Auto Repair Business Plan: Tips and Advice
A business plan is an indispensible part of the start-up founding
process. The doors to business loan providers and investors will remain closed to you unless you submit a convincing auto repair business plan.
A number of considerations could help improve your auto repair business plan or trucking business plan and make you look commercially savvier. The right location, a sound financial plan and a concept to ensure customer loyalty are key among them. In this article we will try to give you some food for thought on the way as you write a professional business plan for your auto repair shop.
PS: Please also be sure to check out our article on getting a business loan for your start-up and our mini-guide on becoming self-employed without your own capital for more inspiration to create a business plan.
Auto Repair Business Plan: The Basics
An auto repair shop is a craft business. This means that there are some important prerequisites that you should be aware of as the owner and founder. Depending on your country, you can only start and run a craft business if you have the necessary authorization. You have to pass a certification exam to be eligible to take vehicle mechanic courses. However, it takes more than this to open a auto repair shop.
During the training you master important business knowledge that is indispensable for the management of a company. Ultimately, having a workshop means more than just providing professional services, because it is also a business.
Your auto repair business plan should indicate that you have completed courses but that you also have other skills that could be relevant to setting up and running this establishment.
Auto Repair Business Plan Tip 1: The Relevant Market
Every professional business plan describes the market, in which the future company will be active. This is important so that investors can assess potential opportunities and risks, which is especially important for their decision. You should present the relevant market as concrete and measurable, meaning in numbers.
The German auto repair market for example is divided into two groups. There are brand-bound (authorized by vehicle manufacturers) and independent auto repairs. In 2011 there were 38,000 auto repairs in Germany, of which approximately 17,600 were brand enterprises and 20,400 independent. The total number of auto repairs has been decreasing steadily in the past years, often due to lack of know-how or poor management.
Auto Repair Business Plan 2: Target Group and Offer
The choice of the target group is essential. First, you must ask yourself what type of auto repair shop you want to open. An independent or brand shop? The type of facility determines the particular customer base you’ll attract.
Brand auto repairs are based on the brands or manufacturers that they represent. They are therefore “not free” in their decisions, as they have to implement the specifications provided by the manufacturer in order not to lose their status. The target group is then determined by the car brand.
Auto Repair Business Plan Tip 3: Choice of Location
The choice of location is really important precisely because the total number of auto repairs has been decreasing steadily in the past years. Where is the competition located? Will you have casual customers? How much is the rent? Is the auto repair easy to see and find (A- or B-site)?
All these issues must be considered and weighed when choosing a location. Your professional business plan should also include a site analysis to convince potential backers or investors of the feasibility of your project.
Auto Repair Business Plan Tip 4: Important Legal Issues
Since this is going to be a craft business, as stated above, a number of legal restrictions must be observed. It’s important to emphasize the need for a sound education.
However, it is also important to have consultations with the municipality. A craft business will not be permitted or authorized in every neighborhood. Check the development plan of the municipality, in which you want to start a auto repair before you make a final decision on the location. These plans are usually available online.
In addition, choosing the right legal form is important. Company legal forms differ immensely in terms of liability risk, establishment expenses and the tax burden. The most common form of craft enterprises, which are run by one or more owners, is the personal company constituted under civil law. In this case all associates (the owners) carry full, unlimited and personal liability.
Auto Repair Business Plan Tip 6: Building a Client Base
The structure of the market for vehicle repair services is such that customer loyalty plays a significant role. Man is a creature of habit. As such, he always goes back to where he feels comfortable. Providing this “feel-good vibe” should be an important objective to be pursued at any cost.
When it comes to repairing vehicles, the main issues are safety and trust. A customer who is satisfied will come back to your shop. You have to look at the big picture. A lot of factors determine whether someone will come back – from a friendly welcome to the service speed and the end price – and clients consider all of them unconsciously.
Conclusion: A professional business plan for a Auto Repair should be typified by certain characteristics that reveal a well-thought-out concept. While you explore your entrepreneurial identity, you should maintain commercial logic in the business plan and take mental notes to clarify in the loan interview with an investor later on.
Should you need help writing a business plan or would like us to create a business plan for you from scratch (please consult our article on business plan consulting fees), our business plan consultants and business plan writers would be happy to be of service. Please do not hesitate to contact us.
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