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If you're a mechanic, opening your own auto repair shop is a great way to turn your skills into a profitable enterprise. In this guide, we've compiled the information you need to start your own automotive repair business.
An auto repair shop specialises in providing car repairs and maintenance to consumers and businesses. Most auto repair shops provide vehicle repairs, safety inspections, air conditioning repairs, wheel alignment and more.
Follow these steps to set up an auto repair shop:
To get your automotive repair business off the ground, you will need:
To run an auto repair business, you will need a motor vehicle repairer's licence from your state or territory office.
In addition, in most states you will need a valid motor vehicle tradesperson's certificate if you want to do the repair work yourself. Anyone who carries out repairs in your business must also have a tradesperson certificate. Check with your state and territory office what the requirements are.
In order to get a motor vehicle tradesperson's certificate, you will need Certificate III or higher in the relevant discipline, such as Certificate III in Light Vehicle Mechanical Technology, Certificate III in Heavy Commercial Vehicle Mechanical Technology or Certificate III in Automotive Electrical Technology.
To run an automotive repair business, you will need equipment including:
You may also want to invest in software and equipment to make running the back end of your business a little easier:
Depending on the level of your savings, the commercial space you're renting and the equipment you need to buy up-front, you may need to get a loan to start your business.
Our guide on small business loans can help you figure out which option is the best for you. Keep in mind some lenders will require you to have been operating the business for at least 6 months to a year, while other lenders will require a minimum annual turnover of at least $100,000.
If you're just starting your business, you may need to think about getting personal loans instead. Before you apply, always make sure you're able to afford all repayments, including any additional fees or charges.
Before you register for an automotive repair business, you need to choose a business structure. Depending on how you will raise your capital, you can decide to choose between the following business structures:
This type of business structure comprises one person who is the business owner. As a Sole Trader, you have to raise the entire capital for starting the business and run the business alone.
This structure can be suitable if you decide to partner with one or more people to start your automotive repair business.
This type of business structure allows multiple shareholders to own the business. It can be suitable if there are external investors involved or if you want to protect yourself from the Company's liabilities.
Before you start operating an automotive repair business, you also need to get an Australian Business Number (ABN).
You may need several legal documents before opening your automotive repair business. If you're not sure of how to go about this, you can find legal documents online at websites like LegalVision or Lawpath. There is a range of legal documents to suit your needs. They include:
You may also need to speak to a lawyer to make sure your business is legally compliant and to have all your paperwork reviewed. These lawyers could be helpful:
Good marketing skills may attract customers. You may opt for online ads if you have a business website to advertise your products and services. Offering clients guarantees is one of the sure ways to win their loyalty. You can also use word of mouth and email marketing to find new clients.
Online marketplaces are another way to build your customer base. Some of popular platforms include:
You can charge customers a fixed rate or an hourly rate for labour. Many automotive repair shops will also charge customers for the various parts needed for a repair.
According to ServiceSeeking, auto repair shops in Australia charge between $60 to $88 an hour, depending on factors such as:
Does my automotive repair business need management software?
Your business may need a customer relationship management (CRM) software to help make your work easier. Software that might come in handy includes 5iQ Workshop Software, ARI and Auto Repair Bill.
Do I have to wear protective gear when working?
You should wear protective gear every time you are repairing. This includes gloves, goggles and steel-capped boots.
What are the pros and cons of running your auto repair business from a shop vs running a mobile repair business?
If you want to run your auto repair shop from a garage or a workshop, you'll need to pay rent. It will add to the cost of running your venture and may slow you down in opening your business because you need to find a suitable place first. For an auto repair shop, you'll want to make sure there is plenty of on-site and off-site parking and that it has easy access for clients.
If you're running a mobile mechanic business, you'll have lower startup costs because you don't need to pay rent. You'll also have a wider customer base and can attend to emergency car breakdowns, because you can travel to customers' locations. However, being a mobile mechanic means you will be spending more time on the road and will need to spend money on petrol, tolls and other transportation costs. There will also be services you cannot provide as a mobile mechanic if the problem requires more specialised equipment.
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