How to Start an Auto Repair Shop (7 Step Guide)

Kick start your mechanic shop success by following our 7 tips for creating an auto repair shop business. Build a business where you and your team thrive.

How to Start an Auto Repair Shop (7 Step Guide)
Updated on:
June 24, 2024
Originally published on:
May 22, 2023
Start an auto repair shop where you, your customers, and your team wins by reading our 7 tips for opening an auto repair shop business.

Success isn’t something that happens overnight. While the early days of opening an auto repair shop can be exciting and fun, you’ll have a much easier time of reaching your goals if you map out your path and plan ahead.

Having a few best practices to fall back on and keep you motivated can help minimize roadblocks. And leveraging a high-performance shop management system right out of the gate can really help you gain momentum as you start an auto mechanic shop.  

A shop management system like Tekmetric gives you the power to check in on work in progress, unite your team, gain performance insights, and provide memorable customer service from your opening day forward.

As you prepare to start an auto repair shop, reflect on these seven tips and consider adding Tekmetric to your strategy to take your business even farther.

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1. Start Auto Repair Shop Success by Finding Your Niche

So you’ve got your vision of a dream shop in your head, and you’re revved up to start an auto mechanic shop. In the months and weeks leading up to your grand opening, you’ll have to make many business decisions that determine the course of your shop’s future.

It’s important to create a detailed auto repair shop business plan so you have solutions in place to overcome challenges and continue advancing your goals.

One part of your plan should be to plot out how your shop will differentiate itself from others. You can model your shop off of other great shops you’ve worked at or learned about, but at the end of the day, each shop has to cater to a specific audience. So what is it that will make your shop unique?

What’s your niche?

Market research will help you position your business as you start a mechanic shop.

Determine the focus of your repairs

Do you know what kind of repair work your shop will focus on? Maybe you only want to provide oil changes and regular maintenance. Or it could be that your auto repair shop business model is built around specialty work like engine rebuilds or fixing classic cars. Past experience, local demand, and gaps in service can help you decide where to focus your efforts.

The type of shop you decide to run is going to impact everything else about your shop from who you hire to what tools you buy, so determining the type of work you want to focus on is a great place to start.

Think about the capacity of your shop, too. Make sure your shop is sized appropriately and that each bay is designed for the types of vehicles and work you’ll be doing.

Know your cars and clientele

One way to make your shop stand out is to focus on repairing specific types of vehicles. While there is nothing wrong with serving a wide variety of automobiles, specialization tells a specific customer base that their needs are your priority.

  • If you have a particular kind of car and repair work you want to focus on as you start an auto repair shop, be sure your auto repair shop business plan reflects that.
  • A mom and pop shop might work on a broader range of cars, for instance, but the cars will also be older and most of your clients will be families looking for a good deal.
  • If you’ll be focusing on Japanese cars, hire techs certified to work on car brands like Toyota and Honda.
  • If you’re preparing to start an auto repair shop focused on European cars, clients may be willing to pay more money since the cars that come in for service and repairs will likely be more expensive.
  • Luxury vehicle customers may have a strict “handle with care” attitude and expect concierge treatment as opposed to the more laid-back atmosphere of a neighborhood garage.

Know your neighborhood

Success is also about finding the right location for your shop. If you want to start an auto repair shop that focuses on repairing SUVs and trucks, but you don’t see people driving a whole lot of those vehicles on one side of town, you may want to look for another spot to build your shop.

What repair work is already being done in the area? Is there room and demand for competition, or would you be better off focusing on another category of automotive repairs?

Also consider:

  • Cost of living data as it will determine your customers’ spending power
  • Population density and size. Smaller towns might not be able to support larger shops and teams unless you’re the only shop in town. Suburban and metropolitan areas offer more room for growth.
  • Shop rental costs and availability.
  • Property prices. If you’ll be building or buying a shop, set a budget and stick to it. If one area is priced out of your range, find another one nearby that is cheaper.

2. Get the Right Advice on Running a Repair Shop

When you are planning to open a mechanic shop, consulting with other auto repair professionals can save you lots of time and money.

Tauto repirhink about it this way: if you surround yourself with shop owners and business coaches as you formulate your auto repair shop business plan, they can help you avoid common and costly obstacles and mistakes.

Experienced peers will also push you to think critically and make realistic decisions.

It’s great to have family, friends, and team members cheering you on and sharing in your excitement, but everyone needs guidance, too.

Find a trustworthy attorney and accountant

Two critical resources as you start an auto repair shop will be your attorney and your accountant.

Plenty of attorneys and accountants specialize in auto mechanic shop consultancy and can best advise you of the laws, requirements, and best practices for running an auto repair shop.

Some of the legal steps to setting up your business may seem pretty common sense, but with so much going on as you plan to start your shop, consulting with an attorney and an accountant will help you check off each step faster and ensure you don’t run into major legal or financial issues down the road.

Ask around in your community for referrals to well-established and reputable firms.

Your lawyer will help you:

  • Set up your LLC
  • Set up your DBA
  • Determine applicable safety laws for your shop
  • Set up contracts, releases, and other necessary legal documents

Your accountant can:

  • Advise you on choosing the right insurance
  • Help you choose a reputable lender and determine a reasonable loan amount to request
  • Set up and maintain your books and tax registration
  • Audit your accounts
  • Get you ready for tax season
  • Help you find a reputable payroll service
  • Choose a bank, open an account, order checks, and set up company credit cards

Two financial advisors that Tekmetric works with and recommends are:

Find a mentor

You probably have a hero that first sparked your love of cars. Maybe it was a larger-than-life uncle who owned a shop when you were a kid, and you still tell stories about how he could fix anything that came into the garage.

But now you need a mentor.

Managing a shop is hard work and requires extreme dedication. Having someone in your corner to encourage you when times get tough can keep you moving forward with your dreams.

Go to auto repair industry conferences, talk to shop owners online, or just hang out with other shop owners in your area to learn more about what it takes to succeed. Your professional life will be richer for it, and you’ll build a better shop.

Here are a few coaching groups that we recommend checking out:

3. Start a Mechanic Shop with the Right Branding

A successful brand speaks to your personality and your customers’ interests and needs.

Cars are typically a customer’s most valuable possession second to their home. Leaving a car in someone else’s hands requires a little vulnerability and a lot of trust from your customers, meaning your brand has to inspire immediate confidence that your team will do a good job.

Branding doesn’t have to be too complex when you start an auto repair shop, but you do want a brand that stands out and sticks in the minds of your customers.

Common & important mechanic shop brand assets include:

  • Business cards
  • A simple but professional logo
  • A color scheme for your shop
  • A unique but professional domain name that accurately describes your shop’s focus
  • Emails that match your web domain name
  • A simple, informative, and easy-to-navigate website
  • An entry on Google Business that includes a description with relevant search engine optimization terms to increase visibility in searches
  • Social media accounts on Facebook and Instagram
  • A simple marketing campaign that may include word-of-mouth promotion, flyers, paid Google or Facebook advertisements, or an ad in your local newspaper

4. Select a Shop Management System That Will Keep You Organized

You may have worked in shops where pen and paper or spreadsheet records were the norm, but both systems can be a major detriment to efficiency. When you do everything by hand or on Excel, there are few guardrails against error.

Both Excel and paper record keeping strategies require significant time to keep organized, and neither system directly ties every process of your shop together, so service advisors must constantly rewrite information.

And because those methods of record keeping don’t automatically generate reports, you’ll have to spend extra time crunching numbers to understand your finances.

Modern Shop Management Systems

Shop management systems offer a centralized system for organizing information and help with reporting, record keeping, workflow, communication, and sales.

Cloud-based shop management systems take efficiency one step further by letting you access your shop’s data from any device with internet access without any danger of records ever getting lost or disorganized.

The right shop management system helps you plot a course to success and provides critical tools for decision making, customer service, and team cohesion, all in one place.

Shop management systems like Tekmetric combine transparency, visibility, a better customer experience, a streamlined workflow, real-time reports, and intuitive design to truly let you manage your shop with freedom and flexibility.

You can use Tekmetric to easily search and analyze data, track important metrics both granular and macro, and adjust and sort how performance metrics are displayed. When you start your business with Tekmetric, you’ll be able to keep an eye on ARO, Close Ratio, GP Dollars, and more from opening day.

5. Organize your Dream Team with a Shop Management System

A stellar team is the cornerstone of your auto repair business. And a great way to lead and organize your team is with a shop management system.

From the Job Board and Tech Board in Tekmetric, your team can see all repairs that are going on at the shop, and you and your service advisors can manage who is doing what at any given time.

Execute brilliantly timed plays together, and work in harmony without micromanaging or interrupting one another.

With Tekmetric, your workflows for estimates, work authorization, parts ordering, work assignment, invoicing and payment all intuitively come together, letting your team spend minimal time away from helping customers.

You’ll also be able to set clear expectations, check progress, and reassign or prioritize work as needed.

You’ll even be able to set up all the preferences like markups, parts providers, shop contacts, and employees ahead of time.

Using a shop management system from the time you start an auto mechanic shop also means that everyone you initially hire will learn how to use the system at the same time.

Across-the-board training from the start puts everyone on the same page. When you leverage your shop management system, you can lead your team to greatness.

6. Impress Your Customers and Provide Exceptional Service

Helping people safely get back on the road is probably the most rewarding part of starting a mechanic shop.

You might feel that your auto repair shop business plan has you ready to do just that, but no matter how much you plan, success and profit still depend on your customer service and the quality of service you provide.

The stress of getting the customer experience just right can make opening your shop a bit overwhelming. If you’ve spent a lot of time wondering how you can offer customers a personalized, trustworthy, convenient auto repair experience, Tekmetric offers many features and settings that can help out.

Personalize Each Visit

Tekmetric lets you set up profiles for new customers and record important information about them to help you keep in touch, greet them, remember special details like birthdays, or stick with specific service preferences.

Once a customer’s profile is established, your service advisors can look back on past jobs to know what work needs to be done. Everyone likes to feel special, and with Tekmetric, your service advisors can make each customer interaction meaningful, memorable, pleasant, and unique.

Build trust with customers by using digital vehicle inspections (DVIs). With Tekmeric’s DVIs, your techs will be able to show customers exactly what’s wrong with their car by uploading high resolution photos and videos that help customers better understand why your shop is recommending certain repairs.

Build in Trust During Every Interaction

Keep that trust going throughout the service experience by messaging customers directly from Tekmetric with updates about how the repair work is moving along.

Convenience and flexibility are right behind trust in terms of customers’ needs when they bring in their vehicles.

No one wants to sit around at the shop for hours waiting for repairs to finish up, and that’s totally impractical for larger repairs that may take multiple days. Customers lead busy lives, and may not even have time to pick up the phone.

Tekmetric provides a modern, flexible customer experience for approvals and communication with guests.

  • With Tekmetric’s digital authorization, you can quickly collect approvals for estimates and begin repair work. You can also keep in touch throughout repairs with quick texts sent straight to customers from the Tekmetric interface.
  • Tekmetric’s true two-way texting integration, you can take customer care one step further and text back and forth without having to call or email to answer their questions. And with Tekmerchant, customers can pay straight from their phone when service is finished.

Tekmetric lays the groundwork to keep customers coming back and recommend your shop to their friends and family.

7. Manage and scale your shop’s growth with Tekmetric

Chances are you want to open an auto mechanic shop not only because you're passionate about fixing cars and helping but also because you need to support yourself. But as a business owner, you also need to support your team.

But long-term stability and growth requires smart, evidence based choices. You must find a way to scale, track, and plan for growth, or you’ll be basing your decisions on a lot of guesswork.

For example, if you try to set prices for an oil change but aren’t sure how many oil changes you’re actually performing each month or what your margins are for the oil and the labor required, you’ll never know whether you need to raise or lower the price or keep it as is.

With Tekmetric as a guide, you can make well-informed choices and easily change how you do business if something just isn’t working.

Better Decisions, Made Easier

Let’s say you come into the shop and see your employees are stressed. You can look at scheduling features and Tekmetric’s Tech Board to see each employee’s workload and shift projects based on bandwidth. You can also take a look at how much profit the shop is pulling in and see if hiring more service advisors or technicians is viable.

You and your team have a bright future ahead, and your smarts and know-how will take you far when you start an auto repair shop. Tekmetric can make success that much more tangible with real-time reports that include financial reports, employee reports, customer reports, and parts reports.

A Total View of Your Shop

Your financial reports help you determine how much you’re earning versus how much you're spending, and give you a view of gains and losses over time. Tekmetric’s financial reports include an End of Day Report, a Sales Details Report, an Accounts Receivable Report, and an Accounts Payable Reports. For Employee Reports, highlights include Technician Hours, the Realtime Service Writer Report, and the Realtime Technician Report.

You’ll be able to track and assess your shop’s performance with customers with Customer Reports such as a Customer List Report and a Customer Lead Source Report. Parts Purchased and Parts Usage in the Parts Reports can help you see what parts you’re selling, how much of each part you sell, and what your parts margins look like.

Start with a Strong Foundation

When you build your auto repair shop business plan around clear performance metrics, you’ll create a path to tangible growth over time, correct course when problems arise, and spot areas where you're having the most success.

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