How to Start a Car Repair Shop?

. 7 min read
How to Start a Car Repair Shop?

Investment, steps, tips, profits & more

Most people, after completing their mechanics-related studies, preferably plan to be an employee in car shops. Only a few with entrepreneurial minds go ahead with a car repair business plan. These kinds of businesses involve starting from scratch, and there’s more to it than just fixing cars. The car repair shop is the best business to start with minimal money. Cars are so essential for daily lives that people think opening an auto shop is an excellent start to business.

Things to know before opening a car repair shop

1. Know the kind of store you plan to open

The first step in starting a car repair shop begins with what type of business you are planning. There are various kinds of auto shops, and each one is different from the other.

  • Body shops

New business ideas can be starting with a car repair relating to a specific part of the car's exterior. It may be fixing dents or replacing damaged body panels right after the collision.

  • Transmission shops

These kinds of small profitable business ideas involve vehicle's transmission. It includes services, repair, maintenance, etc. Transmission is a complex part of a vehicle and is required frequently.

  • Tire retail shops

All cars will eventually require new tires, making it a popular option for the car repair business. Likewise, customers are always in search of tire specialisations. There are also inspection shops or those dealing with specialised glasses. Research about the type of business you plan to start.

business plan strategy written on notepad with documents and cup

2. Bring the business plan together

The next step is to get the car repair business plan to place. Besides, the business plan turns out to be the roadmap for success. Understand the fundamentals of the company before proceeding with the project. Some of the questions to ask are:

  • Who are the customers you will be dealing with?
  • What is the purpose of the business?
  • Who are the competitors?

Don't take the plan step lightly. Many consult with the experts to know all the bases of the concept.

3. Decide on the location

Next, you have to decide the place where these unique business ideas will emerge. Find the appropriate time to determine the location. All the brick-and-mortar locations are expensive. There, you must pay all the bills and utilities along with the overhead expenses. People nowadays have started with mobile tire repair shops.

4. Find the right finance option for business.

You will have to make a plan regarding who will finance your small-scale business. Make presentations for all the potential investors. You can approach the banks to cover all the equipment costs, the payroll insurance, and the charge for location. Many companies also seek out small business administration loans to build the car repair shop they wanted.

5. Hire the right employees

Running a car repair business is not a one-person show. You have to find the right people for the company. Reputation needs to be maintained, and the employees represent the reputation. When the customers like the work of the employees, more people will build trust. It will create a positive experience as well. You can also take the help of OkStaff to manage all your staff and salary-related functions.

Tips on how to grow the car repair shop

If you are thinking about how to start a car repair shop, this can be pretty daunting. From layering to coming up with creative ways to bring more customers, there is so much to do. Put the marketing strategies to use when running a car repair shop.

1. Make an online presence:

It is the Internet era where you have to keep yourself updated with the latest trends. For instance, if the youth don't find anything online, they won't find it essential. Start with the primary website, and then you can expand it gradually.

2. Use SEO knowledge:

SEO is required for improving the ranking of the website. Also, reports have shown that 70% of Google's users only search on the first page. They don't go ahead with other pages so much. All the websites that are ranked higher are more likely to be clicked more by the customers.

3. Give incentives for referrals:

Word-of-mouth is a very effective kind of advertisement, with 92% of the people believing in it. You can incentivise them by letting them fill a form and their names and telephone numbers. If anyone mentions any one name, they will get a discount or even a free oil exchange. It can be fun, but the only primary goal is to get more customers on the ground.

What is the best way for auto repair shops to earn money?

Any trusted car repair business will earn around Rs 8,00,000 per year gross to rise to the millions. The car repair shops make money by taking the customer's cars and testing them. They also replace all the parts which are not working.

1. Focus more on the labour costs

Shopping for cheaper parts will increase the profits slightly. Additionally, focus more on controlling the labour costs to improve the earnings by higher margins. The profit margin ranges from 20% to 28%, while the labour cost margins are anything between 50% to 65%. By lowering the labour costs, you are increasing the retail prices.

2. Inspection of the vehicles

Customers would want the car repair shops to replace parts that have been damaged. The mechanic can tell about various other problems by giving about 30 to 60 minutes to repair orders.

3. Marketing Tips

Keep the marketing presence both online and offline using referrals and customer services. Please don't sell them any used parts and give what you have promised to the customers. Apart from improving the inspection, spending minimum time in the shops also increases the loyalty base. You can set up a referral program to reward all the new customers in the business.

Right tools for opening car repair shops

1. Jacks

Jacks are used for working beneath the cars. To maintain safety in small business ideas, don't compromise on the quality of jacks. Purchase only the best one from the markets.

2. Oil and drain caddy

Oil changes are the first of the services to offer in the car repair shop. The oil and drain caddy is very important for storing the old oil for later use. Most of the oil is refined to be used as heating oil. Recycling car oil helps in saving a lot of resources from the environment.

3. Battery charger

Dead batteries are quite a common issue. A battery charger is one thing that should be kept handy. The battery charger has an operational manual that not many people understand. The charger will turn off automatically once the batteries are fully charged. Also, be sure to have jumper cables with a battery charger.

4. Brake Lathe

It helps to correct problems with the brakes by expanding usability. Likewise, it fixes the noise occurring in the brakes. There are two kinds of brake lathes - on-the-car brake lathe, which is mounted directly on the car, and the off-car requiring a motor to be taken off.

Close up hands of mechanic doing car service and maintenance

How profitable are car repair shops?

Car repair shops are very profitable to start when you keep the costs low. Be sure to let only people give positive comments on the shops. Marketing alone can generate about Rs 87,000 in the business every year. The companies get a 5 to 20% chance of bringing new customers. Keep a look at the capital expenses as well to know the actual profits of the shops.


The car repair shop is one of the best business ideas depending on how well you run it. If you enjoy repairing cars and it is your passion, you can go ahead.


Q. How much money is required to open a car repair shop?

Ans. The approximate cost to open an auto repair shop at present is rupees 5 lakh onwards. The price includes a full equipment list and vehicle expenses like shop insurance, accounting fees, marketing, and inventory management.

Q. Is there profit in the car repair business?

Ans. The net profit for an automotive shop business is generally 20% of sales. Hence, this 7% is used for retained earnings. The other 13% is used for paying the return on investment for the business.

Q. Is there any advantage of specialisation in the auto repair business?

Ans. The specialisation facilities like brakes or horns create a good reputation for the company, but you may lose out on other work opportunities.

Q. What is the advantage of getting certified for the car repair business?

Ans. There are numerous advantages of getting certified, like it will be easy to deal with the insurance and finding finances for the business. It also helps the customers gain confidence in you.