might operate one of the following types of auto repair businesses:
- Auto Service Shop : this type of auto repair business focuses on routine servicing of cars and trucks, such as oil changes and tire rotation.
- Transmission Repair Shop: this type of business focuses on maintenancing, diagnosing and repairing transmissions in all types of cars.
- Body Repair Shop: this type of repair shop focuses on repairing damage to the body of a vehicle, primarily cosmetic damage due to collision.
In addition to explaining the type of auto repair business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, amount of monthly revenue, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the auto repair industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the auto repair industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your auto repair business plan:
- How big is the auto repair industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your auto repair business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your auto repair business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: car owners, truck owners, luxury vehicle owners, classic vehicle owners, and businesses that own vehicles such as car rentals, car dealers, delivery businesses, and repairmen.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of auto repair business you operate. Clearly, luxury vehicle owners would respond to different marketing promotions than truck owners, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most auto repair businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other auto repair businesses.
Indirect competitors are other options that customers have to choose from that aren’t direct competitors. This includes auto parts stores (for DIY repair). You need to mention such competition as well.
With regards to direct competition, you want to describe the other auto repair businesses with which you compete. Most likely, your direct competitors will be auto repairs located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of vehicles do they maintenance and repair, or what types of maintenance and repairs do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide better maintenance and repair services?
- Will you provide services that your competitors don’t offer?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an auto repair business plan, your marketing plan should include the following:
Product : In the product section, you should reiterate the type of auto repair company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to auto repair, will you provide car rental services, repair financing or any other services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place : Place refers to the location of your auto repair company. Document your location and mention how the location will impact your success. For example, is your auto repair business located in a busy retail district, industrial area, etc. Discuss how your location might be the ideal location for your customers.
Promotions : The final part of your auto repair marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your auto repair business, including speaking with vehicle owners in person or on the phone, maintenancing and repairing vehicles.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to repair your 50th car, or when you hope to reach $X in revenue. It could also be when you expect to expand your auto repair business to a new city.
Management Team
To demonstrate your auto repair business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing auto repair businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing auto repair shops or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, how many cars will you repair per week? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your auto repair business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an auto repair business:
- Location build-out including design fees, construction, etc.
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your shop location lease or descriptions of repairs you are working on.
Putting together a business plan for your auto repair business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the auto repair industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful auto repair business.
Auto Repair FAQ’s
What is the easiest way to complete my auto repair shop business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Auto Repair Shop Business Plan.
What is the Goal of a Business Plan's Executive Summary?
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of auto repair shop you are operating and the status; for example, are you a startup, do you have an auto repair shop that you would like to grow, or are you operating a chain of auto repair shops?
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Automotive Repair Service
BUSINESS PLAN
LR AUTOMOTIVE
6890 Ranch Drive Traverse City, MI 48963
LR Automotive presents up-to-date financial information, helpful to anyone considering starting an automotive repair service.
EXECUTIVE SUMMARY
Parts & labor, community activity, organization, company philosophy, job descriptions.
The need for a full service automotive center with competent and trusting mechanics is always there. Chuck Liepshur and Rich Rudy have built, and are still accumulating, a clientele that has followed them from location to location through promotions and careers. These clients are loyal and will continue to follow LR Automotive, when we move to our new location.
With advertising in local newspapers, mailers and handbills, business should increase by a margin of 10% annually. People are always looking for an honest auto repair facility which is committed to customer service, reliability and promptness. By being fully committed to our clients, our customer base will increase and will provide a stable ground for our business to grow.
Our company will be offering two products: the first being automotive service which will generate a gross profit margin of 60% on average. This will include bumper-to-bumper service on cars and light trucks, i.e. brakes, computer diagnosis, suspension, exhaust and electrical. The sale of tires will provide a 20% profit margin, but will also help us sell service such as front-end parts and front-end alignments as needed. The only time our services will be performed is when and if they are needed or they are recommended on the O.E. manufacturer's maintenance schedule. Service should provide 90% of the total sales with tire sales making up the remaining 10%.
The parts and products we will use will also help in our appeal to customers. We will use top of the line, name brand parts such as Auto-X, Reman, and Xilco. Customers always look for a well-known brand name when deciding where to take their vehicle.
Counterfeit parts will never be used at LR Automotive.
Last, but not least, warranties also help when customers are deciding where to get their work done. Our warranties will meet or exceed industry standards.
Our target customers are the owners of auto and light trucks. This area of service is always growing. Automobiles are being kept an average of 3-5 years and each vehicle requires servicing an average of 2.7 times per year.
As new vehicle prices increase, consumers are inclined to maintain and service their vehicles for longer periods of time. As a result of this trend, the service business will continue to grow.
Our competition will consist of auto dealerships, larger tire and service chains and gas stations with service departments. These are very successful because they are well-known and offer a wide variety of services. The weakness of these companies will be our advantage. These weaknesses include the need to keep the cars several days to finish work. LR Automotive will make every effort to finish jobs the same day. Also, dealerships tend to distance themselves from their clients, refusing to take the time to educate the customer about their problems. Our employees will take the time to point out our customers' vehicle problems and discuss all the possible solutions explaining the advantages and disadvantages of each. We are also going to treat our customers as we would like to be treated, spending time with each one so they know they're not just a number to our business. Follow-up calls to ensure satisfaction will also be made after we have completed the work.
Our customers will be made up of our existing clientele, along with a new customer base which we will gain through advertising. Through our satisfied customers, word will spread that LR is the automotive repair shop that customers can trust, which will increase our customer base. These customers will remain satisfied because they will be happy with our service, prices and the atmosphere we provide.
We will use only quality parts, which will be readily available in our stock or via our local parts supplier. When we service autos, we will never take short cuts and will never substitute quality in order to obtain a lower price. Our parts warranties will reflect those of the manufacturer.
Our labor warranties will be as follows:
- Brakes - Standard brake job -1 year or 12,000 miles - Brake overhaul - 2 years or 24,000 miles
- Shocks - 1 year or 12,000 miles
- Struts - 3 years or 36,000 miles
- Suspension parts - 1 year or 12,000 miles
- Belts - 1 year or 12,000 miles
- Exhaust - 1 year or 12,000 miles
- Alternator/Starter - 6 months or 6,000 miles
- Alignment - 6 months or 6,000 miles
- Water pump -1 year or 12,000 miles
- All other warranties - 90 days or 4,000 miles
We plan on being a visible part of the community in which we are based. We will join community groups and participate in local activities in order to understand community needs. As a result of our visibility, we will get to know the local patrons and that will help LR's business to grow within the community.
We plan on working on 6 cars per day when LR first opens. Our labor force will include two certified technicians and one salesperson. Every employee in our establishment will be knowledgeable in the auto service area. As our business grows and becomes more profitable, we will add trained personnel to ensure the best service available.
- To provide an atmosphere where the consumer feels confident about his/her purchase(s) and relationships with LR's service employees.
- Being honest and sincere with the clientele.
- Being community oriented.
- To create a place where customers feel good about recommending LR to friends or relatives for their auto concerns.
- To provide a comfortable living for ourselves and our employees.
- To provide a healthy work environment where our employees enjoy coming to work each day.
- To provide benefits for ourselves, our employees and families (i.e. 401K plans, health and dental plans).
- Our goal is to keep our employees long term by treating them as we would wish to be treated ourselves.
Co-President
To ensure survival and growth of LR Automotive Service and control the operation.
- Act as a team leader, making sure that LR team stays on track.
- Establish and implement company policy, performance standards, policy and procedures.
- Establish and implement employee controls - feedback based on performance standards, indicators, goals, etc.
- Paying invoices
- Accounting systems
- Sales and expenses
- Assets and liabilities
- Buying and inventory control
- Advertising and promotion
- Reconcile statements
- Planning (long and short range)
- Answer customer complaints
- The spark to imagine
- The daring to innovate
- The discipline to plan
- The skill to do
- The will to achieve
- The commitment to be responsible
- The leadership to motivate
- Scheduling, merchandise store, maintain paper flow, housekeeping and equipment maintenance.
- Parts room and warehouse organization.
- Business development, fleet accounts and national accounts.
Salesperson
Take care of customers that come in the door, and relieve Co-Presidents of detail work.
- Completing work orders and calling customers when job is done.
- All other paper work, i.e. filing work orders daily, inventory management, mailing invoices, PIPT's filing emissions certificates, getting invoice numbers on parts bills and clear pending documents.
- Housekeeping - keeping counters clean, displays and vending machines dusted, customer waiting area clean daily, empty waste baskets, rest room detail.
- Supplies - invoices, sales slips, cash receipts, paper towels, keep sufficient change in cash drawer.
- Special assignments as directed by Co-Presidents.
- Keep all display materials current, window signs, ad boards, manufacturer rebates and promotions.
Meet or exceed assigned daily objective. Maximize productivity per hour worked. Get quality work done in the shortest amount of time possible.
- Get quality work done, fast.
- Safety check all cars worked on.
- Add-on sales, direct contact with customer, both face to face and on the phone.
- Housekeeping.
- Equipment maintenance.
- Assist in organizing warehouse and parts room.
Operating Expenses
Start-Up Cost
THIS PAGE INTENTIONALLY LEFT BLANK SEE NEXT PAGE FOR SALES PROJECTION & CASH FLOW TABLE
Assumptions
Average 6 vehicles per day @ $175.00 per vehicle
In 2nd 12 months, average per vehicle increases 10% to $192.50
Inventory Expenses
40% of sales
Average expenses per month
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The 7-Step Business Plan to Grow Your Auto Repair Shop
- by Kyle Zhao
- | February 23, 2022
- | Business Advice , Tips
Does your auto repair shop’s growth rely merely on hope, or do you strategize how to drive your business forward?
While many auto repair shops and most businesses operate on hope—whether it’s hoping new target customers and repeat customers show up to spend a lot of money—it’s not an effective plan, says Al Wheeler, Chief Executive Officer of ShopPros , a management and training company that offers a complete business system for independent auto repair shops.
Wheeler, who has 35 years of experience in the automotive industry, understands the challenges that every auto repair shop owner faces. In a recent webinar , Wheeler shared why shops should consider creating a detailed financial plan for growing and sustaining their auto repair business.
“As business owners, we typically spend the majority of our time working in the business and not on the business,” Wheeler says. “I think it’s especially prevalent in our industry because you’re wearing so many hats throughout the day, and our days seem to be consumed by firefighting much of the time. As a result, the business trends really tend to drive us, rather than us driving business.”
The sample auto repair shop business plan discussed in this article outlines a strategy for:
- Discovering the potential in your auto repair shop
- Analyzing the current status of your auto repair shop
- Setting repair shop goals
- Training and planning
- Implementing change
- Monitoring and measuring
Why do you need a business plan for your auto repair shop?
Think of a business plan as a GPS for your auto repair shop. Not only will a business model provide details and direct you from point A to point B, but it also optimizes your route and helps you avoid potential pitfalls along the way.
According to research by Entrepreneurial Dynamics , using business plans helps you become:
- Twice as likely to obtain a bank loan
- Twice as likely to create investment value
- 49% more likely to grow
While goal setting remains an important aspect of this equation, it’s not the same as business plans, which analyze current performance and define specific actions to reach purposeful results. “Keep in mind that setting goals, while important in business, does not constitute a business plan,” Wheeler says.
“Business planning really lays the foundation for continuous improvement,” Wheeler says. “I like to call it a success cycle for your business. What fundamental steps do you need to take to create an environment of continuous improvement within the business?”
Creating a cycle of success is essential for your auto repair shop, and where a clearly defined business plan will play a big role.
- The success cycle starts with a practical understanding of current performance against your desired or optimized outcome. Complete this analysis in thoughtful detail.
- The planning process then kicks in, helping you define specific actions to take advantage of outcomes.
- As results of this success cycle start to roll in, employees across your auto repair shop will begin to believe more and more in the business’s potential. This positive energy keeps the success cycle in motion, resulting in even more growth.
“It’s about establishing (this) success cycle for your business. It builds on belief, establishes potential, and leverages the specific actions you choose to deliver those purposeful results,” Wheeler says.
Can your shop survive without a plan?
According to the U.S. Bureau of Labor Statistics (BLS) , approximately 20% of new businesses fail during the first two years of starting operations, 45% during the first five years, and 65% during the first ten years. Only 25% of businesses make it to 15 years or more. Why’s that?
From this industry overview, it’s clear a major reason for failure is their lack of a business plan. This is where an auto repair business plan will help. With the right high-level overview and strategy, determination of how much funding you need, and enough flexibility, your auto repair shop will have a better chance of success. The future becomes much clearer once a business plan is in place to get the ball rolling.
Creating an auto repair business plan
Now that you know why this type of plan is important, it’s time to put pen to paper. Here are some pointers to help your auto repair shop get started:
Step 1: Discover potential at your auto shop
To discover your auto repair shop’s potential, it’s key to establish a ceiling and baseline so you can measure performance.
In the industry, an auto repair shop’s primary revenue producer is billed hours. It’s critical to determine your production capacity because that helps determine the ceiling of your financial plan, Wheeler says. Production hours will drive business potential in terms of revenue and gross projected profit, which ultimately your employees generate. Incorporate this business idea into your auto repair shop’s own business plan and create a more efficient system to generate money.
One of the common elements includes examining relevant benchmarks of other shops of a similar type and size, and their quality work performance.
Step 2: Analyze your auto shop’s current status
Determining the current status of your auto repair shop helps you understand how your shop compares to its potential. This includes analyzing store averages in daily, weekly, and monthly production, revenue, and gross projected profit.
Not only do you want to scrutinize business performance, but also individual performance. This executive summary includes auto mechanics’ average production, service advisor average gross profit, and service advisor billable hours and revenue. Keep these factors in mind when forming the business plan for your auto repair shop.
“This is a good way to effectively establish the baseline in which we’re going to judge performance improvement in those key areas and within our key employees,” Wheeler says.
Step 3: Set goals for your auto shop team
Team involvement remains necessary to achieve individual and store-level goals. “This is where it’s critical to have team involvement and remember the SMART acronym—specific, measurable, achievable, relevant, and timestamp goals,” Wheeler says.
To remain on track with your automotive repair shop business plan, set specific monthly, weekly, and daily goals, both at individual and store levels. It’s important to involve your team in establishing these repair services goals and possess effective ways to measure them.
Step 4: Train and plan for auto shop growth
Training and business planning become critical components of facilitating change. Investing in your team as part of your own plan not only shows you care but allows them to grow in knowledge and skill.
Planning becomes part of the long-term business strategy. While many shops set business plans and goals around needing more car repair services completed, which drives sales, shops should first build the underlying fundamentals for a great customer experience
“We don’t need more cars for the sake of cars,” Wheeler says. “We need more cars to develop long-term loyal customers, and if we don’t have a conversion strategy for those guests, more cars are not going to sustain our growth.”
Step 5: Implement change to grow your auto repair business
A business plan won’t become effective unless it’s put into practice. To do this, good communication and accountability remain key.
“I’ve seen companies develop these great missions and vision statements, only for them to become artwork on the wall,” Wheeler says. “They really don’t have any substance behind them, and they aren’t lived out each day.”
Step 6: Monitor and measure your auto shop’s performance
To measure success, your auto repair shop needs to set relative benchmarks so they can obtain broader insights into the business and performance. This information will help you determine next steps on how to attract customers and generate new business. An excellent way to do this within your automotive repair shop business plan is by investing in auto repair shop software .
While it’s important to monitor and measure repair services goals in your new plan, it’s also important to communicate with your team in daily or weekly meetings.
“What we’re doing in this business plan is essentially establishing the playbook in which you’re going to operate your auto repair business,” Wheeler says. “It’s going to drive the customer engagement system within your shop, so your business plan really should strive to eliminate randomness in your auto repair business. Nothing should happen by accident, everything should be intentional around achieving your objectives.”
Step 7: Adapting to the changing auto repair industry
Your auto repair shop must keep up with the changing dynamics of the automotive repair industry, technology, and customers’ behavior. Within the plan you put together, your auto repair shop must prepare for the electrification of vehicles and equip itself to deal with the latest technology, such as Advanced Driver Assistance Systems (ADAS) . How will your business plan account for these emerging vehicle technologies and the potential customers they draw?
“I understand changing an operating system is painful, but in many cases, it’s going to be necessary,” Wheeler says.
An auto repair shop should consider:
- What could you be doing based on your existing staffing by location?
- A performance dashboard that can provide relevant data at a glance.
- A plan built and owned by the business with discrete actions.
- Standards/goals set for every tech and advisor to measure performance and reward/recognize high achievers.
- Benchmarking against every competing auto repair shop gives you insight into your relative performance and identifies areas to improve.
- Effective technology and systems that ensure great customer experiences.
Your auto repair shop business plan, much like other goals, is only effective and only as good as it’s acted upon, Wheeler points out.
“It’s kind of like Newton’s first law that we all learned in school—objects in motion will remain in motion until acted upon by an external force,” Wheeler says. “In other words, your business will continue on the path that it’s on unless you engage the energy necessary to change that trajectory…If you think you can do better, then I think one of the energy components that you can use, or should consider, is a comprehensive business plan.”
Now that you’ve learned the steps to prepare an auto repair shop business plan and explored several benefits, it’s time to execute on this clear vision and grow your business .
Customers with older vehicles are more likely to need auto repair services. Why is this? For one, older vehicles tend to break down more. Warning signs like check engine lights will appear more frequently, requiring a visit to your shop.
To write a business plan for your auto shop, you will need to:
- Analyze your shop’s current status
- Set SMART goals for your shop team
- Include plans for training and growth
- Prioritize communication and accountability
- Establish and measure performance benchmarks
- Account for evolving industry trends
Auto repair shops’ profitability depends on many factors. But the revenue potential is significant. Nearly one third of surveyed shops in AutoLeap’s 2022 State of the Auto Repair Industry Report generated $1 million or more in 2021 revenue.
Successful promotion helps maintenance shops earn new business. Targeted email marketing and aggressive word-of-mouth outreach are two widely used strategies. Referral programs, organic SEO and active social media presences also help attract new customers.
You can promote your car repair business by:
- Launching social media accounts and posting regularly
- Targeting local search terms with paid marketing
- Sending creative promotional emails to your target customers
- Creating a referral program
- Building up your organic keyword rankings
Auto Repair Shop Management Software
AutoLeap is a powerful all-in-one auto repair shop software that helps to keep complete track of your business – from scheduling appointments to managing technicians and generating invoices.
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What’s Your Path? Designing an Auto Repair Shop Business Plan That Clarifies Your Vision
Mapping out a business plan and investing in a shop management system like Tekmetric will help you help more people in the long run. Find out how in our step-by-step guide.
Mapping out a business plan and investing in a shop management system like Tekmetric will help you help more people in the long run.
Starting a business can be a big risk. But if you map out a plan and execute it right, the outcome is well worth it. Having a solid automotive repair shop business plan in place is especially important if you ever plan on owning multiple shops.
When you realized that you wanted to be a shop owner, it’s likely you considered the good you can do for both yourself and other people. Helping customers get their vehicles back on the road, and helping service advisors and technicians grow in their careers is an exceptionally rewarding aspect of owning and operating a repair shop.
But in order to provide excellent service and help as many people as possible, you'll have to get your plan in place.
In order to make the ride to becoming a successful shop owner a smooth one, your present self will need to have your future self’s back. You’ll need to ensure all of your ducks are in a row. And by ducks, we mean your people, processes, and systems. And most importantly, you’ll need to make sure that you are ready to take on this venture.
You may even get excited thinking about the far future of your business—when it’s feasible to expand your business to include multiple shops. It’s good to dream big, and especially in auto repair, more shops means that you can help more people. But it’s important to understand how you’re going to get there, and what pitfalls to avoid.
Before we jump into how your business can expand, let’s take a look at some of the reasons why new business ventures don’t make it . Don’t let this waiver your goals as a shop owner though. In fact, we’re writing these out so you can beat the odds.
Six Common Reasons Why New Businesses Fail
- Not investigating the market
When you’re opening up a new business, it’s crucial to consider the demand for auto repair and the unmet auto repair needs within the area you plan on opening shop. It’s easier to satisfy a known need rather than creating a need and having to convince your customers.
- Business plan issues
Your business plan is like your company’s Bible. You’ll spend months, or even years, making sure it is the perfect guidebook for your shop. Once your business plan is created, it’s important to follow it. Taking chances that aren’t outlined in your plan could lead to further setbacks. Although setbacks are less common if you’ve carefully and diligently mapped out your plan, there’s always the possibility that your plan isn’t 100% sound. If that’s the case, determine the issue, find a solution, and adjust your plan accordingly.
- Not enough financing
Financial planning is crucial for any new business venture. If you don’t start off with enough money and end up having to stretch the financial line too thin, it’s possible your business may never get off the ground.
- Bad location, absent online presence, and other marketing issues
The location of your business, the online presence of your business, and the marketing efforts conducted throughout your business’ lifecycle are pivotal to your shop’s success. If you start an auto repair shop that focuses on truck repairs in the middle of a city where there aren’t a lot of truck drivers, it’s likely your shop won’t succeed. The same goes for online presence and marketing efforts. You need to reach the people who may not regularly drive by your shop by considering where they spend their time online. What social media channels are they on? How do they use search engines to find local businesses? Tailored advertising efforts and five-star raving reviews will help bring more business to your shop. Without the best location, an established online presence, and the right marketing strategies , your business has less potential to last.
- Becoming complacent
Just because you’ve finished up your business plan and started your business doesn’t mean the research should stop there. It’s always important to remain in-the-know on key market trends. By keeping an eye on the auto repair market, you’ll know exactly when and how you need to make adjustments to your business in order to keep growing.
- Expanding too fast
Sometimes a business owner that is experiencing newfound success may keep reaching and reaching, and reaching, until their finances are drained. While it’s important to have an entrepreneurial spirit, it’s just as important to make smart investments. If you want to open up more shops in the future, it’s important to give your new shop just as much tender love and care as you gave your first location. Make sure you have a solid understanding of where you want your next location to be, who your intended customers are, whether you want to try selling new products or services, and how exactly you plan on testing the success of any new ideas.
According to Investopedia.org , the bottom line is this: “Though the rate of business failure in the first two years is around 20%, it doesn't mean that you have to fail. Through research, planning, and flexibility, you can avoid many of the pitfalls of a new business and be a part of the 25% that make it to 15 years and beyond.”
What Is An Auto Repair Shop Business Plan?
The best way to execute your business is with a plan. An automotive repair shop business plan will outline your auto repair shop business so that you can present it to investors or any other stakeholders that you want to bring along on your business venture. A business plan is the overall vision of your business, the goals you want to achieve, and the roadmap that will keep your company afloat.
Your Auto Repair Shop Business Plan Serves as a Roadmap For Taking Your Business Off The Ground
A clear auto repair shop business plan will provide you with:
- Clarity on what needs to be done
- The ability to spot issues as early as possible while making good investments
- A sustainable and viable business model
Clarity On What Needs To Be Done
An auto repair shop business plan will make it easy for you to explain your business model and where your shop is headed. You’re going to encounter obstacles, and in order to tackle them head on, you need to stick to your strategic plan and adjust accordingly.
Your automotive repair shop business plan will provide you with clarity on:
The Ability To Spot Issues Early While Making Good Investments
To prevent setbacks, you need to invest in the right things. The way you invest prior to opening up your shop, during your business’ lifecycle, and once expansion is on the horizon, will make or break your business.
Your auto repair shop business plan will help you determine the right routes to take when it comes to investing in:
A Sustainable and Viable Business Model
By carefully mapping out your business’ roadmap, you’ll have the ability to achieve a sustainable and viable business model.
Your auto repair shop business plan will help you:
- Secure funding
- Know when and how to expand
- Stick to growth goals and milestones
Each three of these categories can be more attainable with a clear mind. According to Walter Isaacson’s The Book of Jobs , Steve Jobs would often stress that the driving factor behind his creative inspiration was a clear mind through meditation. So, before you get started crafting your quintessential automotive repair shop business plan, try to gift yourself the ability to tune out the noise during important decision-making matters. Here are three ways you can go into your business ownership journey with a clear state of mind:
- Set aside time to commit to a muscle memory activity. A muscle memory activity could be going on a walk every morning with your dogs, heading to the driving range to hit a few golf balls in the evenings, playing an instrument, or picking up a good book.
- Choose an activity that you genuinely enjoy doing and make it a habit. If meditating isn’t for you, you won’t be able to let go of the daily noise and distractions, and in turn you won’t be able to gain clarity of mind. Whatever you choose should be something you look forward to doing so that you can place all of your focus on that activity. Being able to focus is incredibly important for business owners because there are so many things that can occupy your mind in a given moment. Find an activity that helps you organize and become more aware of your thought process.
- Reduce the noise around you by finding an activity that you can do by yourself. Finding an activity that helps you clear your mind and step away from others’ input will help you get back in tune with where you really want your business to go.
These are just three tips. What works for one person may not work for you. Our primary recommendation for new business owners is to commit to not only working on your auto repair shop business plan but also commit to working on yourself so that when you hit the road, you’re able to face any and all obstacles with a clear, open mind.
“If you want to be a better leader, you have to become a better learner.” - Judi Haglin Read more about how Judi Haglin leads a successful auto repair business.
So, What’s Included in an Auto Repair Shop Business Plan?
There are nine steps to crafting the quintessential automotive repair shop business plan that will help you achieve your business goals—from owning one auto repair shop to becoming a multi-shop owner.
1. Write an executive summary
2. Describe your shop
3. State your business goals
4. Describe your products and services
5. Do your market research
6. Outline your marketing and sales plan
7. Perform a business financial analysis
8. Make financial projections
9. Create a plan for growth and expansion
Sure, those nine steps may sound tedious, but it pays to plan. According to entrepreneur masterminds Francis J. Greene and Christian Hopp , high-growth oriented entrepreneurs are 7% more likely to plan out their business. Furthermore, entrepreneurs who write business plans are 16% more likely to achieve viability than entrepreneurs who don’t develop a plan.
What Do You Need to Create Your Auto Repair Shop Business Plan?
You can build a successful launching pad for your auto repair business by conducting market research, developing a marketing plan for your auto repair shop, and evaluating the operational costs and investments you will need to make.
Conduct market research
Here are four steps you can follow to successfully conduct local market research:
- Determine your shop’s market area
- Create a profile of your shop’s ideal customers
- Determine the size of your market (pro-tip: check out City-Data for a detailed, informative profile of your target market).
- Find out how many competitors are in your target market area
Remember that drivers are typically willing to drive a few miles to get their vehicle serviced, but driving over 10 miles might not be realistic for someone if their vehicle has an issue. So you may want to start looking at the demographics within a 10 mile radius of your auto repair shop.
When looking at your target area, you can ask the following questions to get a good sense of your business’ market:
- Is there a desire for your products or services?
- How many people would be interested in your offering?
- What is the income range and employment rate of your customers?
- How many similar options are already available to consumers in your area?
- How much do potential customers pay for these alternatives?
Even after you open shop, keep conducting market research. You want to be able to keep up with the latest auto repair industry trends so that your shop’s profits keep growing. Getting a feel for the type of customers your shop serves will set a strong foundation for your auto repair shop business plan.
Develop a marketing plan for your auto repair shop
Once you know your audience, develop a marketing plan that aligns your vision with the people you plan on serving. Here’s an overview of marketing strategies you can use to attract customers to your new shop:
- Get involved in your community
- Run special promotions for first-time customers
- Partner up with an adjacent local business like a body shop
- Advertise locally
- Run targeted social media ad campaigns
- Up your shop’s search engine optimization (SEO) game
Evaluate operational costs and investments
When it comes to successfully launching your business, you’ll need to weigh any potential costs and investments that you intend on making. Always leave a bit of wiggle room for unexpected expenses, like hiring one more person that you anticipated, or paying a little extra for a more reliable shop management system. Sometimes spending a little extra means getting a higher return on investment, making it well worth the cost. But you have to ensure that you have the wiggle room first.
The investments you put into your shop at the beginning will play a huge role in determining how profitable your auto repair shop will be in the future . You’ll want to evaluate:
- The location you will operate your shop from
- The equipment you will invest in
- The shop management system that will support you from day one and beyond
The right shop management system will give you and your team: - The ability to gain experience - A methodical system for analysis - Digital tools and integrations - Guardrails that prevent errors - The ability to track declined jobs - Better compliance standards - A workflow to quickly build accurate estimates - A direct tie to all shop systems - The capacity to set and reach profit goals - A clear framework for enhancing customer experience
But before we get too excited about finding the right shop management system, here’s the moment you’ve been waiting for: the nine steps you can take to craft an automotive repair shop business plan that will help you reach new heights and open up more shops in the future.
1. Write An Executive Summary
Your business plan’s executive summary is designed to capture any investors’ or stakeholders’ attention. It gives them an overview of your shop’s business opportunities and an overview of the rest of your auto repair shop business plan.
In your executive summary, you will briefly explain the problem you are solving, your business ideas, the target audience, and any key financial information. Your business plan’s executive summary should capture each of the aforementioned topics in no more than two pages .
The problem statement: this introduces the reader to the gap and/or problem in the auto repair industry that your business aims to solve.
The business statement (aka your business model): this will show the reader exactly how you plan to tackle the problem—both how you plan to approach the problem and how you plan to solve it. During this section, you want to briefly explain how your auto repair business will help solve whatever problem you found in the market.
The target audience statement: during this section, you’ll map out any customer demographic details and how you plan on targeting these audiences.
The financial plan summary: any financial institution or investor you approach will want to know how you plan on spending their funds. During this section of the executive summary, you want to cover where you plan on allocating funds and any applicable financial projections.
Find a Shop Management System That Will Make Tracking Your Shop’s Financial History a Breeze For those of you who are current shop owners and want to craft a new automotive repair shop business plan, the financial plan in your executive summary will have to include a history of your shop’s past financial performance. With Tekmetric, you can use accurate, real-time data to easily track how money flows through your shop. Tekmetric’s Real-Time Financial Reports include three reports that are particularly useful during this step of your auto repair shop business plan: 1. End of Day Report The End of Day Report is an overview of how effectively your shop has been selling repair work during a given time range. You can select what time range you want to view a financial report for. The End of Day Report breaks down your shop’s overall shop metrics, including Total RO’s, Hours Presented, Hours Sold, Close Ratio, Effective Labor Rate, Average Repair Order (ARO) Sales, ARO Profit, ARO Profit Margin, Gross Sales, and Gross Profit. 2. Profit Details Report The Profit Details Report will show you the exact profit you’ve made across all of your shop’s ROs. A perk to the Profit Details Report is that you can also break it down even further to show the profit your shop has made within individual ROs. 3. Sales Details Report The Sales Details Report will show you how much your shop has sold in parts and labor over a given time range, how much money has been collected from sublets, fees, and taxes, as well as the dollar amount of the discount your shop has provided to customers.
2. describe your shop.
What makes your business stand out? What’s your company’s mission? What are the most important aspects of your business? These are the questions this section of your auto repair shop business plan will answer.
When determining your shop’s mission statement, try to keep the following tips in mind:
- Make it a long-term mission statement
- Think big picture and high level
- Keep it short and concise
- Use “Our” and “We” when writing your mission statement. For example, “We provide the highest quality repair services to the drivers of East Omaha, Nebraska”
- Work with your potential stakeholders and/or employees to come up with your mission statement
- Don’t be afraid to change it
Let’s take a look at ten popular mission statements. If you can think of the company’s name, then their mission statement did its job.
- “To bring inspiration and innovation to every athlete in the world.*
*If you have a body, you are an athlete.”
- “To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.”
- “To inspire humanity—both in the air and on the ground.”
- “To accelerate the world's transition to sustainable energy.”
- “Spread ideas.”
- “To give everyone the power to create and share ideas and information instantly, without barriers.”
- “To organize the world’s information and make it universally accessible and useful.”
- “We save people money so they can live better.”
- “To be a company that inspires and fulfills your curiosity.”
- “To build and deliver an integrated set of digital tools that complement one another and empower shop owners to grow a thriving automotive repair business.”
In order from top to bottom, the mission statements belong to Nike, Warby Parker, JetBlue, Tesla, TED, Twitter, Google, Walmart, Sony, and Tekmetric.
What do each of the above mission statements have in common? They uncover the primary existence for each company, and they deliver their purpose and overall intention.
As you’re developing your automotive repair shop business plan, think of ways your auto shop can stand out in your community. If you want a good example, check out our Shop Spotlight of Turbo Tim’s Anything Automotive . Turbo Tim’s shop owner Tim Suggs crafted his shop around a unique and relatable culture that gives back to the community. Their focus is on “average cars, average people.”
“Early on, it was apparent that if I put people first, the money would come. I focused on building an atmosphere that was both fun and professional for employees and customers alike. One of the most instrumental, yet unintentional, parts of our culture came from a cat I found at a machine shop. I’ve always been a cat person, and I asked the technicians there if that was their cat. They said it was a stray that they regularly fed. After checking that he wasn’t microchipped and didn’t belong to anyone, I brought him home with me.
And that’s the origin story of Bobby, our original shop cat. We now have multiple cats who greet folks in our waiting room. Bobby also positively affected our marketing. Halfway through our growth, we began branding ourselves with a cat logo inspired by Bobby. Today, customers who put Bobby bumper stickers on their cars get 10% off for life. Less productive are our chickens, who ‘work’ in the chicken coop on our outdoor patio.”
When you describe your company in your auto repair shop business plan, you want to unveil what you see your shop being. Yes, you’ll want to mention the mission, but you also want to capture your shop’s values and culture, and what sets your shop apart from the rest.
Invest In a Shop Management System That Allows Room For Integrations Tekmetric partners with other industry-leading solutions to let shop owners fine-tune the repair experience for their team and their customers. - We partner with Mechanic Advisor to bring your customers’ real-time scheduling - We partner with Shop Owner Coach to bring your shop personalized coaching and training - We partner with Advance Auto Parts so that your team can easily find a good deal on a wide selection of parts - We partner with BG Products, Inc. so that you easily provide high-quality maintenance to customers - We partner with MyShopManager to ensure your shop’s marketing communication leads to higher customer engagement - And that’s just five out of 30+ integration partners your shop can choose from. See how the right mix of automotive computer programs fuels business innovation.
3. state your business goals.
The next section of your auto repair shop business plan is where you should state your business goals. Here you’ll want to list out the short-term, medium-term, and long-term goals that you want to achieve with your business.
- Short-term business goals: these business goals are to be accomplished in no more than one year.
- Medium-term business goals: these business goals should be completed in more than one year, but less than five years.
- Long-term business goals: these business goals are what you want to accomplish in five years and beyond.
As you’re coming up with your shop’s goals, you need to make sure that they are realistic, attainable, and strategic. Ask yourself these six questions as you come up with your business goals:
- Why is this goal important?
- Can we achieve this goal?
- What can impede or stop us from achieving this goal?
- If we set this goal, what are the action steps?
- If we meet this goal, how do we take it to the next level?
- If we don’t meet this goal, how do we rebound?
Now that you have those six guiding questions, you can start to come up with your shop’s unique business goals. Ask yourself the following questions to help you come up with your company goals:
- Why do we do what we do?
- Where do I see my business this year, next year, and five years from now?
- What are we selling beyond auto repair?
- How do we feel about the problems we solve?
- What values do we want to stand by no matter how big we grow?
- What do our customers want?
- Which promises do we want to make? Which promises can we keep? (Only make promises that you know that you can keep)
- What do we need to do today to make sure that we can keep doing the things we want to do tomorrow?
Whether your goal is to have a 20% profit margin year one or open up a second location in the next five years, the business goals section in your automotive repair shop business plan will help you remember why you set that goal in the first place.
Choose a Shop Management System That Makes it Easy to Reach Your Goals If your goal is to increase your sales and ARO, then you’ll like Tekmetric’s Digital Vehicle Inspection (DVI) feature. Tekmetric’s DVIs are designed to inform and show your customers exactly what’s going on under the hood. And the better you can explain vehicle issues, the more likely your customers will be on board with getting the recommended repair work done. Tekmetric’s DVIs include six core features that will benefit both your team and your customers: 1. A searchable DVI history 2. The ability for technicians to attach photos and videos to inspections 3. A color-coded system that indicates the severity of inspection findings 4. A direct tie-in to parts and labor data when building estimates 5. The ability to add canned jobs when building estimates 6. Digital authorization for jobs 7. A declined jobs report that automatically saves and tracks declined jobs See what else Tekmetric’s DVIs can do for your shop.
4. describe your products and services.
In the products and services section of your auto repair shop business plan, it’s important to focus on your customers’ perspective and needs. The overall goal of the products and services section is to prove that your shop will fill a market need and remain viable.
Here are some questions you’ll want to answer in this section:
What kind of vehicles will your shop fix?
Do you want to run a general auto repair shop or a specialty auto repair shop? You can determine whether your shop will focus on exotic vehicle repairs, diesel engine repairs, fleet work, or stick with the standard independent garage clientele.
What type of services will your shop provide?
Along with determining the kinds of vehicles you’ll service, you’ll also want to consider each service your shop will provide. Will your main focus be on oil changes, tune-ups, and regular maintenance? Will you want to sublet some of your repair work? It could be that you focus on standard repairs, but when a customer comes in with a specific job that you don’t want to turn down, you can have that repair work done through a subcontractor, but you’d have to establish that partnership .
How will your shop’s name and brand clarify your audience and services?
Your shop’s main focus may be something you’ve already thought of, but what about your shop’s name? It’s a good idea to choose a name that speaks to your shop’s target customers and the types of services you provide. For example, Bavarian Motor Repairs specializes in servicing BMWs, MINIs, and Rolls Royces. Performance Transmission & A/C Automotive Repair specializes in servicing transmission or A/C related malfunctions. Or maybe you want your shop to cater to everything auto repair related like Ultimate Auto Repair or Turbo Tim’s Anything Automotive.
What types of products will your shop provide?
Knowing the types of vehicles and services your shop will provide to customers is great, but what about the types of products you plan to sell to your customers? Many shops choose to sell specific types of fluids that their customers can rely on. Similarly, shop owners may sell products and equipment that can make their customers’ vehicles last longer and perform better. You can also offer products that make for an easy upsell such as air fresheners, floor mats, or even merchandise with your shop’s logo on it.
Find a Shop Management System That Expedites The Parts Purchasing Process Tekmetric’s Canned Jobs Board pulls from inventory to see what parts you already have on hand and what parts you need to purchase. You can also set a parts markup on inventory items that are added to canned jobs so that you can lock in your parts margin. This addition to your parts management strategy will cut out all the guesswork and streamline jobs. Your team can save time sorting through parts and spend it actually repairing vehicles and providing excellent customer service. In Tekmetric, you can view and sort canned jobs by: - Job titles - Job totals - Job category - Labor Rate To make your parts purchasing experience even easier, Tekmetric has partnered with some of the most trusted parts vendors in the industry: - AdvancePro - MyPlace4Parts - Nexpart - OEC Repair Link - PartsTech - WORLDPAC
5. do your market research.
You probably did some market research when you first began forming your business plan. But as you write this section, you’ll really want to sharpen your market research and organize your findings.
There are two main types of market research that you can do when planning your business.
Primary Market Research: any type of research that you collect yourself. Examples include surveys, interviews, and observations.
Secondary Market Research: any type of research that involves compiling existing data. Examples include searching websites, going to libraries, looking at government statistics, or even using internal resources like your shop’s average revenue per sale, customer retention rates, and any other historical data you see fit (this is especially useful for current shop owners looking to expand).
To successfully conduct market research, you should follow these fives steps:
- Determine the purpose of your market research
Before starting your market research, determine your goal for doing it in the first place (aside from creating the business plan, of course). Common reasons why business owners conduct market research include wanting to understand a new market or to gauge the success and strategies of competitors.
- Research the current state of the auto repair industry
Look at where the auto repair industry currently is and where it seems to be heading. The goal here is to determine any potential trends and projected growth that can give your business a competitive edge in the auto repair industry. Check out Ratchet+Wrench for the latest auto care insights, or the Tekmetric Index (TM-500) for economical trends from 500 auto repair shops across North America and Canada.
- Define your buyers’ personas, aka “marketing personas”
Creating buyer personas will help you understand who your customers are. Your buyer personas should include age, gender, location, job titles, family sizes, incomes, needs, interests, etc. Keep in mind that as you build out your buyer personas, you don’t have to limit yourself to just one persona. There are many different types of drivers and people that need auto repair services.
There are many useful tools you can use to develop your personas. Here is HubSpot’s free tool that might come in handy while you’re building your personas.
- Understand your competition
To understand your competition, we recommend listing out each of your shop’s competitors. From there, determine what those shops do differently from what you plan to do. Consider their strengths and weaknesses, and any advantages they have in the auto repair market in your area. You can also do a SWOT analysis where you determine their strengths, weaknesses, opportunities, and threats. It’s also good to do a SWOT analysis of your own business, too.
- Gather, analyze, and summarize your findings
Any information you find during your market research will be your friend. You can never have too much data—as long as it’s from a credible source. Here are some resources you can use for credible research:
- U.S. Bureau of Labor Statistics
- U.S. Census Bureau
- State and local commerce sites
- Your own SWOT analysis
- Market surveys or questionnaires
When it comes to analyzing your market data, it’s best to organize it all into sections that make the most sense to you, your stakeholders, and your investors. The main topics you want to focus on are your shop’s purpose, the target market, and your competition. Examples of elements within your market research analysis can include your customers’ buying trends, forecasted growth, how much customers are willing to pay for your services, and an industry overlook, including the industry’s size and growth rate.
Invest in a Shop Management System That Tracks Your Customers’ Historical Data Tekmetric’s customer reports help keep your market research fresh. You can see which service you sell is the most popular and who your most frequent customers are. You can also get more accurate data about different customers’ buying behavior when you start generating with Tekmetric’s customer reports. Customer List Report: Tekmetric’s Customer List Report gives you an overview of each customer’s Lifetime Visits, Lifetime Spend, Lifetime Profit, Lifetime ARO, Lifetime Close Ratio and other key stats. Declined Jobs Report: With the Declined Jobs Report, service advisors can see all jobs that have been declined on past ROs so that they can get them back in the shop. Identify which jobs are declined most often so that you can create effective promotional campaigns that upsell, cross-sell and improve your Close Ratio.
6. outline your marketing and sales plan.
After conducting market research and deciding on the products and services your shop will provide, you can work on your marketing strategy. Your marketing strategy should specify how you plan on marketing different services and products to different demographics.
For example, if you decide you want to focus on diagnostics for BMWs, then your marketing plan will show how you plan to target BMW owners for that particular service. Maybe you could go find BMW groups or figure out where BMW owners like to shop or frequent, and advertise there.
A strong marketing and sales strategy will help your shop maximize and leverage profits. Marketing expenses are something you need to invest in, but you also need to ensure that you’re getting a strong return on your marketing investments.
Here are a few examples of impactful marketing strategies:
- Website branding
- Local reviews
- Social media campaigns
- Email marketing
- Content marketing
- Referral program
- Reward program
- Pay-per-click ads
- Print and physical marketing
Whatever marketing efforts you choose to invest in, make sure you track the data so you know what works and what doesn’t.
Choose a Shop Management System That Helps You Refine Your Marketing Strategies A shop management system like Tekmetric can show you whether or not your strategies are working. Marketing Source Report: You can track the payoff that each marketing strategy brings your shop by using Tekmetric’s Marketing Source Report. With the RO Marketing Source Report, you can explore how much of your business comes from new sales or repeat sales, and identify which marketing sources are bringing in the most business. Integrations: Tekmetric integrates with several marketing solutions that will help your shop further grow its customer base. Our marketing integrations include Mechanic Advisor, KUKUI, MyShopManager, MechanicNet, RepairPal, and more.
7. perform a business financial analysis.
In the financial analysis portion of your auto repair shop business plan, you want to unpack how much money your shop will need to get off the ground and exactly how you plan on spending it.
Some common capital and startup expenses include:
- Rent or lease payments
- Utilities costs such as telephone and internet, electricity, heating, etc.
- Maintenance costs such as mending leaks, maintaining equipment, snow plowing, landscaping services, etc.
- Taxes, including state income tax, property tax, payroll tax, sales tax, fuel tax, etc.
- Office equipment such as computers, printers, tablets, desks, chairs, etc.
- Marketing expenses
- License renewals
- Lobby supplies such as water, coffee, snacks, etc.
- Employee appreciation such as gifts, holiday outings, meals, team bonding, etc.
- Ongoing training and education opportunities
Another key component to your financial analysis is your break-even analysis. A break-even analysis is when you factor in both your costs and your shop’s sales to determine the moment you will break even.
This article from Nuvest does a great job explaining how you can calculate the break-even point for your auto repair shop.
So, what is a break-even point? A break-even point is when your business will begin making a revenue that should cover your total amount of overhead costs—both the fixed and variable costs accumulated over time.
Break-Even Point Formula:
(Overhead Costs + Balance Sheet Payments) / Gross Margin = Break-Even Point
For example: ($30,000 + $10,000) / 95% = $42,105.26
In the example above, it concludes that you need to sell a total of $42,105 to make sure that you cover your overhead costs and balance sheet payments.
Choose a Shop Management System That Can Assist in Managing Your Shop’s Common Expenses While Tekmetric can help you track the cost of goods through reports, your accounting tools such as QuickBooks, is where you’ll track a lot of your daily expenses. Tekmetric doesn’t include a built-in accounting system, but we do have an accounting link through one of our integration partners, The Back Office, which gives you the ability to manage your books, track income and expenses, and easily perform audits for all your accounting needs with just a few clicks. Tek-Tip: improve your profits and fine-tune your shop’s goals with Tekmetric’s built-in Parts Matrix and Labor Matrix. Tekmetric makes it easy for shop owners and service advisors to include the right markups on each and every job. “At the end of the day, the world runs on math. If you don't know what the math is, you don't know what you're doing; you have no clue whether you made money or whether you lost money. You're just throwing quotes out there and hoping you make a profit. With Tekmetric, I can see in real time what my markup is, what it's going to be, and what it should be to reach our goals. I can give my service writers a bottom dollar: what they need to sell it for. And they can quickly see all that right in Tekmetric.” - Karl Roekle, Owner of Ultimate Auto Repair
According to Entrepreneur.com , here are some ways you can make financial forecasts more realistic:
- Use at least two financial projection scenarios. One can be more optimistic and the other can be more cautious. It’s best to err on the side of caution while also making space for the optimistic predictive forecasts that new and aspiring business owners are prone to make.
- Predict your expenses first, then your revenues.
- Identify and include assumptions that are outside of your control, including how much you predict the market will grow, any possible changes in the competitors you’ve found, and any advancements in technology that could impact your business.
- Assess, reassess, and reassess again. Forecasts shouldn’t be stagnant. The more up-to-date your forecasts are, the more prepared you will be to make informed strategic decisions.
Invest in a Shop Management System That Lets You Categorize Reports into Different Time Periods Tekmetric’s real-time reports empower shop owners to forecast and strategize by choosing between annual and weekly forecasting. Annual Forecasting: With annual forecasting, you can get a sense of where your shop is at and how the rest of the year is likely to play out. If you notice that business is slowing down month to month, it might be time to adjust your marketing strategies. Or maybe you notice that the year has been busier than usual, in which case you may want to consider bringing on more talent to help service your new influx of customers. Weekly Forecasting: With weekly forecasting, you can combine sales in progress with closed sales data to get an idea of how much profit your shop is lined up to make by the end of the week. Read more about how you can forecast with real-time reports .
9. create a plan for growth and expansion .
Although this section isn’t necessarily a part of a standard business plan, you’ll want to incorporate it into your automotive repair shop business plan if you eventually want to open additional repair shops.
To prepare yourself for future growth, you’ll want to ensure that 1) the auto repair shop business plan you’re creating now can be replicated if all goes according to plan and 2) the shop management system you select can grow with you.
If you play your cards right—or in this case, you craft the optimal automotive repair shop business plan and invest in foundational tools—you’ll be well on your way to becoming a successful owner of multiple auto repair businesses.
Tekmetric: Your Shop’s Go-To System For Present-Day Planning and Future Expansion
Just as your automotive repair shop business plan will help you navigate any potential setbacks, the Tekmetric shop management system will help you hammer away as you grow your business.
The right planning and shop management system will help you determine—in advance—things that can help you achieve your goals, as well as avoid things that can potentially prevent you from achieving those goals.
Tekmetric will:
- Make tracking your shops’ financial history a breeze
- Allow room for integrations
- Make reaching goals easier
- Expedite the parts purchasing process
- Help you track your customers’ historical data
- Help you refine marketing strategies
- Assist in managing your shop’s common expenses
- Empower you to make financial decisions for future growth
Let’s Recap… To successfully create your auto repair shop business plan, you need to: 1. Conduct market research 2. Develop a marketing plan for your auto repair shop 3. Evaluate operational costs and investments The 9 steps to crafting an auto repair shop business plan are: - Write an executive summary - Describe your company - State your business goals - Describe your products and services - Do your market research - Outline your marketing and sales plan - Perform a business financial analysis - Make financial projections - Create a plan for growth and expansion
Not only will investing time into planning help your vision come to fruition, but it will also help you achieve the dream you stood by since day one: helping your customers get their vehicles back on the road safely.
Mapping out an auto repair shop business plan and investing in a shop management system like Tekmetric will help you help more people in the long run.
Make Your Vision a Reality With a Clear Business Plan and a Supportive Shop Management System
At Tekmetric, we don’t mess around. We know how hard you’ve worked to get to where you are now—no matter where you’re at on your repair shop owner journey. So, when we say we’ll help you unleash your potential, we mean it.
Get To Know Us
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How to write a stellar business plan for an auto repair shop
Are you passionate about fixing cars and restoring them to their former glory? If so, you may have been dreaming about setting up your very own car garage for some time. Before fully taking the plunge, however, you'll need a tailor-made business plan.
To guide you through this process, we've written the guide below to offer our top tips for making your auto repair shop business plan a reality.
On the menu:
- Why do you need a business plan?
- What type of auto repair shop should I open?
- What do you need to create your auto repair shop business plan?
- What is the financial forecast for an auto repair shop?
- What does the written part of an auto repair shop business plan look like?
- What tool should I use to write my business plan?
- Business plan template of an auto repair shop.
- Three things you should know before writing an auto repair shop business plan
1. Why do you need an auto repair shop business plan?
Did you know that 60% of all new businesses in the UK are likely to cease trading within their first three years? Durham City Incubator believes that a "lack of business planning" is the number one reason for the failure rate being so high.
Writing out an auto repair shop business plan is, therefore, essential for your new business.
An auto repair shop business plan allows you to identify the level of initial financing that is required. It also helps you:
- Anticipate any potential cash flow problems along the way
- Estimate how much profit your business is likely to make, within its first three to five years of trading
- Obtain financing from the bank - Small Biz Trends concludes that you are twice as likely to secure funding if you have a business plan
2. What type of auto repair shop should I open?
According to A Plus Auto Glass, there are multiple types of auto repair shops that you could open:
Auto repair service technicians
This is perhaps the most standardized service from the lot. It entails basic checks such as oil fluid levels and electricals.
You'll likely receive several repeat customers if you choose this model (especially those who drive a considerable amount) because servicing a car is recommended every 12 months or 10,000-12,000 miles (whichever comes first)!
Diagnostic technicians
This model is slightly more specialized. Such technicians carry out skilled checks that underline any issues vehicles might have.
It requires a higher level of skill because these issues cannot be seen on the vehicle's surface.
Auto system expert
If you choose to offer this model, you will specialize in surveying key systems that the vehicle has.
Engines, brakes and gear sets are all critical systems in most vehicles.
This business model has the potential to earn you high revenue.
Auto body repair clinic
This clinic or repair centre deals with vehicles that have been involved in accidents or roadside crashes.
If you choose this model, you may not have the volume of customers that the previous models may have but the revenue per sale is likely to be much higher.
You'll repair and retouch cars to ensure that they look as good as new and that any scratches or broken parts are fixed.
Auto repair painters
If you choose this model, you will repaint vehicles or add touches to them.
Vehicles often need a fresh layer of paint, especially if they are being driven in areas where there is a lot of environmental pollution.
Expert auto glass repair
This model offers customers the chance to repair their windshield, windows or any other glass-related parts from their vehicle.
You'll likely require a high level of skill to do so but the rewards can be exponential, earnings wise.
You might also receive several clients who just want to repair small cracks in their vehicles.
3. What do you need to create your auto repair shop business plan?
Before writing your auto repair shop business plan and creating the financial forecast for your auto repair shop, you must first gather the data needed to create a comprehensive business plan.
You'll achieve this by...
- Carrying out market research for your auto repair shop
- Building your marketing plan
- Evaluating the operational costs and investments involved in setting up your business
Conducting market research for an auto repair shop
This is the longest and, admittedly, most tedious step in creating an auto repair shop business plan, but once you've got the right method - there's no excuse for mistakes.
As you move through the market research, you'll develop an understanding of the needs of your target market, as well as the current state of the industry.
This enables you to then determine hot industry trends and identify where you should position yourself within the market to make your auto repair shop a success.
Should your auto repair shop provide in-depth expertise on electronics, for example, or should it focus instead on motorcycle repairs or the sale of spare parts?
You must also assess the area in which you want to place your auto repair shop. This will give you a better idea of the local market, including the needs of residents and what services competitors are already offering.
Developing the marketing plan for your auto repair shop
Once the market research is completed, the next step is setting out the marketing strategy for your auto repair shop's business plan.
This is an opportunity to identify how you'll get your name out on the market and stand out from your competitors.
There are many ways of promoting an auto repair shop, from setting up a website and social media network to paid newspaper advertising and handing out street flyers.
Taking the time to decide which marketing actions you want to go for will help you determine how much money you need to set aside for each one and how many customers you can expect, which you can then factor into your financial forecast later on.
Evaluating operational costs and investments
To keep an auto repair shop running smoothly, you need a team you can count on. Typically, the size of a small car garage team is around 3 to 4 employees. You'll need a receptionist to welcome customers and at least two employees with experience in car mechanics - with the salary of each staff member being allocated according to their qualifications.
Additionally, you'll need a lot of technical equipment to get an auto repair shop up and running. Repairing vehicles requires having the right tools, as well as a full stock of car parts to help you meet the diverse demands of each car owner.
To get an exact figure for the price of each item, you'll need to contact suppliers and ask them for quotes to integrate in your business plan for an auto repair shop. These quotes will then be integrated into the financial forecast.
4. What is the financial forecast for an auto repair shop?
Establishing the financial forecast is an integral step in the development of your auto repair shop's business plan.
It is composed of 4 main tables, highlighting different financial aspects of the company:
- Projected profit and loss statement
- Projected balance sheet
- Projected cash flow statement
- Initial financing plan
The projected P&L of your auto repair shop
This table, which starts with the turnover, allows you to evaluate the growth, evolution of the cost structure of your auto repair shop, and its expected profitability over the coming years.
The projected balance sheet of your auto repair shop
This table shows the value of the company's assets at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc.).
The projected cash flow statement
This table is essential in helping you keep an eye on the company's cash flow, particularly to ensure that the company generates enough cash to be able to repay its loans and regularly renew equipment.
The initial financing plan
This table gives your bank or potential investor a quick overview of the resources needed to launch your auto repair shop and their costs - as well as the personal contribution you plan to make.
5. What does the written part of an auto repair shop business plan look like?
This part cannot be neglected. To be able to interpret your figures and judge the relevance of the assumptions used to build your forecast, it's necessary to have sufficient details about the project.
The editorial part of your business plan is made up of the following sections:
The executive summary
The executive summary for your auto repair shop's business plan is the equivalent of a cover letter for your auto repair shop business plan.
The aim here is to introduce your business project to investors in as engaging and concise a way as possible, encouraging them to read on and learn more about your exciting venture.
In this part, you place a spotlight on the business's partners and their roles, as well as the distribution of the company's capital and the location of the auto repair shop.
Be sure to mention who the business is managed by and the percentage of ownership that each partner possesses.
In terms of the management team, you should list any relevant experience that staff or managers hold, along with any qualifications achieved.
Products and services
This section explains the products and services offered by your auto repair shop.
For example, if you choose a traditional auto repair shop model, this section could look something like this:
Change of oil
As part of our routine maintenance, we recommend that you carry out this service each time you visit our garage (provided it's within a reasonable time frame).
Brake repairs
This includes inspecting the brake pads or checking how smooth the brakes are on your vehicle. Again, this is part of our routine maintenance.
Full diagnosis
This service includes both of the above and as well as other aspects such as headlights and coolant/fluid levels.
Market research
It's within this section that you'll present the results of the market research we mentioned at the beginning of this article.
The objective here is to demonstrate that there is indeed a viable business opportunity for a new garage in the area you've chosen.
Mention why you have a unique selling point over other auto repair shops and how your skill set helps you in this regard.
In this part, you'll reveal three key plans for your auto repair shop business plan:
- Your pricing strategy- the prices you'll set for your services / spare parts / new parts
- Your marketing strategy - the actions you'll take to attract customers and build customer loyalty
- Your risk management strategy - how you'll minimise the risks related to your business
The operational part
From your employees to your relationship with suppliers, you'll detail the operational organisation of your business within your auto repair shop business plan.
It's important to mention what suppliers you'll be using to source your spare parts and equipment from. You might have few or many suppliers, depending on your concept.
Also, think about the payment terms that you might obtain with them. Are you a new business? If so, you may need to pay upfront.
The financial plan
The financial plan puts your numbers into tables that you'll be able to present to potential investors so they get a better idea as to your expected profitability and how much funding you need.
6. What tool should I use to write my business plan?
We've established that to set up your auto repair shop, you need a business plan. What you may not know yet, however, is how you'd like to write it. There are three options available to you:
Write your business plan using Word or Excel
This solution has one major advantage: it's cheap.
Be wary, however, that you'll need to have an accounting background (or at least be very good with numbers) to write your plan in this way without making mistakes in the calculations.
Hiring a consultant to write your financial forecast
Hiring a chartered accountant or consultant to take care of the financial part of your business is a good way to avoid errors.
However, the fees are generally quite expensive: budget around £1.5k ($2.0k) for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).
Using online business plan software for your auto repair shop's business plan
If you're not used to writing business plans, another good solution would be to use our online business plan software .
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by signing up to The Business Plan Shop today .
7. Business plan template of an auto repair shop.
A business plan template will give you a better understanding of how to frame your own business plan, as well as what investors are looking for.
Our auto repair shop business plan template will be off great help to you!
8. Three things you should know before writing an auto repair shop business plan
Firstly, make a list of the potential risks that your auto repair shop could face. This could include both external and internal factors. Think about how you might deal with them efficiently.
Secondly, consider trends that are currently high-flying in the auto repair industry. For example, auto parts are being replaced much less frequently thanks to advanced technology resulting in greater durability.
Thirdly, the same study also believes that there is a shortage in the number of skilled automobile technicians. This is because several experienced workers have now retired or moved on from the industry.
That's it for now, we hope this article has helped you better understand how to write an auto repair shop plan. If you have any questions related to setting up your business, please do not hesitate to contact us.
Also on The Business Plan Shop
- How to take open a juice bar
- How to carry out market research for a coffee shop
- Business plan vs budget: what's the difference?
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Home » Business ideas » Automotive Industry » Auto Repair & Services
How to Write a Car Service Center Business Plan [Sample Template]
Are you about starting a car service center? If YES, here is a complete sample car service center business plan template & feasibility report you can use for FREE . Okay, so we have considered all the requirements for starting a car service center. We also took it further by analyzing and drafting a sample car service center marketing plan template backed up by actionable guerrilla marketing ideas for car service centers. So let’s proceed to the business planning section.
Why Start a Car Service Center?
If you are interested in starting your own car service centre, it can never be a better time since the market for mechanics is currently showing significant and promising profit gains. We all know that most drivers in the industry now have cars that are at least 10 years old, which means that the need for a car servicer is growing for more consumers in the industry. It is very important to note that beginning your own car service centre can guarantee or rather give you adequate control over your own hours and allow you to enjoy the advantage of being your own boss.
If you enjoy working on automobiles, then starting a car service centre might be what you’re looking for to remain relevant and enjoy your steady income. However, the automobile industry has its own economics and is changing with each coming day with the advent of technology. For example, recycling oil is one way automotive dealers, manufacturers and repair shops are helping to preserve the environment.
Additionally, cars are being manufactured to run more efficiently and control emissions that affect the air. Therefore, be wise to write a business plan to serve as a commandment for your business, protect and Make sure that you go according to plan.
A Sample Car Service Center Business Plan Template
1. industry overview.
We all can attest to the fact that during the Great Recession of 2008-2010 a lot of people felt that the end of the American automobile industry has finally come like the sun setting in the west. But while that real risk was narrowly avoided for the automobile manufacturing industry, what most individuals don’t or have not understood is the huge industry that arrives after the car is manufactured and sold.
We all know that the automotive aftermarket, as against the sales of new cars, performed very well during that economic recession – and is still booming even after the recession. We all know that these machines call automobiles are complex machines that increasingly include sophisticated computers.
But we also know that the said machines are absolutely essential to the majority of the working population, and are always a point of pride for their owners. They needed by both regular and emergency service, replacement parts, paint, cleaning, stereo system installations and a whole lot more.
It is also crucial to note that the automotive aftermarket provides these parts and services, and massively flourishes during economic uncertainty. Because when individuals aren’t buying new cars they are keeping older cars longer. It is a known fact that the average age of vehicles in the united states is high – and has been climbing steadily over the last several years, and even new cars need regular service but as they get old they need more care and they break down faster than new ones. Service stations and parts retailers both benefit from these particular actions.
It has been estimated that the US automotive aftermarket will be worth $273.4 billion in 2017 – an increase of almost $35 billion in just four years. This we believe puts the aftermarket between 1.5 and 2% of the US Gross Domestic Product. It is also estimated that over 4.3 million individuals work in the industry and growth is expected frequently in the industry.
We believe that the large and growing fleet of vehicles and their high average age will be the key adrenaline pushing the industry forward. It is also known that older cars need more care and an aging and older national fleet is great news for aftermarket providers.
It has been estimated in the industry that the value of the repair/replacement market for vehicles 0-4 years old is $20.7 billion, but the value of the aftermarket for those 8 or more years old is a whopping $77.3 billion.
2. Executive Summary
Fast Repair Auto Car Services (FRACS) is a new start-up car service centre that offers a complete car service and repair as well as a full-featured retail parts store to the good people of New Orleans, Louisiana. We at FRACS hope to give the people of New Orleans our astounding services with four unique and convenient locations.
We at FRACS plan to grow our venture into a business with outstanding sales by year three and also create a substantial clientele base. We at FRACS understand how competitive the market is and how hard it tends to get, but we believe that only us will be offering the unique service we hope to offer.
We also plan to differentiate our business completely from our competitors by not only offering a hassle-free repair service, but a fully stocked parts store and other car related services. We hope that not only will this serve a wide range of customers for both service and parts, but the parts department will support the service department by allowing the service department to turnaround jobs far faster than the competition with generally all of the needed parts in stock and on location.
We at FRACS plan to also differentiate our astounding business by having 12 bays at every location we establish. We believe that this will offer incredible value to customers who need their cars fixed right away. We at FRACS do not entertain the idea of wait for service and parts.
We also hope to offer our clients unlimited shuttle service for repair which will make the entire service experience as painless and convenient as possible. We at FRACS will also attract and maintain a loyal customer base through our customer-oriented focus on business.
We also want to make it known that all our employees are trained and held In charge of providing superior service, building a long lasting trust bond with clients. Because we believe it is very important in the car service centre industry.
3. Our Products and Services
We believe that we have the core competencies within our large workforce to work on all makes and models of domestic and foreign vehicles brought to our service centre. We believe that with twelve service bays at each location, and all our employees dedicated to offer superior customer service, we will be known as the solution to any car problem.
We will always strive to be accurate and honest with customers in terms of quoting cost estimates and repair completion time estimates in order to gain their trust and acceptance. We believe that our employees will always focus on delivering what they promise to our customers at any expected time.
FRACS is dedicated to build a lasting strong customer relationships based on trust and integrity, which we believe will be the catalyst in establishing a strong regular customer base in the industry. FRACS hopes to offer these various kinds of services:
- Mechanical job like engine , gear, accelerator, shock-absorber etc.
- Electrical job like horn, light etc.
- Car air conditioner service
- Wheel balancing and alignment
- Sell of car parts and accessories
- Several oil change service like engine oil, gear oil, steering oil etc.
- Car body repair service like painting and denting
- Battery service
- Car body polish service
4. Our Mission and Vision Statement
- Our vision at FRACS is to build a standard and world class car service centre with breath taking services and brand that will serve not only the good people of New Orleans, but the United States of America.
- Our mission at FRACS is to offer high-quality car services and a full range of auto parts to our prospective customers. We at FRACS hope to focus on personalized service channelled to our customers by offering convenience and rapid service which will make us the leading figure in the market.
We at FRACS believe that we are technologically savvy with computerized monitoring of all parts inventory, to make sure that parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. We at FRACS can also boost of having a strong vendor relationships with the most service conscious vendors who can go to the limit in order to ship major parts rapidly to us.
Our Business Structure
FRACS believe that we have a strong management team that will allow us to actualize and execute our goals and visions. It is very important to note that FRACS have four founding partners, Ernest Brighton, Donald Meth, Wesley Shinuf, and Luke Chin. Ernest Brighton has a background of sales, 15 years of working with Chevrolet.
We believe he will be in charge of the sales and marketing for FRACS. Donald’s core experience is from the management from Advent motors where he was a Vice President in charge a department of 306workers. Wesley is also a product of the auto industry, specifically the car service industry. He spent 8 years at Nino palmers Dealers and then 6 years at Toyota .
He enjoys and participated in multiple roles within the business allowing him to bring to credit FRACS with multiple skills and experience. However, Luke Chin popularly known as the Oracle of Shanghai brings an astounding 15 years of finance, investment and administration experience to FRACS. Luke was trained in China but later established Chin transcorp, a real estate firm based in Louisiana. He is also known for his unique eye for investment and proper business management.
FRACS believes that our business is an exciting business opportunity that settles the huge need of having a full car service centre that also has a complete retail parts centre. We believe that these distinct services will have benchmarked customer service, something that the industry is not known for having.
We at FRACS believe that our business will be led by a seasoned management team comprising of our four founding partners and other employed workforce, all of whom have extensive industry experience to push us to the top. The portfolios include:
Chief Executive Officer
Service Supervisor
Human Resources and Admin Manager
- Sales and Marketing Executive
- Car Service Engineers / Technicians (12)
- Car wash Attendant
Client Service Executive
5. Job Roles and Responsibilities
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counselling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- In charge of providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- In charge of signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Serves as project manager of the organization; works directly with employees
- Develops strategic plan by studying new automobile technological, and financial opportunities; presenting assumptions; recommending objectives.
- Accomplishes subsidiary objectives by establishing plans, budgets, and results measurements; allocating resources; reviewing progress; making mid-course corrections.
- Coordinates efforts by establishing procurement, production, marketing, field, and technical services policies and practices; coordinating actions with corporate staff.
- Builds company image by collaborating with customers, government, community organizations, and employees; enforcing ethical business practices.
- Maintains quality service by establishing and enforcing organization standards.
- Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies.
- Makes certain that the auto repair and maintenance department perform efficiently, coordinate employee efforts, and facilitate communications between management and computer repairs and maintenance engineers and technicians
- Make sure that the organization works in line with international best practices.
- In charge of overseeing the smooth running of HR and administrative tasks for the organization
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- In charge of training, evaluation and assessment of employees
- In charge of arranging travel, meetings and appointments
- Oversees the smooth running of the daily office and factory activities.
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyse the volumes of transactional data generated by customer
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Writes winning proposal documents, negotiate fees and rates in line with organizations’ policy
- In charge of handling business research, market surveys and feasibility studies for clients
- In charge of supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Creates new markets cum businesses for the organization
- Empowers and motivates the sales team to meet and surpass agreed targets
Accountant / Cashier
- In charge of preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyses financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- In charge of financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- In charge of developing and managing financial systems and policies
- In charge of administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the business
- Serves as internal auditor for the business
Car Service Engineers and Technicians (12}
- Repairs and replaces automotive engines
- Performing general automotive repairs
- Handles Power train repair services
- Handles Brake repair services
- Scheduled and preventative repair and maintenance services
- Repairs trucks
- Keeps and swaps automotive exhaust systems
- Maintains and replaces mufflers
- In charge of car body maintenance and repair
- Maintains automotive transmissions
- Repairs automotive brakes
- Implements automotive electric repairs
- Implements automotive wheel alignments
- Repairs automotive radiators
- Handles wheel alignment and repair services
- Handles other repair and maintenance services
Car wash attendant
- Dusts loose dirt and wash cars off with water
- Makes sure that car windows and doors are properly secured before dusting and washing
- Adjusts water pressure in hoses to Make sure that no damage occurs
- Mixes soap and water in appropriate quantities
- Uses cloth or sponge to soap cars and wash them down
- Makes sure that windscreens are not scratched during the soaping procedure
- Hoses down cars properly and make sure that no trace of soap is left behind
- Dusts the interior of the car and make sure that any trash is disposed-off properly
- Polishes interior surfaces and vacuum carpeted area inside the car
- Makes sure that the roof of the car is cleaned or wiped according to instructions
- Waxes and polishes the car from the outside
- Makes sure that the car is properly dried from the inside and the outside
- Puts back place mats after dusting, washing and drying them
- Drives cars through the car wash area when specifically instructed by car owners
- Makes sure that any accessories taken out of the car during the car wash procedure are put back before handing the car to the owner
- Welcomes clients and potential clients by greeting them in person or on the telephone; answering or directing inquiries.
- Makes sure s that all contacts with clients (e-mail, walk-In centre, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Serves as a auto parts sell attendant
- Manages administrative duties assigned by the creative director in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to Make sure accurate and helpful information is supplied to clients when they make enquiries
6. SWOT Analysis
The primary service offered by is at FRACS is the general repair of automobiles for the general public. We at FRACS will have the ability to service most domestic and foreign automobiles. We at FRACS plan to maintain an extensive shop which can fix any automotive issue.
We will also generate income from both the sale of the mechanic’s labour and the sale of after-market parts which may be needed for the repairs. We have adequate plans to make our business the best in the industry, which is why we contacted Access Business Consultants to do our SWOT Analysis for us.
Access Business Consultants are known for the experience and agility they posses in terms of business consulting and analysis. They were very thorough with their dealings and outlined below is a summary of the SWOT Analysis they conducted for us:
According to our SWOT Analysis, the strength of FRACS rests on the power, dedication and experience of our workforce. Our team at FRACS comprises of individuals who understand the automobile industry in and out, they have been in the industry and they understand the changing trends and the quality of innovation needed to stay relevant in the industry. They also have been put through specialized monitored training that will boost the approach to customers and adequate understanding and adjustment to situation.
It was very easy to note in the SWOT Analysis that the industry we are into is very competitive. It was also noted that our weakness include the time it might take us to development an identity and consumer brand acceptance, develop and execute effective marketing communications, Identify and execute ongoing affiliate revenue generation, advertising, and ecommerce revenue stream. We believe all these are issues we can handle properly and very fast.
- Opportunities
Our SWOT Analysis noted that the automotive industry is a huge, diverse set of manufacturing and service businesses that bring cars and trucks to market, keep them in working order, paint, clean, fix and even trash them when it’s time. It stated that the industry will keep growing and we remain an important aspect of the US economy.
Our SWOT Analysis noted that just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new car service centre in same location where our target market exist and who may want to adopt same Business model like us.
7. MARKET ANALYSIS
- Market Trend
We at FRACS understand how the car service centre industry works and how fast things change. We understand the trend in the industry, which is why we have put it on ourselves to outline them in our comprehensive business plan. They trends in the industry, both old and new, will be properly considered at FRACS, and they include:
- The increase in complexity of vehicles often requires specialized training. Repair shops can gain an edge by specializing and staying current. However this specialization is leading to a shortage of trained techs in the market.
- Electric and hybrid cars are bringing new opportunities to market– service, parts, and fuel businesses will need to expand to support these trends.
- Service providers are now able to leverage technology to gain marketing efficiencies. For example, timely reminders about snow tires and oil changes have already proven to provide an uptick in return business.
- New cars are getting more reliable. Improvements in technology and materials are increasing useful life and requiring fewer services. New cars, in other words, are able to last longer with less money spent in aftermarket services. Some automobile manufacturers are even recommending longer intervals between standard maintenance services such as oil changes or tire rotations.
- On the flip side, people do wash new cars more frequently!
- There are a lot of cars on the road, and keeping them running, keeping them clean and making them your own is big business. This breadth of opportunity and such strong market trends make 2016 an exciting time to get involved!
8. Our Target Market
We at FRACS have conducted a market survey and feasibility studies and we believe that there is a vast range of both corporate and individual clients who would need the services of a car service centre, which we hope to offer with breath taking services.
We have also created strategies that will help us reach out to various corporate organizations and households who we know can’t afford to do without our services. Below is a list of the people and organizations that we have specifically market our products and services to;
- Banks, Insurance Companies and other related Financial Institutions
- Blue Chips Companies
- Corporate Organizations
- Manufacturers and Distributors
- Transport Companies
- Haulage Companies
- Individuals and households
- School with transportation system for students
Our competitive advantage
Our competitive at FRACS rests on the vision and unity of our partners, who understand better than many of their rivals that a service visit does not just include repairing a client’s car; it inculcates the entire service experience from the first time a client talks to their mechanic until they decide to stop driving.
We at FRACS understand perfectly that the long-term profitability of a service firm of this type lies in the repeat customer that finds our services unique and enjoy our excellent experience, even if they must have suffered an inconvenient breakdown.
We all FRACS believe that we will seek to examine every aspects of the service experience to look for ways to improve our customer satisfaction. Also, we believe that all our employees will be rigorously trained and retrained to think about customer satisfaction in order to create a self-sustaining company culture that revolves around this issue at FRACS.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Just we stated above, the primary service to be offered by FRACS is the general service of automobiles for the general public. We believe that we will have the ability to service most domestic and foreign automobiles. We also plan to maintain an extensive shop and outlets which can fix any automotive issue.
We will generate income from both the sale of the mechanic’s labour and the sale of after-market parts which may be needed for the repairs. Below is the outline of the services we will offer and make income from them:
10. Sales Forecast
We at FRACS understand perfectly that the car service centre industry is, operationally, a job-shop environment; it is somewhat difficult to estimate sales. For job-shops, each individual product or service is tailored or unique to that job, and is only initiated once an order is made.
However, our sales projections reflects the professional opinion of our sales and marketing team who believe that in how much we make at FRACS will depend solely on the following assumptions:
- The number of clients out founding workforce can attract from their previous companies.
- The outcome of planned promotions and word-of-mouth marketing.
- Current prices and costs of doing business .
- The types of automobiles and jobs that will occur in every month.
Yet we believe in the strength of our workforce, which even our SWOT Analysis noted and we believe that we are built on the foundation of success. Our sales and marketing team noted that definite sales projections cannot be analysed, given the prospect of the industry we are into, but are very prepared to shoot FRACS to the top.
- Marketing Strategy and Sales Strategy
It is utmost goal at FRACS to become the local leader in quality and service experience of all the small car service centre business within the New Orleans area while also striving to keep a low cost plan. We believe that once a reputation for quality and service experience has been created, and a strong network of referrals is attracting new business, we at FRACS plan to re-evaluate all our strategy and positioning within the market to see if a differentiation strategy is viable.
We believe that this will allow us at FRACS to increase prices and raise profit margins in relation to our competitors on the industry. We believe that this process is will help us achieve long-term growth until we at FRACS can reach a regional scope of operations. We at FRACS have a simple, direct and modest program of marketing our breath taking services to our target market that includes the following:
- Direct mailers.
- Newspaper ads.
- Yellow pages.
- Referrals through other local businesses.
We believe that each of these marketing aspects has the benefit of being low cost and creating service awareness that will catapult us into limelight. Our long-term marketing goals at FRACS is to use local radio and TV ads in making sure that people know what we do and where we offer them.
We at FRACS also hope to consider the possibility of having a grand opening program that would feature discounts, food, a local radio disc jockey, and other promotional ideas, and we hope we will actualize it because it is a diehard marketing strategy.
11. Publicity and Advertising Strategy
We understand how competitive the industry is and the level of importance attached to publicity, which is why we expect that a significant number of our founding partners and employees pre-existing clients ( both personal and where they worked ) will desire to switch to FRACS retain the services of their personal mechanics who they believe understand how they automobiles function.
We believe that this will provide a sufficient income until we at FRACS can build up a brand affinity or reputation and see our marketing program take effect in the entire industry.
We at FRACS believe that our publicity and advertising strategy will take the form of flyers, direct mailers, price discounts, and advertisements in newspapers and yellow pages. We at FRACS do not intend to spend a large amount on marketing until the firm is ready to expand either into new facilities or open up new ones. It is estimated this will occur sometime after year five, but we will leverage some approaches to boost our brand awareness and they are;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, YouTube, Google + et al to promote our services
- Install our Bill Boards on strategic locations all around New Orleans
- Engage in road show from time to time in targeted neighbourhoods
- Distribute our fliers and handbills in target areas
- Contact corporate organizations by calling them up and informing them of FRACS and the services we offer
- List our auto repair, servicing and maintenance business in local directories / yellow pages
- Advertise our auto repair, servicing and maintenance business in our official website and employ strategies that will help us pull traffic to the site.
- Ensure that all our staff members wear our branded shirts and all our vehicles are well branded with our company logo et al.
12. Our Pricing Strategy
We at FRACS understand that we exist in a purely competitive environment where each business must be a price taker. This simply means that a business that has no ability to affect the market price of its services, regardless of how many automobiles it services is destined for a crash.
Therefore, putting it, that marginal revenue (the revenue incurred by producing or servicing one more unit) is equal to the price charged. Furthermore, because the demand curve is essentially horizontal, we at FRACS can service automobiles at total capacity without affecting the price in the market.
All these simply mean that we at FRACS must strive or look to charge our clients at the market price (or lower). It has been estimated that the average price is approximately $400 per vehicle, and we understand that as long as marginal costs do not surpass revenues, the method to increase short-run profits is to service automobiles at maximum capacity.
- Payment Options
Having done our research and studies, we understand that payment options are the forces that bring a car service centre closer to the heart of the people, and we hope to make use of that extensively. We will be bringing payment options that are unique and will make the payment for the service we offer very easy for our customers.
- Payment by via bank transfer
- Payment via POS machine
- Payment via online bank transfer
- Payment via mobile money
- Payment with cash
To provide all these outstanding services, we have partnered with a renowned bank in the country and we hope to make use of that relationship. Our bank account numbers will be made available on our website and promotional materials so that it will be easier for clients to make payments when necessary.
13. Startup Expenditure (Budget)
We at FRACS understand that no matter how breath taking your ideas and goals might be or how attractive your business plan might be, without proper and enough financing your ideas are just like water poured on a rock.
In every business enterprise fund is a big ingredient that can move a business to the limelight and without a detailed business plan; a business won’t be able to land substantial funds from prospective investors. We have analysed the market and have decided on how we plan to spend our start up fund.
These are the key areas where we will spend our start – up capital on;
- Business incorporating fees in the United States of America will cost – $750.
- The budget for Liability insurance, permits and license will cost – $3,500
- Acquiring a garage facility that can accommodate a good number of cars per time for at least 6 months (Re – Construction of the facility inclusive) will cost – $100,000.
- The amount required to purchase the needed tool box and repair equipment – $25,000
- Equipping the office (computers, printers, projectors, markers, servers / internet facility, furniture, telephones, filing cabinets, and electronics) will cost – $30,000
- Amount required to purchase the needed software applications to run our business – $3,500
- Launching an official Website will cost – $500
- Amount need to pay bills and staff members for at least 2 to 3 months – $70,000
- Additional Expenditure such as Business cards, Signage, Adverts and Promotions will cost – $5,000
From our detailed cost analysis above, we will need approximately two hundred and fifty dollars ( $250,000 ) to start FRACS. All our partners are inclined to raise this fund and build a standard business.
Generating Funding / Start up Capital for Fast Repair Auto Car Services (FRCS)
FRACS is a new car service centre business formed or that have four founding partners, Ernest Brighton, Donald Meth, Wesley Shinuf, and Luke Chin. We are the sole owners and operators of the business and they intend to remain so till further notice.
We have been able to raise the required funds need to start FRACS from personal savings. We intend to build a business that will take over the market completely while also giving customers what they want. Their objectives is to make sure sales revenues increase steadily through year three and also to institute a program of superior customer service through rigorous evaluation of service experience.
14. Sustainability and Expansion Strategy
We at FRACS understand that in the car service industry, every business builds its client base one customer at a time and mostly through word of mouth marketing. Which is why we will also strive to keep our customers with our High-quality work, constant contact with clients so as to keep them informed about the state of their automobile and the repair job progress, and employ intelligent mechanics that are friendly, customer oriented, and will take the time to explain to customer the intricate nature of our business and our work.
We also understand that the industry is highly competitive. Each company within this field has high capital costs, low margins, and a high intensity of competition.
We understand perfectly that suppliers have a great deal of power in setting and negotiating the prices of their products and services to car service shops. We believe that this is due to the fact that the suppliers who absorb the greatest amounts of cash from repair shops are large auto part companies.
We believe that these companies are more consolidated that the car service industry, have deeper pockets, an almost limitless number of substitute customers, and finally they are the single most important supplier to the car service industry. This only goes to mean that these companies can set whatever price they wish to. Also, the barriers to entry and exit are moderately low in this industry.
Switching costs are virtually non-existent and the costs to entry and exit the market are low. The large number of competitors in this field including substitutes means that the pricing for such services are very competitive. We believe that the only way to have an advantage in this industry is a low cost leadership principal applied aggressively to all aspects of the business or to build up customer relations to a point where the switching costs are raised.
Also the technological revolution in computers has enhanced our abilities to diagnose and repair our client’s vehicles. We at FRACS have put all these into consideration and believe we will remain on the cutting edge by instituting the use of computer diagnostic equipment in its shop. We will continue to seek new ways to provide a better service through technology and also remain vigilant for new trends.
Checklist/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of All form of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Leasing, renovating and equipping our facility: Completed
- Generating part of the start – up capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress
More on Auto Repair & Services
How to write an effective auto repair shop business plan
Key takeaways
- An auto repair shop business plan will provide a blueprint for the launch of your business and increase your chances of success
- Investors and lenders use business plans to determine whether your auto shop can reach profitability
- There are seven main sections of an auto shop business plan that can help clarify the vision of your business
Want to start your own auto repair shop but don’t know where to start? Before jumping ahead and launching your new business on a whim, consider investing the extra time and effort in writing an auto repair shop business plan .
A business plan not only provides a roadmap to grow your business , but it actually increases the chances that your endeavor will succeed. Business owners who write a business plan generally grow 30% faster than businesses that don’t.
Roll up your sleeves and use this guide as your very own auto repair shop business plan template .
7 core sections of an auto repair shop business plan
One of the main reasons for coming up with a business plan is to show readers—especially lenders and investors—that your business model is financially sound and can be profitable. It’s also a guide that helps you organize your thoughts, set goals, and clarify your vision. Essentially, it’s your business blueprint.
Beyond that, you can use a business plan to get feedback on your idea and determine whether it’s worth pursuing. Third parties, like other auto shop owners or financial advisors, can also read through your business plan and give you any suggestions or advice.
An auto repair shop business plan should include the following sections:
- Executive summary
- Business description
- Market analysis
- Services or product line
- Operations and management
- Marketing and sales
- Financial factors
Each section serves a specific purpose and will help you plan your car repair business from every angle.
1. Executive summary
The executive summary kicks off your auto repair shop business plan and provides an overview of what’s to come. It should be clear, concise, and engaging enough to encourage people to read the rest of your business plan .
While this section is a culmination of all your research, keep it brief and to the point. Your executive summary should include the following:
- Mission statement
- Description of your business
- The leadership team and number of employees
- Auto repair services you offer
- Where you’re doing business
- Why you’ll succeed
Even though the executive summary is the first section of your business plan , it’s best to write it after you’ve completed all the other sections. This way, you have a thorough understanding of all aspects of your plan before you summarize it.
2. Business description
The business description is an overview of what your business actually does. It should cover:
- What makes your company unique
- Your competitive advantages
- The customers you plan to serve
Describe the strengths of your business model and any competitive advantages your auto shop has. Do your mechanics have many years of experience and training that other local shops may not have? Were you able to secure prime real estate in a high-traffic area that can bring in more business?
You should also explain your target market and which customers will find value in your automotive services . For example, some auto shops may focus solely on everyday customers who want to service their personal vehicles. Other auto shops may aim to service commercial fleet vehicles for other businesses like electricians or landscaping companies.
3. Market analysis
It’s imperative to understand the state of the auto repair industry before you decide to launch your own small business . This section of the business plan provides proof to readers that there’s a healthy demand for your business to be successful.
First, determine if such a demand exists for a new automotive repair business in your area. You can come up with a general market analysis by tracking how many auto businesses are operating in your region and if they have an influx of customers.
The market analysis section should also include a competitive analysis. Find out what your competitors are doing right and opportunities for improvement. Scanning through Yelp reviews is an easy way to gauge the strengths and weaknesses of other car repair shops in your area. You can mimic tactics that are successful and capitalize on their areas of weakness.
Browse through our guide on how to do market research for helpful ideas on conducting market research for your business plan without having to spend a fortune.
4. Services or product line
Readers need to know how your business will make money. This section of your business plan is where you highlight the specific services and products that will help you reach profitability.
For example, maybe you want to offer general auto services, or perhaps you decide to specialize in certain areas—like transmission or engine repair , oil changes , or auto body repair. Be specific if you plan on serving a niche that sets you apart from competitors.
You can also include a list of different auto parts or products that you expect will generate revenue. For example, you can include price estimates of specific products, such as vehicle headlights, engine oil, or oil filters.
5. Operations and management
The operations and management section discusses what type of business structure you will form and who will be running your company.
Start by explaining the legal business entity you will be creating. You’ll have the option of forming a sole proprietorship , partnership, limited liability company (LLC) , or corporation. You can find more details in our guide to registering your business .
You can then lay out an organizational chart or company summary that shows the hierarchy of leadership in your car repair business. You’ll also want to highlight the years of experience each employee has and what specialties they bring to provide high-quality work and help your company succeed. If you’re the only employee, provide a professional overview of yourself and why you’re qualified to make your auto shop a success.
6. Marketing and sales
Readers will be interested in your auto repair marketing plan and how you expect to find new customers—specifically, which traditional and digital marketing channels you’ll use to draw up business.
When you start an auto mechanic shop, you need to advertise your business to not only attract new customers , but to also retain them and turn them into repeat buyers.
A professional-looking website will be a main area of focus. It will serve as the online face of your company and hub for incoming traffic from other digital marketing efforts, such as:
- Email marketing
- Referral program
- Pay-per-click digital advertising
- Social media marketing
- Claiming your Yelp Business Page
- Search engine optimization (SEO)
- Content marketing
You can also use more traditional marketing ideas to advertise and grow your auto shop like business cards, referral incentives, or loyalty programs. In this part of your business plan , explain how you will use each of these different marketing channels to earn your first customers and get your business off the ground. For more ideas, see our guide on affordable auto repair marketing ideas .
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7. Financial factors
Those reading your auto repair shop business plan —especially lenders and investors—will need to know if your new business is financially viable. This section will include a financial plan and tangible evidence that your business is capable of succeeding.
Businesses that are already up and running can provide income statements, balance sheets , or cash flow statements. For those that haven’t launched yet, you can produce financial projections based on your startup costs and pricing —including equipment, tools, property rental, and monthly utilities. Once you have a detailed overview of your startup costs , you can set the pricing for your small business services .
This is also where you would include a funding request if you need one from an investor or lender. Explain the amount of funds you’re seeking and how you’ll allocate any investment dollars. On top of that, give an estimate of when you will reach profitability based on your financial projections.
Drive your auto repair business to success
You should aim to be as thorough as possible when writing your own business plan . If you put in the hard work upfront, your business will be better off in the long run.
Start going through each section of your plan and provide as much research and data to support your findings. Also, remember that it makes more sense to write your executive summary after completing all other sections.
Lastly, put yourself in an investor or lender’s shoes. What would you be looking for if you were thinking about investing in a small auto repair business? Make sure you can answer these six questions when starting your own business and you’ll be off to a great start.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.
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The World's Leading Business Plan Template Directory
Auto Repair Shop Business Plan Template [Updated 2023]
Auto repair shop business plan template.
If you want to start an Auto Repair Shop or expand your current Auto Repair Shop, you need a business plan.
The following Auto Repair Shop business plan template gives you the key elements to include in a winning Auto Repair Shop business plan.
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
Below are links to each of the key sections of your Auto Repair Shop business plan: Auto Repair Shop Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
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Auto Repair Shop Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
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