How to Open a Car Shop Business?

Starting an Automotive Business

Running your own business is a dream of many. The sheer amount of experience, opportunities, and rewards that it provides partake the risk associated with it. The firm offers the freedom to make your own decisions, which are crucial for your personal and organizational growth.

Opening up a car shop business has gained significant popularity as most of the vehicles now on the roads require frequent maintenance and repair. The accessories market is also growing rapidly. Things like bash plates are no more just relevant for bikes. Owners are getting them installed on any vehicle now, be it the 4WD or truck.

The market for mechanics is also currently expanding, and people in business are investing in the idea that they will be generating substantial income in the future. Automobile mechanics working in automobile dealership repair shops can open up their car shop business and fulfill their idea of providing quality services.

A car shop business can give its owner control over his working hours and allow him to reap the benefits of his business. However, to do so, one needs to follow specific steps, which are listed below.

1.  Certification and Training

It is not mandatory, but anyone thinking of opening a new car shop business, should have a certificate and take proper training. Automotive Service Excellence (ASE) certification, along with the general automotive education, will help you apply for the required financial support and insurance coverage. Certification also gives confidence to the customer about your specialization in the field.

However, before qualifying for the ASE certificate, educational and working experience of two years is mandatory.

2.  Prepare a Business Plan

The first and foremost step before setting up a new business is to outline the overall blueprint. This accounts for several factors like finalizing the business name, setting up a target market, and estimating the costs associated with it. For car businesses, this plan would generally include choosing the specialized services that you can provide along with the prospect of looking up to buy an existing car repair shop.

3.  Setting Up The Cost Analysis

The cost of setting up a new car business takes into account several factors like:

Business Licence – $50-$100

Shop rental fees -$1500-$15000

ASE Certification -$40

Diagnostic machine -$5000-$10000

Particular toolbox -$1500

Insurance Cost -$4000

Hydraulic Lift -$3700

The estimated cost goes up to $45000-$50000. Owners that are short on funds and require financial support to run their business can look for sources that provide loans with less investment and extended repayment date. 

4.  Finding a Good Location

Location plays a considerable role in a business to increase its visibility and exposure to the target markets. While selecting the site for the car shop business, certain things should be kept in mind like:

  • Places near the highway or main road are viable options.
  • Look for more significant buildings that can accommodate an office and also have the waiting room for the customers.
  • Find an easily accessible spot.

5. Define Your USP

Identifying competitors and analyzing their business approach helps to create a Unique Selling Point for your business. Offer unique services that are not available in the area and narrow down the niche in order to attract targeted customers.

6. Make Contacts With the Local Dealers

Many of the car dealers have their mechanical shops inbuilt at their stores. However, for the ones who don’t have that, you could provide a solution. By allying with dealers, you can advertise for their businesses in return for getting referred customers for yours.

7. Develop a Marketing Plan

Any business to maximize its reach needs to have a healthy marketing plan. A careful mix of traditional, as well as a digital marketing strategy, would help to advertise your business to a broader set of audiences.

The traditional marketing approach includes distributing flyers around the town, along with advertising your business on local television stations and social media.

The digital and modern marketing technique requires establishing a web presence of your business along with the social media marketing that helps to generate profitable and potential leads.

8. Hire Staff

Before going live with your new business, you need to hire sufficient staff and provide training to them. Conduct a hiring process that includes testing their basic automotive knowledge along with their skills and specialization sectors.

9. Miscellaneous Acts

Performing some other miscellaneous functions like registering for the state and federal taxes, opening a new business bank account, new credit account, etc. will ensure the smooth functioning of your business.


 Opening up a car shop business is a profitable idea. Fulfilling all the necessary steps will ensure your business to run effectively and generate profitable returns. However, once your business functioning becomes smooth, you can look for expansion. This includes making your business available on mobile and giving door-to-door service for repairs like tire changes, oil change, minor maintenance, etc.



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