How to Run a Successful Automotive Repair & Maintenance Business
Opening your automotive repair and maintenance business is one thing, making it successful is another. It can be very daunting when the odds are stacked against you, and you might feel as though you’ve bitten off more than you can chew. The first 1-3 years are going to be the most volatile and uncertain for your business as you try to establish yourself within the market and build a reputation. An automotive repair business loan can give you some breathing room and help you ensure your enterprise is successful.
This article is designed to help auto repair business owners learn how to establish and operate a successful garage so that they can generate a consistent cash flow, and eventually start turning a profit.
Automotive Repair Business Fundamentals
No matter what kind of auto repair shop you want to run, there are several fundamentals you should use to benchmark yourself against the competition and establish your business. Making sure you hit each of these points will give you the framework for your business and how you’re going to make it successful.
Define your USP
Your unique selling proposition (USP) refers to what your business is bringing to the table that will make it stand out and attract customers. Your USP does not mean you need to introduce a revolutionary new tool or system, but it does mean that you need to offer something unique in the market you’re trying to get a foothold in. Maybe your auto repair shop specialises in motorcycle repairs, or perhaps you’re able to secure the cheapest replacement parts for a certain brand of car. There’s no room for modesty when establishing your USP – make it clear why your garage is the best place for your ideal customer to get their vehicle serviced.
Identify your ideal customer
Identifying your ideal customer is a crucial step since it informs how you should structure your services as well as your marketing message. Without a clear target in mind, your business efforts will be unfocused and less effective than they could be. There are numerous factors you need to consider when identifying your ideal customers, such as their age, location, interests, income, values, and more. All this information will help you to focus your efforts on the people who are most likely to spend money with you, which is considerably more cost-effective than trying to appeal to everyone.
Obtain licences and certifications
To protect people from unqualified work, auto repair businesses are required to obtain specific licences and permits to legally operate. The most prevalent of these is a motor vehicle repair business licence, but other certifications are also required depending on the kind of work being performed, such as modifying/altering a vehicle or performing vehicle safety inspections. If you plan to offer courtesy transportation for those who drop off their vehicle at your garage, you will need certification to run a public passenger service.
Determine your marketing channels
There are several marketing channels that you should leverage when trying to promote your automotive repair and maintenance business. This includes online marketing (such as creating Google My Business and Facebook listings) as well as offline channels like the local newspaper or community business newsletter. You need to make sure that you utilise an omnichannel strategy, meaning that your messaging remains consistent across every channel.
Choose a location
The location you choose to set up shop will be crucial since your ideal customer won’t want to travel further than necessary to get their vehicle serviced. Think about what areas different types of vehicles frequent – would it make sense to open in a low-economic area if your focus is on luxury cars? You also want to consider the actual facility that you’re using – is it large enough to accommodate the vehicles you will be servicing?
Be willing to change
When establishing your business, you should be adaptable such that you can pursue market trends. This will ensure that you aren’t left behind or stuck with a mode of doing business that has become redundant or unpopular. Keep up to date with the latest tools and technologies that can give you an edge over your competitors.
Implement a Marketing Strategy
Marketing is how you promote your business and attract new customers, so it’s going to be an essential cornerstone of your business. There are a variety of tools you can use in your marketing strategy, and you should try to identify the right ones that will prove most effective for your business. An automotive repair business loan can give you to capital you need implement a winning marketing strategy.
Word of Mouth
Word of mouth is when your customers recommend your business to their friends, family, colleagues etc. This is one of the most common ways that an auto repair shop will gain new business, as most people will seek mechanic recommendations from someone they know and trust. The best way to promote word of mouth for your business is to deliver an amazing service that customers will want to tell others about.
Developing offline marketing strategies to promote your business
Offline or traditional marketing methods are also going to be important for your auto repair shop. Taking out newspaper ads, giving out fridge magnets, buying airtime on your local radio, or even hosting a fundraising charity event are great ways to get your name out there. Building your credibility as a trusted local business should be your goal.
Developing online marketing strategies to promote your business
You also need to develop online marketing strategies to ensure your business is reaching as wide an audience as it can. Getting an online listing on White Pages/Yellow Pages, Google My Business, and Facebook Business will be key to ensuring you are discoverable by those looking for an auto repair shop. Digital marketing strategies like search engine optimisation (SEO) and pay-per-click advertising (PPC) are also worth pursuing to drive traffic to your business website.
Recruit High-Quality Staff
For an auto repair business, you can’t afford to cut corners when it comes to the staff you hire. If customers have a poor experience because you didn’t hire high-quality staff, it can sink your reputation and seriously cripple your business. You need to make sure that you dedicate the necessary resources to recruit high-quality staff who add value to your business.
Recruiting high-quality employees means you need to find people who have the right skills, qualifications, and attitude to make your business flourish. You’ll want to make sure you are hiring mechanics who are familiar with the types of vehicles you will be servicing, as well as fully qualified to perform the work. It’s essential that you confirm someone has the right paperwork before you hire them, and that they can demonstrate proficiency in the kind of work you need them for. Making sure you cover all the bases during recruitment will help you minimise human error and maximise the efficiency of your business.
Developing adequate onboarding and training systems for your employees is key to making sure everyone is on the same page when they start their shift. Even employees with extensive experience at other auto repair shops still need to go through an introductory process that familiarises them with your business and how you want it to function. Also, facilitating further training and upskilling of your employees can give your business a competitive edge as well as help you retain them in their role.
To give your auto repair shop the best chance of success, you also need to make sure that you keep things organised and maintain records concerning your finances and inventory. Ignoring or half-heartedly handling this aspect of your business can seriously hamper your efficiency, causing you to lose time and money.
Keeping track of tools, replacement parts, and other inventory items you need to operate your business is essential. Effective inventory management will help you avoid situations where you have too much or too little of a certain item, allowing you to minimise your expenditure and maximise your businesses’ cash flow.
Budgeting is a vital activity for any business, and this is no different when it comes to your auto repair shop. You need to have a clear view of what your expenses are so that you can spread out your costs and justify business decisions. Without a budget, you won’t know how much spare money you have left over to spend on hiring a new employee, leveraging a new marketing tactic, buying new equipment, or anything else.
If you aren’t finding enough money in your budget to cover certain business expenses, you might consider taking out an auto repair business loan.
OnDeck provides flexible business loans from 5k to 250k on terms between 6 to 24 months. The application process is easy and only takes a few minutes. Upon approval, funding can be delivered in as little as 24 hours.
Whether you need to finance new equipment, staff, or just make up for a shortfall in cash flow, OnDeck can help. Speak to our team on 1800 676 652 today or apply online at www.ondeck.com.au.
Automotive Repair and Maintenance Frequently Asked Questions
Software products like Shopmonkey, Fullbay and Shop-Ware are some of the most popularly used by auto mechanics to manage jobs, keep track of inventory, and promote efficient workflows. Take advantage of free trials to see which software solution works best for your team.
Accounting for all expenses including equipment, facilities, and insurance, you can expect to spend anywhere between $60,000 to $70,000 to start up a small auto repair shop.