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What’s Your Path? Designing an Auto Repair Shop Business Plan That Clarifies Your Vision

Mapping out a business plan and investing in a shop management system like Tekmetric will help you help more people in the long run. Find out how in our step-by-step guide.

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Mapping out a business plan and investing in a shop management system like Tekmetric will help you help more people in the long run.

Starting a business can be a big risk. But if you map out a plan and execute it right, the outcome is well worth it. Having a solid automotive repair shop business plan in place is especially important if you ever plan on owning multiple shops. 

When you realized that you wanted to be a shop owner, it’s likely you considered the good you can do for both yourself and other people. Helping customers get their vehicles back on the road, and helping service advisors and technicians grow in their careers is an exceptionally rewarding aspect of owning and operating a repair shop. 

But in order to provide excellent service and help as many people as possible, you'll have to get your plan in place.

In order to make the ride to becoming a successful shop owner a smooth one, your present self will need to have your future self’s back. You’ll need to ensure all of your ducks are in a row. And by ducks, we mean your people, processes, and systems. And most importantly, you’ll need to make sure that you are ready to take on this venture. 

You may even get excited thinking about the far future of your business—when it’s feasible to expand your business to include multiple shops. It’s good to dream big, and especially in auto repair, more shops means that you can help more people. But it’s important to understand how you’re going to get there, and what pitfalls to avoid. 

Before we jump into how your business can expand, let’s take a look at some of the reasons why new business ventures don’t make it. Don’t let this waiver your goals as a shop owner though. In fact, we’re writing these out so you can beat the odds.

Six Common Reasons Why New Businesses Fail 

  1. Not investigating the market 

When you’re opening up a new business, it’s crucial to consider the demand for auto repair and the unmet auto repair needs within the area you plan on opening shop. It’s easier to satisfy a known need rather than creating a need and having to convince your customers. 

  1. Business plan issues

Your business plan is like your company’s Bible. You’ll spend months, or even years, making sure it is the perfect guidebook for your shop. Once your business plan is created, it’s important to follow it. Taking chances that aren’t outlined in your plan could lead to further setbacks. Although setbacks are less common if you’ve carefully and diligently mapped out your plan, there’s always the possibility that your plan isn’t 100% sound. If that’s the case, determine the issue, find a solution, and adjust your plan accordingly. 

  1. Not enough financing

Financial planning is crucial for any new business venture. If you don’t start off with enough money and end up having to stretch the financial line too thin, it’s possible your business may never get off the ground. 

  1. Bad location, absent online presence, and other marketing issues

The location of your business, the online presence of your business, and the marketing efforts conducted throughout your business’ lifecycle are pivotal to your shop’s success. If you start an auto repair shop that focuses on truck repairs in the middle of a city where there aren’t a lot of truck drivers, it’s likely your shop won’t succeed. The same goes for online presence and marketing efforts. You need to reach the people who may not regularly drive by your shop by considering where they spend their time online. What social media channels are they on? How do they use search engines to find local businesses? Tailored advertising efforts and five-star raving reviews will help bring more business to your shop. Without the best location, an established online presence, and the right marketing strategies, your business has less potential to last. 

  1. Becoming complacent 

Just because you’ve finished up your business plan and started your business doesn’t mean the research should stop there. It’s always important to remain in-the-know on key market trends. By keeping an eye on the auto repair market, you’ll know exactly when and how you need to make adjustments to your business in order to keep growing. 

  1. Expanding too fast 

Sometimes a business owner that is experiencing newfound success may keep reaching and reaching, and reaching, until their finances are drained. While it’s important to have an entrepreneurial spirit, it’s just as important to make smart investments. If you want to open up more shops in the future, it’s important to give your new shop just as much tender love and care as you gave your first location. Make sure you have a solid understanding of where you want your next location to be, who your intended customers are, whether you want to try selling new products or services, and how exactly you plan on testing the success of any new ideas.

According to Investopedia.org, the bottom line is this: “Though the rate of business failure in the first two years is around 20%, it doesn't mean that you have to fail. Through research, planning, and flexibility, you can avoid many of the pitfalls of a new business and be a part of the 25% that make it to 15 years and beyond.”

What Is An Auto Repair Shop Business Plan? 

The best way to execute your business is with a plan. An automotive repair shop business plan will outline your auto repair shop business so that you can present it to investors or any other stakeholders that you want to bring along on your business venture. A business plan is the overall vision of your business, the goals you want to achieve, and the roadmap that will keep your company afloat. 

Your Auto Repair Shop Business Plan Serves as a Roadmap For Taking Your Business Off The Ground 

A clear auto repair shop business plan will provide you with:

  1. Clarity on what needs to be done 
  2. The ability to spot issues as early as possible while making good investments 
  3. A sustainable and viable business model  

Clarity On What Needs To Be Done

An auto repair shop business plan will make it easy for you to explain your business model and where your shop is headed. You’re going to encounter obstacles, and in order to tackle them head on, you need to stick to your strategic plan and adjust accordingly. 

Your automotive repair shop business plan will provide you with clarity on: 

  • Financing
  • Hiring
  • Operations
  • Branding

The Ability To Spot Issues Early While Making Good Investments

To prevent setbacks, you need to invest in the right things. The way you invest prior to opening up your shop, during your business’ lifecycle, and once expansion is on the horizon, will make or break your business.

Your auto repair shop business plan will help you determine the right routes to take when it comes to investing in: 

  • People
  • Process
  • Technology
  • Marketing 

A Sustainable and Viable Business Model

By carefully mapping out your business’ roadmap, you’ll have the ability to achieve a sustainable and viable business model. 

Your auto repair shop business plan will help you: 

  • Secure funding 
  • Know when and how to expand
  • Stick to growth goals and milestones

Each three of these categories can be more attainable with a clear mind. According to Walter Isaacson’s The Book of Jobs, Steve Jobs would often stress that the driving factor behind his creative inspiration was a clear mind through meditation. So, before you get started crafting your quintessential automotive repair shop business plan, try to gift yourself the ability to tune out the noise during important decision-making matters. Here are three ways you can go into your business ownership journey with a clear state of mind: 

  1. Set aside time to commit to a muscle memory activity. A muscle memory activity could be going on a walk every morning with your dogs, heading to the driving range to hit a few golf balls in the evenings, playing an instrument, or picking up a good book. 
  2. Choose an activity that you genuinely enjoy doing and make it a habit. If meditating isn’t for you, you won’t be able to let go of the daily noise and distractions, and in turn you won’t be able to gain clarity of mind. Whatever you choose should be something you look forward to doing so that you can place all of your focus on that activity. Being able to focus is incredibly important for business owners because there are so many things that can occupy your mind in a given moment. Find an activity that helps you organize and become more aware of your thought process. 
  3. Reduce the noise around you by finding an activity that you can do by yourself. Finding an activity that helps you clear your mind and step away from others’ input will help you get back in tune with where you really want your business to go. 

These are just three tips. What works for one person may not work for you. Our primary recommendation for new business owners is to commit to not only working on your auto repair shop business plan but also commit to working on yourself so that when you hit the road, you’re able to face any and all obstacles with a clear, open mind. 

“If you want to be a better leader, you have to become a better learner.” 

- Judi Haglin
Read more about how Judi Haglin leads a successful auto repair business. 

So, What’s Included in an Auto Repair Shop Business Plan? 

There are nine steps to crafting the quintessential automotive repair shop business plan that will help you achieve your business goals—from owning one auto repair shop to becoming a multi-shop owner.   

1. Write an executive summary

2. Describe your shop

3. State your business goals

4. Describe your products and services

5. Do your market research

6. Outline your marketing and sales plan

7. Perform a business financial analysis

8. Make financial projections

9. Create a plan for growth and expansion 

Sure, those nine steps may sound tedious, but it pays to plan. According to entrepreneur masterminds Francis J. Greene and Christian Hopp, high-growth oriented entrepreneurs are 7% more likely to plan out their business. Furthermore, entrepreneurs who write business plans are 16% more likely to achieve viability than entrepreneurs who don’t develop a plan.

What Do You Need to Create Your Auto Repair Shop Business Plan?

You can build a successful launching pad for your auto repair business by conducting market research, developing a marketing plan for your auto repair shop, and evaluating the operational costs and investments you will need to make. 

 Conduct market research

Here are four steps you can follow to successfully conduct local market research: 

  1. Determine your shop’s market area 
  2. Create a profile of your shop’s ideal customers 
  3. Determine the size of your market (pro-tip: check out City-Data for a detailed, informative profile of your target market). 
  4. Find out how many competitors are in your target market area

Remember that drivers are typically willing to drive a few miles to get their vehicle serviced, but driving over 10 miles might not be realistic for someone if their vehicle has an issue. So you may want to start looking at the demographics within a 10 mile radius of your auto repair shop. 

When looking at your target area, you can ask the following questions to get a good sense of your business’ market: 

  • Is there a desire for your products or services? 
  • How many people would be interested in your offering? 
  • What is the income range and employment rate of your customers? 
  • How many similar options are already available to consumers in your area? 
  • How much do potential customers pay for these alternatives?

Even after you open shop, keep conducting market research. You want to be able to keep up with the latest auto repair industry trends so that your shop’s profits keep growing. Getting a feel for the type of customers your shop serves will set a strong foundation for your auto repair shop business plan. 

Develop a marketing plan for your auto repair shop

Once you know your audience, develop a marketing plan that aligns your vision with the people you plan on serving. Here’s an overview of marketing strategies you can use to attract customers to your new shop: 

  1. Get involved in your community
  2. Run special promotions for first-time customers
  3. Partner up with an adjacent local business like a body shop
  4. Advertise locally
  5. Run targeted social media ad campaigns
  6. Up your shop’s search engine optimization (SEO) game

Evaluate operational costs and investments

When it comes to successfully launching your business, you’ll need to weigh any potential costs and investments that you intend on making. Always leave a bit of wiggle room for unexpected expenses, like hiring one more person that you anticipated, or paying a little extra for a more reliable shop management system. Sometimes spending a little extra means getting a higher return on investment, making it well worth the cost. But you have to ensure that you have the wiggle room first. 

The investments you put into your shop at the beginning will play a huge role in determining how profitable your auto repair shop will be in the future. You’ll want to evaluate: 

  • The location you will operate your shop from
  • The equipment you will invest in 
  • The shop management system that will support you from day one and beyond 

The right shop management system will give you and your team: 

-
The ability to gain experience 
-
A methodical system for analysis
- Digital tools and integrations
- Guardrails that prevent errors
- The ability to track declined jobs
- Better compliance standards
- A workflow to quickly build accurate estimates
- A direct tie to all shop systems
- The capacity to set and reach profit goals
- A clear framework for enhancing customer experience

But before we get too excited about finding the right shop management system, here’s the moment you’ve been waiting for: the nine steps you can take to craft an automotive repair shop business plan that will help you reach new heights and open up more shops in the future.  

1. Write An Executive Summary

Your business plan’s executive summary is designed to capture any investors’ or stakeholders’ attention. It gives them an overview of your shop’s business opportunities and an overview of the rest of your auto repair shop business plan. 

In your executive summary, you will briefly explain the problem you are solving, your business ideas, the target audience, and any key financial information. Your business plan’s executive summary should capture each of the aforementioned topics in no more than two pages

The problem statement: this introduces the reader to the gap and/or problem in the auto repair industry that your business aims to solve. 

The business statement (aka your business model): this will show the reader exactly how you plan to tackle the problem—both how you plan to approach the problem and how you plan to solve it. During this section, you want to briefly explain how your auto repair business will help solve whatever problem you found in the market. 

The target audience statement: during this section, you’ll map out any customer demographic details and how you plan on targeting these audiences. 

The financial plan summary: any financial institution or investor you approach will want to know how you plan on spending their funds. During this section of the executive summary, you want to cover where you plan on allocating funds and any applicable financial projections. 

Find a Shop Management System That Will Make Tracking Your Shop’s Financial History a Breeze  

For those of you who are current shop owners and want to craft a new automotive repair shop business plan, the financial plan in your executive summary will have to include a history of your shop’s past financial performance. 

With Tekmetric, you can use accurate, real-time data to easily track how money flows through your shop. Tekmetric’s Real-Time Financial Reports include three reports that are particularly useful during this step of your auto repair shop business plan: 

1. End of Day Report 

The End of Day Report is an overview of how effectively your shop has been selling repair work during a given time range. You can select what time range you want to view a financial report for. The End of Day Report breaks down your shop’s overall shop metrics, including Total RO’s, Hours Presented, Hours Sold, Close Ratio, Effective Labor Rate, Average Repair Order (ARO) Sales, ARO Profit, ARO Profit Margin, Gross Sales, and Gross Profit. 

2. Profit Details Report

The Profit Details Report will show you the exact profit you’ve made across all of your shop’s ROs. A perk to the Profit Details Report is that you can also break it down even further to show the profit your shop has made within individual ROs. 

3. Sales Details Report 

The Sales Details Report will show you how much your shop has sold in parts and labor over a given time range, how much money has been collected from sublets, fees, and taxes, as well as the dollar amount of the discount your shop has provided to customers. 

2. Describe Your Shop

What makes your business stand out? What’s your company’s mission? What are the most important aspects of your business? These are the questions this section of your auto repair shop business plan will answer. 

When determining your shop’s mission statement, try to keep the following tips in mind: 

  1. Make it a long-term mission statement 
  2. Think big picture and high level  
  3. Keep it short and concise
  4. Use “Our” and “We” when writing your mission statement. For example, “We provide the highest quality repair services to the drivers of East Omaha, Nebraska”
  5. Work with your potential stakeholders and/or employees to come up with your mission statement
  6. Don’t be afraid to change it 

Let’s take a look at ten popular mission statements. If you can think of the company’s name, then their mission statement did its job. 

  • “To bring inspiration and innovation to every athlete in the world.*

*If you have a body, you are an athlete.”

  • “To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.”
  • “To inspire humanity—both in the air and on the ground.” 
  • “To accelerate the world's transition to sustainable energy.”
  • “Spread ideas.” 
  • “To give everyone the power to create and share ideas and information instantly, without barriers.”
  • “To organize the world’s information and make it universally accessible and useful.”
  • “We save people money so they can live better.”
  • “To be a company that inspires and fulfills your curiosity.”
  • “To build and deliver an integrated set of digital tools that complement one another and empower shop owners to grow a thriving automotive repair business.”

In order from top to bottom, the mission statements belong to Nike, Warby Parker, JetBlue, Tesla, TED, Twitter, Google, Walmart, Sony, and Tekmetric. 

What do each of the above mission statements have in common? They uncover the primary existence for each company, and they deliver their purpose and overall intention. 

As you’re developing your automotive repair shop business plan, think of ways your auto shop can stand out in your community. If you want a good example, check out our Shop Spotlight of Turbo Tim’s Anything Automotive. Turbo Tim’s shop owner Tim Suggs crafted his shop around a unique and relatable culture that gives back to the community. Their focus is on “average cars, average people.” 

“Early on, it was apparent that if I put people first, the money would come. I focused on building an atmosphere that was both fun and professional for employees and customers alike. One of the most instrumental, yet unintentional, parts of our culture came from a cat I found at a machine shop. I’ve always been a cat person, and I asked the technicians there if that was their cat. They said it was a stray that they regularly fed. After checking that he wasn’t microchipped and didn’t belong to anyone, I brought him home with me.

And that’s the origin story of Bobby, our original shop cat. We now have multiple cats who greet folks in our waiting room. Bobby also positively affected our marketing. Halfway through our growth, we began branding ourselves with a cat logo inspired by Bobby. Today, customers who put Bobby bumper stickers on their cars get 10% off for life. Less productive are our chickens, who ‘work’ in the chicken coop on our outdoor patio.” 

When you describe your company in your auto repair shop business plan, you want to unveil what you see your shop being. Yes, you’ll want to mention the mission, but you also want to capture your shop’s values and culture, and what sets your shop apart from the rest.  

Invest In a Shop Management System That Allows Room For Integrations 

Tekmetric partners with other industry-leading solutions to let shop owners fine-tune the repair experience for their team and their customers. 

- We partner with Mechanic Advisor to bring your customers’ real-time scheduling
- We partner with Shop Owner Coach to bring your shop personalized coaching and training
- We partner with Advance Auto Parts so that your team can easily find a good deal on a wide selection of parts
- We partner with BG Products, Inc. so that you easily provide high-quality maintenance to customers
- We partner with MyShopManager to ensure your shop’s marketing communication leads to higher customer engagement
- And that’s just five out of 30+ integration partners your shop can choose from. 

See how the right mix of automotive computer programs fuels business innovation. 

3. State Your Business Goals

The next section of your auto repair shop business plan is where you should state your business goals. Here you’ll want to list out the short-term, medium-term, and long-term goals that you want to achieve with your business. 

  • Short-term business goals: these business goals are to be accomplished in no more than one year. 
  • Medium-term business goals: these business goals should be completed in more than one year, but less than five years. 
  • Long-term business goals: these business goals are what you want to accomplish in five years and beyond. 

As you’re coming up with your shop’s goals, you need to make sure that they are realistic, attainable, and strategic. Ask yourself these six questions as you come up with your business goals: 

  1. Why is this goal important?
  2. Can we achieve this goal?
  3. What can impede or stop us from achieving this goal? 
  4. If we set this goal, what are the action steps? 
  5. If we meet this goal, how do we take it to the next level?
  6. If we don’t meet this goal, how do we rebound? 

Now that you have those six guiding questions, you can start to come up with your shop’s unique business goals. Ask yourself the following questions to help you come up with your company goals: 

  • Why do we do what we do?
  • Where do I see my business this year, next year, and five years from now?
  • What are we selling beyond auto repair?
  • How do we feel about the problems we solve?
  • What values do we want to stand by no matter how big we grow? 
  • What do our customers want?
  • Which promises do we want to make? Which promises can we keep? (Only make promises that you know that you can keep) 
  • What do we need to do today to make sure that we can keep doing the things we want to do tomorrow? 

Whether your goal is to have a 20% profit margin year one or open up a second location in the next five years, the business goals section in your automotive repair shop business plan will help you remember why you set that goal in the first place. 

Choose a Shop Management System That Makes it Easy to Reach Your Goals

If your goal is to increase your sales and ARO, then you’ll like Tekmetric’s Digital Vehicle Inspection (DVI) feature. Tekmetric’s DVIs are designed to inform and show your customers exactly what’s going on under the hood. And the better you can explain vehicle issues, the more likely your customers will be on board with getting the recommended repair work done. 

Tekmetric’s DVIs include six core features that will benefit both your team and your customers: 

1. A searchable DVI history  
2. The ability for technicians to attach photos and videos to inspections
3. A color-coded system that indicates the severity of inspection findings
4. A direct tie-in to parts and labor data when building estimates
5. The ability to add canned jobs when building estimates
6. Digital authorization for jobs
7. A declined jobs report that automatically saves and tracks declined jobs

See what else Tekmetric’s DVIs can do for your shop. 

4. Describe Your Products and Services

In the products and services section of your auto repair shop business plan, it’s important to focus on your customers’ perspective and needs. The overall goal of the products and services section is to prove that your shop will fill a market need and remain viable. 

Here are some questions you’ll want to answer in this section:

What kind of vehicles will your shop fix?

Do you want to run a general auto repair shop or a specialty auto repair shop? You can determine whether your shop will focus on exotic vehicle repairs, diesel engine repairs, fleet work, or stick with the standard independent garage clientele. 

‍What type of services will your shop provide?

Along with determining the kinds of vehicles you’ll service, you’ll also want to consider each service your shop will provide. Will your main focus be on oil changes, tune-ups, and regular maintenance? Will you want to sublet some of your repair work? It could be that you focus on standard repairs, but when a customer comes in with a specific job that you don’t want to turn down, you can have that repair work done through a subcontractor, but you’d have to establish that partnership

How will your shop’s name and brand clarify your audience and services?

Your shop’s main focus may be something you’ve already thought of, but what about your shop’s name? It’s a good idea to choose a name that speaks to your shop’s target customers and the types of services you provide. For example, Bavarian Motor Repairs specializes in servicing BMWs, MINIs, and Rolls Royces. Performance Transmission & A/C Automotive Repair specializes in servicing transmission or A/C related malfunctions. Or maybe you want your shop to cater to everything auto repair related like Ultimate Auto Repair or Turbo Tim’s Anything Automotive. 

What types of products will your shop provide?

Knowing the types of vehicles and services your shop will provide to customers is great, but what about the types of products you plan to sell to your customers? Many shops choose to sell specific types of fluids that their customers can rely on. Similarly, shop owners may sell products and equipment that can make their customers’ vehicles last longer and perform better. You can also offer products that make for an easy upsell such as air fresheners, floor mats, or even merchandise with your shop’s logo on it.  

Find a Shop Management System That Expedites The Parts Purchasing Process 

Tekmetric’s Canned Jobs Board pulls from inventory to see what parts you already have on hand and what parts you need to purchase. You can also set a parts markup on inventory items that are added to canned jobs so that you can lock in your parts margin. This addition to your parts management strategy will cut out all the guesswork and streamline jobs. Your team can save time sorting through parts and spend it actually repairing vehicles and providing excellent customer service.

In Tekmetric, you can view and sort canned jobs by:

- Job titles
- Job totals
- Job category
- Labor Rate

To make your parts purchasing experience even easier, Tekmetric has partnered with some of the most trusted parts vendors in the industry: 

- AdvancePro
- MyPlace4Parts
- Nexpart
- OEC Repair Link
- PartsTech
- WORLDPAC

5. Do Your Market Research

You probably did some market research when you first began forming your business plan. But as you write this section, you’ll really want to sharpen your market research and organize your findings.

There are two main types of market research that you can do when planning your business. 

Primary Market Research: any type of research that you collect yourself. Examples include surveys, interviews, and observations. 

Secondary Market Research: any type of research that involves compiling existing data. Examples include searching websites, going to libraries, looking at government statistics, or even using internal resources like your shop’s average revenue per sale, customer retention rates, and any other historical data you see fit (this is especially useful for current shop owners looking to expand). 

To successfully conduct market research, you should follow these fives steps: 

  1. Determine the purpose of your market research

Before starting your market research, determine your goal for doing it in the first place (aside from creating the business plan, of course). Common reasons why business owners conduct market research include wanting to understand a new market or to gauge the success and strategies of competitors. 

  1. Research the current state of the auto repair industry

Look at where the auto repair industry currently is and where it seems to be heading. The goal here is to determine any potential trends and projected growth that can give your business a competitive edge in the auto repair industry. Check out Ratchet+Wrench for the latest auto care insights, or the Tekmetric Index (TM-500) for economical trends from 500 auto repair shops across North America and Canada.   

  1. Define your buyers’ personas, aka “marketing personas” 

Creating buyer personas will help you understand who your customers are. Your buyer personas should include age, gender, location, job titles, family sizes, incomes, needs, interests, etc. Keep in mind that as you build out your buyer personas, you don’t have to limit yourself to just one persona. There are many different types of drivers and people that need auto repair services. 

There are many useful tools you can use to develop your personas. Here is HubSpot’s free tool that might come in handy while you’re building your personas. 

  1. Understand your competition  

To understand your competition, we recommend listing out each of your shop’s competitors. From there, determine what those shops do differently from what you plan to do. Consider their strengths and weaknesses, and any advantages they have in the auto repair market in your area. You can also do a SWOT analysis where you determine their strengths, weaknesses, opportunities, and threats. It’s also good to do a SWOT analysis of your own business, too. 

  1. Gather, analyze, and summarize your findings  

Any information you find during your market research will be your friend. You can never have too much data—as long as it’s from a credible source. Here are some resources you can use for credible research: 

When it comes to analyzing your market data, it’s best to organize it all into sections that make the most sense to you, your stakeholders, and your investors. The main topics you want to focus on are your shop’s purpose, the target market, and your competition. Examples of elements within your market research analysis can include your customers’ buying trends, forecasted growth, how much customers are willing to pay for your services, and an industry overlook, including the industry’s size and growth rate. 

Invest in a Shop Management System That Tracks Your Customers’ Historical Data 

Tekmetric’s customer reports help keep your market research fresh. You can see which service you sell is the most popular and who your most frequent customers are. You can also get more accurate data about different customers’ buying behavior when you start generating with Tekmetric’s customer reports. 

Customer List Report: Tekmetric’s Customer List Report gives you an overview of each customer’s Lifetime Visits, Lifetime Spend, Lifetime Profit, Lifetime ARO, Lifetime Close Ratio and other key stats.

Declined Jobs Report: With the Declined Jobs Report, service advisors can see all jobs that have been declined on past ROs so that they can get them back in the shop. Identify which jobs are declined most often so that you can create effective promotional campaigns that upsell, cross-sell and improve your Close Ratio.

6. Outline Your Marketing and Sales Plan

After conducting market research and deciding on the products and services your shop will provide, you can work on your marketing strategy. Your marketing strategy should specify how you plan on marketing different services and products to different demographics. 

For example, if you decide you want to focus on diagnostics for BMWs, then your marketing plan will show how you plan to target BMW owners for that particular service. Maybe you could go find BMW groups or figure out where BMW owners like to shop or frequent, and advertise there. 

A strong marketing and sales strategy will help your shop maximize and leverage profits. Marketing expenses are something you need to invest in, but you also need to ensure that you’re getting a strong return on your marketing investments. 

Here are a few examples of impactful marketing strategies: 

  • Website branding
  • Local reviews
  • Social media campaigns
  • Email marketing
  • Content marketing
  • Referral program
  • Reward program
  • Pay-per-click ads
  • Print and physical marketing

Whatever marketing efforts you choose to invest in, make sure you track the data so you know what works and what doesn’t. 

Choose a Shop Management System That Helps You Refine Your Marketing Strategies

A shop management system like Tekmetric can show you whether or not your strategies are working. 

Marketing Source Report: You can track the payoff that each marketing strategy brings your shop by using Tekmetric’s Marketing Source Report. With the RO Marketing Source Report, you can explore how much of your business comes from new sales or repeat sales, and identify which marketing sources are bringing in the most business. 

Integrations:
Tekmetric integrates with several marketing solutions that will help your shop further grow its customer base. Our marketing integrations include Mechanic Advisor, KUKUI, MyShopManager, MechanicNet, RepairPal, and more.

7. Perform a Business Financial Analysis

In the financial analysis portion of your auto repair shop business plan, you want to unpack how much money your shop will need to get off the ground and exactly how you plan on spending it. 

Some common capital and startup expenses include: 

  • Rent or lease payments
  • Utilities costs such as telephone and internet, electricity, heating, etc.
  • Maintenance costs such as mending leaks, maintaining equipment, snow plowing, landscaping services, etc.
  • Taxes, including state income tax, property tax, payroll tax, sales tax, fuel tax, etc.
  • Office equipment such as computers, printers, tablets, desks, chairs, etc.
  • Marketing expenses
  • License renewals
  • Lobby supplies such as water, coffee, snacks, etc.
  • Employee appreciation such as gifts, holiday outings, meals, team bonding, etc.
  • Ongoing training and education opportunities

Another key component to your financial analysis is your break-even analysis. A break-even analysis is when you factor in both your costs and your shop’s sales to determine the moment you will break even. 

This article from Nuvest does a great job explaining how you can calculate the break-even point for your auto repair shop. 

So, what is a break-even point? A break-even point is when your business will begin making a revenue that should cover your total amount of overhead costs—both the fixed and variable costs accumulated over time. 

Break-Even Point Formula: 

(Overhead Costs + Balance Sheet Payments) / Gross Margin = Break-Even Point

For example: ($30,000 + $10,000) / 95% = $42,105.26

In the example above, it concludes that you need to sell a total of $42,105 to make sure that you cover your overhead costs and balance sheet payments.

Choose a Shop Management System That Can Assist in Managing Your Shop’s Common Expenses   

‍While Tekmetric can help you track the cost of goods through reports, your accounting tools such as QuickBooks, is where you’ll track a lot of your daily expenses. Tekmetric doesn’t include a built-in accounting system, but we do have an accounting link through one of our integration partners, The Back Office, which gives you the ability to manage your books, track income and expenses, and easily perform audits for all your accounting needs with just a few clicks.

Tek-Tip: improve your profits and fine-tune your shop’s goals with Tekmetric’s built-in Parts Matrix and Labor Matrix. Tekmetric makes it easy for shop owners and service advisors to include the right markups on each and every job. 

“At the end of the day, the world runs on math. If you don't know what the math is, you don't know what you're doing; you have no clue whether you made money or whether you lost money. You're just throwing quotes out there and hoping you make a profit. With Tekmetric, I can see in real time what my markup is, what it's going to be, and what it should be to reach our goals. I can give my service writers a bottom dollar: what they need to sell it for. And they can quickly see all that right in Tekmetric.”

-
Karl Roekle, Owner of Ultimate Auto Repair
Name of Section What it should include
Projected profit and loss statement (P&L)
  • Turnover rate
  • Growth rate
  • Cost structure
  • Expected profitability
Projected balance sheet
  • Value of the company’s assets during a given time
  • Value of assets (what the company owns)
  • Liabilities (What the company owes to suppliers, lenders, etc.)
Projected cash flow statement This statement should cover your company’s cash flow and help determine if your shop can generate enough cash to repay loans, equipment renewals, etc.
Initial financing plan This section should provide an overview of the resources needed to launch your auto repair shop and the cost of those resources.

According to Entrepreneur.com, here are some ways you can make financial forecasts more realistic: 

  1. Use at least two financial projection scenarios. One can be more optimistic and the other can be more cautious. It’s best to err on the side of caution while also making space for the optimistic predictive forecasts that new and aspiring business owners are prone to make. 
  2. Predict your expenses first, then your revenues. 
  3. Identify and include assumptions that are outside of your control, including how much you predict the market will grow, any possible changes in the competitors you’ve found, and any advancements in technology that could impact your business. 
  4. Assess, reassess, and reassess again. Forecasts shouldn’t be stagnant. The more up-to-date your forecasts are, the more prepared you will be to make informed strategic decisions.
Invest in a Shop Management System That Lets You Categorize Reports into Different Time Periods 

Tekmetric’s real-time reports empower shop owners to forecast and strategize by choosing between annual and weekly forecasting. 

Annual Forecasting: With annual forecasting, you can get a sense of where your shop is at and how the rest of the year is likely to play out. If you notice that business is slowing down month to month, it might be time to adjust your marketing strategies. Or maybe you notice that the year has been busier than usual, in which case you may want to consider bringing on more talent to help service your new influx of customers. 

Weekly Forecasting: With weekly forecasting, you can combine sales in progress with closed sales data to get an idea of how much profit your shop is lined up to make by the end of the week. 

Read more about how you can forecast with real-time reports.

9. Create a Plan for Growth and Expansion 

Although this section isn’t necessarily a part of a standard business plan, you’ll want to incorporate it into your automotive repair shop business plan if you eventually want to open additional repair shops. 

To prepare yourself for future growth, you’ll want to ensure that 1) the auto repair shop business plan you’re creating now can be replicated if all goes according to plan and 2) the shop management system you select can grow with you. 

If you play your cards right—or in this case, you craft the optimal automotive repair shop business plan and invest in foundational tools—you’ll be well on your way to becoming a successful owner of multiple auto repair businesses. 

Steps to Growing Your Auto Repair Business How Will Your Auto Repair Shop Business Plan Have Your Back? How Will Tekmetric Have Your Back?
1. Get your shop’s operations down Your auto repair shop business plan will help your original shop be stable, profitable, and run smoothly thanks to the diligent planning you’ve done. With the right automotive repair software, you can carefully stabilize your shop’s operations and monitor where you’re at in terms of profitability, customer retention, and current and future challenges.
2. Map out decisions that align with your goals. Your auto repair shop business plan will help your first location reach desired profitability rates, stabilize profits, and replicate—or enhance—your shop’s strategies. Tekmetric will help you handle the increased volume of customers and team members that additional locations will bring. With the ability to create aggregate reports, Tekmetric will also help you track each of your shop's metrics to see what works, what doesn’t, and how you can leverage profits across your entire business.
3. Put your changes into practice. You may have to alter your auto repair shop business plan to fit the needs of the new location. With each new location, it’s best to follow the first 8 steps we went over in this guide. Crafting an auto repair shop business plan for each location you open will help you maintain that clear mind mentality you adopted the first go-round. Tekmetric will grow with you, and help you and your team create the same positive customer experience across the board. By using Tekmetrics’s Financial Comparison Report, you can see how changes at each shop impacts sales and other key performance metrics. Furthermore, you can use the Financial Comparison Report to test out new ideas at one shop to see what works and what doesn’t for each of your business locations.
4. Expand into new territories. Once you’ve mapped out your vision with several auto repair shop business plans, you’ll be able to fine-tune each of your business ventures, especially if you select a shop management system that can grow with you. Tekmetric’s pay-per-roof pricing model is optimal for shop owners with multiple locations. No matter how many shops you open up, you have the ability to add as many team members to them as you need. Tekmetric also stores customer information across all shop locations. If a customer who goes to one shop chooses to try out another location one day, their information will be securely stored for that location’s service advisor, creating a consistent and seamless experience for that loyal customer.

Tekmetric: Your Shop’s Go-To System For Present-Day Planning and Future Expansion 

Just as your automotive repair shop business plan will help you navigate any potential setbacks, the Tekmetric shop management system will help you hammer away as you grow your business.  

The right planning and shop management system will help you determine—in advance—things that can help you achieve your goals, as well as avoid things that can potentially prevent you from achieving those goals. 

Tekmetric will: 

  • Make tracking your shops’ financial history a breeze
  • Allow room for integrations 
  • Make reaching goals easier
  • Expedite the parts purchasing process
  • Help you track your customers’ historical data
  • Help you refine marketing strategies
  • Assist in managing your shop’s common expenses   
  • Empower you to make financial decisions for future growth
Let’s Recap…

To successfully create your auto repair shop business plan, you need to: 

1.
Conduct market research
2. Develop a marketing plan for your auto repair shop
3. Evaluate operational costs and investments

The 9 steps to crafting an auto repair shop business plan are:  

-
Write an executive summary
- Describe your company
- State your business goals
- Describe your products and services
- Do your market research
- Outline your marketing and sales plan
- Perform a business financial analysis
- Make financial projections
- Create a plan for growth and expansion

Not only will investing time into planning help your vision come to fruition, but it will also help you achieve the dream you stood by since day one: helping your customers get their vehicles back on the road safely. 

Mapping out an auto repair shop business plan and investing in a shop management system like Tekmetric will help you help more people in the long run. 


Make Your Vision a Reality With a Clear Business Plan and a Supportive Shop Management System 

At Tekmetric, we don’t mess around. We know how hard you’ve worked to get to where you are now—no matter where you’re at on your repair shop owner journey. So, when we say we’ll help you unleash your potential, we mean it. 

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