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4 How To Open An Auto Body Shop

( How to Open an Auto Body Shop - Opening a body shop can be a personally rewarding and financially lucrative business decision. However, knowing how to keep a vehicle looking new is not enough to ensure business success. First and foremost, you need to develop a business plan that will help you raise the funds needed to start a business and ensure operations run smoothly from the start! Luckily, you can easily get help to take the necessary steps to get a body shop up and running.

How To Open An Auto Body Shop

  • How to creating an actionable business plan

How to Open an Auto Body Shop (with Pictures)

Start working on a business plan. One of the best ways to ensure a small business is successful is to plan ahead. Even if you're able to do top-notch auto body work, starting a business requires extensive research, analysis, and thought. In short, have a thorough business plan before you commit to starting your own business.

Start by writing a detailed company description. For example, indicate whether you have a full-service shop or want to specialize in one service. Will it be aimed at a specific clientele, e.g. B. Japanese cars, or any type of vehicle?

A well-developed business plan helps at every step of the process. In particular, they benefit from cheaper leases, lines of credit, interviews with potential suppliers, financing options, and even operational practices.

Don't think of a business plan as a tool to help you run a business. Instead, develop your plan to decide if you can proceed with opening a body shop in a given area.

How to Open an Auto Body Shop (with Pictures)

Let the SBA advise you on creating your business plan. The US Small Business Administration (SBA) is the best place to go for starting your own business. Specifically, the SBA provides instructions and formatting guidelines to help you write a business plan. These materials are available online for free. The SBA can also direct you to other helpful organizations that may have more specific advice on the auto repair industry.

The SBA can also connect you with local organizations, individuals, and resources to help you plan, fund, and open a business.

In addition, the SBA may be able to connect you with a successful business professional who is willing to donate their time to help a small business. If this opportunity arises, ask to work with someone who has experience working with auto repair shops.

How to Open an Auto Body Shop (with Pictures)

Get local business advice. Especially if you are new to starting a small business, you need good guidance. For example, do you know how to prepare an income statement, balance sheet, and other financial statements? If not, you'll need to set up an account, befriend them, or otherwise enlist the assistance of an account. You will also likely need an attorney to determine the best structure for your business. After all, bankers see many business plans - you'll likely find one willing to look at yours and provide feedback for free.

While other body shops may not want to help the competition, reach out to other local companies that work on cars in a different capacity. For example, parts stores or junkyards likely know a lot about the local automotive community, including potential customers.

In particular, if you are dividing your business or taking out loans to cover the start-up costs, it is essential that you consult a lawyer and a financial expert when preparing your business plan.

How to Open an Auto Body Shop (with Pictures)

Get direct advice from a local government agency. There are often small business centers at the city, county, and state levels tasked with enforcing business regulations. Body shops require various special licenses and permits, and these offices can tell you what you need and help you get it. The SBA can help you connect with local offices who can inform you of the regulations you must comply with.

Auto repair shops must have permits for commercial operations, as well as special permits for certain work, such as e.g. B. Paint stripping and painting.

It is helpful to be aware of all relevant regulations during the planning phase in order to consider possible costs or other issues related to meeting these requirements.

  • How to estimate start-up costs

How to Open an Auto Body Shop (with Pictures)

State your income expectations for the first few years. Aside from where the business will come from, you also need to know how much -- and how fast -- the business is likely to grow. Being able to articulate exactly where the money is coming from and what the operational costs are. For example, acquisition and follow-up costs as well as a loan repayment plan and the amount of expected profits must be recorded each month or quarter.

Extrapolate these numbers for the first three years after opening.

Set the prices your shop will charge for certain services. These can be used along with your prospect forecasts to create sales estimates.

Set a break-even point. This is the point where the company generates revenue instead of spending money when it takes off. It can take longer to break even than you initially think.

How to Open an Auto Body Shop (with Pictures)

Determine the amount of funding you need. Simply put, you need to know how much money you need to start the business and keep it going until your business starts generating income. When you intend to borrow money through a loan, it is especially important to determine a specific dollar amount that you are willing to ask. Unfortunately, there is no approximate number as differences in location, equipment and operation size can mean start-up costs for body shops can vary significantly. This is one of the reasons why it is so important to develop a solid business plan, as it is the best way to accurately estimate your start-up costs.

Know that SBA-insured loans are one of the best sources of financing for a small business. This is another reason why you should follow SBA guidelines when developing your business plan.

How to Open an Auto Body Shop (with Pictures)

Overestimate equipment and material costs. Device costs are often underestimated. While you may be able to save money by purchasing used equipment, there is a greater possibility of unforeseen costs associated with the maintenance of older equipment. A good rule of thumb: Estimate your initial equipment and inventory costs and increase the number by thirty percent. While this may seem like a huge amount of money, it's far better to end up spending less than expected than to end up borrowing more.

For example, if you estimate that $100,000 worth of equipment is needed to open the business, plan to finance $130,000 worth of equipment.

Make a detailed list of all the equipment you need and their cost. It should contain everything: car lifts, wheel balancers, lifting platforms, paint guns, paint masks and the decoration in the reception area.

If you're planning to lease some equipment, consider an SBA-backed loan, which may offer you a low-interest loan with no down payment for equipment payments.

How to Open an Auto Body Shop (with Pictures)

Be prepared to invest in the best location you can find. Simply put, plan to open a body shop in the best location you can afford. In particular, you want a location that is easily accessible from major thoroughfares. Make sure that any location you are considering is for commercial use. If you take out a slightly larger loan to fund a business in a location where it's more likely to be successful, you might even be able to negotiate a lower interest rate.

How to Open an Auto Body Shop (with Pictures)

Consider opening an auto body franchise location. You have the option of franchising your business instead of starting and running your own business from scratch. The main benefit of franchising is a significant reduction in the likelihood of your business failing. This relative advantage is based on several factors, including awareness, large-scale marketing, and "tried and true" management and operational practices.

To find out about franchising opportunities in your area, contact the corporate offices for the auto body repair "chains" popular in your state. Be sure to contact them all, and be aware that they may be willing to match or exceed another franchise's offering. Consult an account and/or attorney for specific legal or financial questions.

Of course, there are costs associated with franchising. The end result is that you earn a smaller fraction of what your business brings in, although this depends on your specific franchise agreement. On the other hand, you also avoid costs that can arise when starting your own business and make mistakes that a franchise contract might have prevented.

  • How to research and target market

How to Open an Auto Body Shop (with Pictures)

Conduct a formal market analysis. Check if there is a market for the type of business you want to open. Simply put, a comprehensive business plan helps identify potential problems before they arise. In particular, make sure that there is actually business to be done!

Some of the specific stats to look out for include the number, age, and types of vehicles in the area you're considering. Also, find out which insurance companies are commonly used in the area and how many similar companies you would compete with.

How to Open an Auto Body Shop (with Pictures)

Build relationships with paint and parts manufacturers. Large companies that you may want to work with can provide you with a wealth of knowledge and may even support you. Often these companies provide business development consultants to potential new partners. Some may even be willing to help you with your business plan, as your success could lead to more business for them.

Also, they can help you with marketing. You have access to marketing data and are up to date on new technologies and marketing practices. You will also quickly find help from business partners with the layout and design of your marketing materials.

Build positive relationships with specific employees at suppliers. This will likely help keep the delivery channels you rely on when your store is open running smoothly.

How to Open an Auto Body Shop (with Pictures)

State your marketing intentions. Marketing plans are one of the most important features of a solid business plan. The possibilities are endless: consider flyers, print ads in local publications, and online advertising. When writing about the services and products you offer, describe them as if the reader doesn't know anything about body repairs. In particular, describe how your offering differs from what competitors are already offering.

Reach out to the local auto restoration community. People who frequently work on classic or antique cars often work with body shops. You can even offer discounts to people who are active in these communities, knowing they can be valuable sources of repeat business.

How to Open an Auto Body Shop (with Pictures)

Contact auto insurance agents. Being on insurance company “recommended repairers” lists can prove extremely lucrative. Often people ask their insurance company who to contact for service, especially if they expect their insurance company to cover some or all of the service. By establishing good relationships with these companies directly, you will gain additional customers.

Feel free to be direct. Ask the insurance company representatives how to get you on the list of recommended repair facilities.

  • How to recruitment, registration and certification of shop

How to Open an Auto Body Shop (with Pictures)

Interview and hire employees. While experience is very valuable, it's also important that your employees are trustworthy and courteous. Personal service leads to happier customers, better reviews and more business. Put simply, friendly, happy employees lead to happy customers. Adjust accordingly.

Also include detailed estimates of projected labor costs in your business plan. For example, employer-paid taxes and benefits will likely result in higher labor costs than you would expect based solely on the typical hourly rate for auto technicians.

How to Open an Auto Body Shop (with Pictures)

Register your body shop. You must register your business with the city, state and federal government. Because specific registration requirements may vary, contact your state DMV for information on requirements in your area. Plan to provide proof of ownership or permission to use the facilities where your business is located and proof of appropriate zoning. You also need proof of an official company name and proof of professional association insurance.

How to Open an Auto Body Shop (with Pictures)

Make sure your business is compliant with body shop regulations. Your business generates hazardous waste that affects both the air and water quality around you. Accordingly, you must demonstrate that you consistently comply with both state and federal regulations. The regulations you need to comply with depend on the services you offer in your store, its location and its proximity to community facilities. Visit the Environmental Protection Agency's website for your state's guide to environmental compliance for auto repair shops.

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