Small Business Brief

Auto Dealership

Love Cars? A Guide to Starting Your Own Auto Repair Business

For some people, taking care of cars is more of an enjoyable hobby than an obligation. If you fit into this category, odds are you have a knack for mechanical applications. Between your love of cars and your inherent talents, it’s only natural to consider starting your own auto repair shop. 

Not only is this a great career to pursue because it follows your passions, but it’s all a fantastic way to make a lot of money. But before we get ahead of ourselves and start talking about retiring from a successful business, we need to cover the basics. 

Keep reading for a quick guide on how to start an auto repair shop. 

Assess Your Skill Set

First, let’s talk about your strengths and weaknesses. If you’re going to own and operate an auto shop, you need to assess your skill set before going in. For example, are you a good leader, a natural salesman, and a hard worker?

In what areas do you need to improve if you want your auto repair shop to thrive? For example, if you’re somewhat disorganized, you may need to think about working with a bookkeeper to help you manage your finances. If you struggle to keep things clean, you might need to hire a professional cleaning crew to keep up your shop.

Refine Your Niche and Target Customer

Next, the success of your auto repair shop business depends on your customers. To find the right customers, you need to identify your niche in the auto industry.

For example, will you provide low-cost services for people that have lower incomes? Alternatively, maybe you love working on classic cars and want to work exclusively on older vehicles? 

Regardless, refining your niche will help you determine who your target customers are. The better you know your target customers, the easier it will be to successfully market to that demographic of consumers. 

Conduct Market Research

Now it’s time to start researching the auto repair shop industry. You need to know about your local competition, the demand for the services you’ll be offering, competitive price points, and more. 

Learn as much as you can before you start an auto repair shop so you know what you’re getting into. This also includes:

  • Startup costs
  • Average costs of operation
  • Marketing strategies
  • Industry trends and consumer habits
  • And more

Additionally, study the other autobody shops in the area to learn what they’re doing right and what they’re doing wrong. In what ways can you stand out from these competitors or offer something better or different. 

Create a Business Plan

Building a business plan is the next step in starting an auto repair shop. Your business plan needs to be thoroughly researched and well-written. Not only will it serve as your blueprint for success, but it will play a large role in getting the startup funds you need to launch your auto shop. 

Your business plan should include:

  • An executive summary of your business
  • An in-depth description of your company and the services you’ll offer
  • Your business organization and management layout
  • Your market analysis
  • Your marketing plan
  • Your operational costs
  • Your growth strategy
  • Your financial projections
  • Your startup funding request

Remember, banks, investors, and other lenders will be evaluating your credibility and the credibility of your future auto shop based on the quality of your business plan. This is not a good place to cut corners or rush the process.  

Apply for Startup Funding 

Once your business plan is complete, you can start pursuing your auto repair shop startup funding. We recommend starting with an SBA loan application. These loans are stable and offer low-interest rates. 

However, SBA loans typically require excellent credit, which can make them more difficult to obtain. If you fail to get approved for an SBA loan, you can take a few months to build your credit

Conversely, there are other options. For example, you can look to various types of investors, such as:

  • Private investors
  • Personal investors (friends and family)
  • Angel investor groups
  • Crowdfunding sources
  • And more

Alternatively, consider taking on a business partner who can provide funding and/or increase your loan eligibility. They can be a silent business partner or an equal business partner. Just make sure it’s someone with whom you feel comfortable sharing your business, profits, and decisions. 

Find the Right Location

Once you get the startup funding you need, you can start looking for the best location for your auto repair shop. Ideally, you should find a popular neighborhood where your shop will have great visibility. This will make it more accessible to people driving by and looking for a nearby mechanic. 

However, you must also take your budget into account. Some areas of town are more expensive than others, especially for commercial real estate (whether you’re renting or buying). 

Take Care of the Logistics

Finally, it’s time to start pulling it all together. Assuming you used your funding wisely when locking down the right location, you should have plenty of money left over to take care of the logistics. 

This includes software to help you manage an auto repair shop. Autoshop management software can save you a lot of time, money, and frustration by keeping your business organized. Check out this website to find out more. 

You also need to buy or rent the necessary auto repair shop equipment to operate at full capacity. If your budget is limited, you’ll need to make a list of your top priorities and build up your tools and equipment as your company grows. 

Depending on the size of your auto shop, now might be a good time to start looking at potential employees. If you’re starting small, you could also operate by yourself for a while. 


Furthermore, your shop needs to be a legitimate company. This means getting a business license and investing in the right types of insurance.

Lastly, start marketing your company to the community to draw in customers. There is a wide array of marketing strategies out there. We suggest starting with a website, social media, SEO, content marketing, and paid advertising. 

Ready to Start Your Auto Repair Shop?

If you’re dreaming about starting your own auto repair shop, we hope our guide puts you on the right path. We’ve broken these steps down into their most basic components. If you want your shop to be successful, it will require further research and planning. 

For more business and marketing content, stick around and browse through some of our other articles. Our website was created to help entrepreneurs like you thrive in a competitive market.