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How Much Money Does It Take to Open a Mechanic Shop?

Posted by Juan E. Chavez on 20th Nov 2017

HOW MUCH MONEY DOES IT TAKE TO OPEN A MECHANIC SHOP?

Once you’ve completed your automotive repair training, and have a year or two of service experience under your belt. The next step in your career may be to open your own mechanic shop, making the leap from technician to owner.

To get there, you will likely have to learn the art of delegation and management. In addition to many other hats, you'll need to wear them in the early stages of your repair shop.

But before we get that far, one of the major considerations is of course – how much money will you need to make it happen?

How much does it cost to open a repair shop?

Unless you have access to unlimited amounts of cash, many techs turned business owners learn under the wing of other repair shop owners. This allows you to get the experience and money you need to make your dream come true.

Among the first pieces of equipment, you'll need for your own shop will be:

  • Diagnostic equipment
  • Brake lathe
  • Jacks and jack stands
  • Mechanic tools
  • Vehicle lifts

The more you can buy in advance, the less money you will need for opening the shop when the time comes.

There are techs who outsource many procedures and tasks. Though this might be beneficial for some, we don't recommend it as it will likely eat up your profits.

You don’t have to pay top dollar to have quality, reliable equipment. Taking the time to locate name brands with little wear can pay off. Items like brake lathes and vehicle lifts will last for years.

One way to find great deals can be looking for shops that no longer need pieces of equipment. Not because they're of lesser quality but many shops upgrade. You also have repair shops that are going out of business who need to move equipment.

Depending on the services you expect to provide, furnish your shop with the right equipment to do the job efficiently and profitably.

So What Will It Really Cost to Open Your Auto Repair Shop?

SO WHAT WILL IT REALLY COST TO OPEN YOUR AUTO REPAIR SHOP?

Not every mechanic shop performs every type of service. These are basic guidelines on what you can expect to spend to get an auto repair shop up and running:

  • Insurance - $ 4,000/year
  • Essential tools - $ 15,000
  • Lifts (installed) - $ 4,000 each
  • Diagnostic machines/equipment - $ 5,000 – $ 10,000 – depending on services provided
  • Rent – this can vary depending on the size of the shop, location, and even geographic area. But you want to be convenient to your expected customer base.

Shops specialize in different services so depending on what your specialty will be, your budget will vary. Items such as air-conditioning, diagnostic machines, transmission jacks, and engine lifts.

Other Expenses to Consider

Other expenses to consider

There are many other thoughts to factor into the cost of opening your mechanic shop:

Business permits – find out if your locality requires permits for your operation and any inspections that may be required.

Labor – even if you’re a one-man operation, you'll still need help. Tasks such as manning the phones, handling billing and customer accounts, balancing the bank statements, or even maintaining the workshop. Don’t underestimate the cost (and value) of hiring extra manpower to keep the shop running.

Certifications – many shops advertise that their mechanics are ASE-certified. This may not be important to you initially, but gaining and keeping up certifications could add to your perceived value to customers.

Advertising – you may be the greatest mechanic around, but no one will know you’re there if you don’t get the word out. With your own auto repair business, you now have marketing responsibilities. You may want to invest in newspaper advertisements, distributing coupons for reduced-price oil changes, and even creation of a website that makes your presence known. Check out these articles to get a better idea on auto repair shop marketing:

Remember that word of mouth is one of your most valuable marketing tools. Referrals from satisfied customers will bring their friends and family members to your shop.

Be Prepared for the Unexpected

Be prepared for the unexpected

Once you’re running your own repair shop, you need to be ready for problems other than technical issues:

  • Customers who don’t pay on time
  • Unexpected time off for your workers, due to sick days, vacations, etc.
  • Peak and slow business periods (fluctuations in demand for your services.

Remember that even a great cook may not be successful at running a restaurant. Make sure you’re prepared as a mechanic to handle the demands of running a business efficiently.

Is there anything we missed? What do you think are important factors that we may have missed when opening up a shop? Let us know! For more information on marketing tipsequipment, and installations, be sure to contact us today.