Business Plan & Profitability Assessment

Business plan & Profitability assessment
“Those who fail to plan, plan to fail.”

Without a solid foundation, no business can be profitable. And at the end of the day, an auto
repair shop is exactly that: a business.
That’s why it’s important to plan ahead. This is the first and most crucial step in increasing your
odds of success.
A business plan will help you answer a few basic questions that potential shop owners should
think through:
How much funding do I need for equipment and startup costs?
What will make my auto repair business different from my competitors?
How will I market my business?
What types of repairs will I do that are most profitable? What about least profitable?
How many repairs a week do I need to break even?
Outside of simply repairing vehicles, what are other ways I can provide value to my
customers? I.e. Providing great customer service.
Outside of helping organize your thoughts and ideas, a business plan will also become a
necessity to apply for funding later on.
Not sure how to begin? Here is a standard business plan for automotive businesses to help you
get started.
Those who fail to plan, plan to fail.
Mobile mechanic, home garage, or rented space?
If you are starting out with little to no money, it is unlikely you’ll be able to afford to purchase
your own garage.
However, there are several common ways to bypass purchasing your own space in order to
reduce your upfront costs.
Rent a Garage
Rather than buying your own garage, you can look into renting a repair bay from existing shop
owners that are looking to bring in an additional source of income.
For example, online services such as Rentabay and Garagetime offer listings for garages looking
to lease space.
You could also seek to find existing owners who are willing to share their space in your area. If
you go this route, ideally you would find shop owners that offer complimentary services to
yours.
For example, if you plan on specializing in German-made cars, find another shop that specializes
in Japanese cars. This will prevent any potential conflicts that arise from direct competition.
Business Licenses, Equipment, and other Auto Repair Shop costs
As part of your business plan, you’ll want to think through any necessary expenses to get your
business up and running.
(For more information on ways to raise funding, we’ll cover that in the next section.)
When operating under a tight budget, this is the step where you’ll need to make the hard
decisions on what is truly necessary and what is a nice-to-have.
Things that we recommend absolutely not skimping on:
Business license
Certifications
Permits
Insurance
Accountant fees
A comprehensive list of possible expenses will ensure you have the necessary repair equipment
and utilties accounted for prior to opening up your auto repair shop's doors.
Money
Ways to Raise Money
With a solid business plan in place, the next step is to find funding for your new business.
In the following section, we discuss just a few of the ways to raise funding for a new auto repair
shop.
A quick sidenote: this section is meant to provide a high-level overview of general funding
options for future shop owners and does not cover COVID-19 or coronavirus-specific relief
funding or resources.
Funding from family and friends
One option for raising funding is by asking family and close friends for the necessary capital to
get started.
When taking funding from your friends and family, it’s important to have clearly listed terms to
avoid potential future conflicts and disagreements. It’s also recommended to have a small
business lawyer look over your contracts and paperwork to protect you from liability.
A few things to consider to putting into writing:
How much money will be lent?
When will the money be repaid?
Will interest be charged?
What happens if the money is not paid back by the agreed upon date?
While there are potential risks with accepting money from friends and family, one potential
benefit is in increased motivation.
Specifically, you’ll be taking money from people you have personal connections with. You may
feel more of a weight of responsibility in order to prevent losing others’ money. Remember:
this is not necessarily a bad thing. It will motivate you to work harder to recoup their
investment.
Small Business Grants

Business Plan & Profitability Assessment

Uploaded by

Copyright:

Available Formats

Business Plan & Profitability Assessment

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Plan & Profitability Assessment

Uploaded by

Copyright:

Available Formats

Business plan & Profitability assessment

“Those who fail to plan, plan to fail.”

You might also like