How to Start a Body Shop Business
by Arina Smith Business Development 08 June 2018
Are you sick of working at somebody else’s body shop? Or are you just a hobbyist, looking to start turning your auto body repair skills into something a little more profitable?
With an average 20-40% profit margin for part sales and 50-60% for labor, it can be a profitable industry to work in.
But do you know what it takes to start your own body shop business?
If you don’t, don’t worry – here’s a rundown of what you need to do to get your business up and running.
Put Your Business Plan Together :
Before you open up your auto body business, you need a plan. Putting together a business plan might not be exciting, but it’ll allow you to fully understand what you need to do to get your business open and running effectively.
Provide a summary of your intentions in the document, and use it to flesh out your market research. How much do you expect to earn, who are your local competitors, what sort of funding do you need?
It’s your go-to document for your business, helping you secure things like financing and business premises along the way.
Need help putting together your business plan? Use this helpful tool from the U.S. Small Business Administration to develop your plan, stage by stage.
Pick a Location
Location is everything for a body shop. You need to choose somewhere that’s affordable, big enough to house your business (and allow room for possible expansion), and within reach of a wide potential base of customers.
It also needs to be easy for customers to get into and easy for them to find. If you’re hidden in an industrial estate, with poor access for vehicles, you’re not going to be a customer’s first choice.
If you’re looking to rent, carefully look at any conditions attached and whether your lease is long-term, to avoid the risk of disruption to your business later.
Choose the Right Equipment :
The cost of purchasing the right body shop equipment can add to the startup costs you’ll have to consider, so it’s important to know what’s essential, what’s fantasy and whether you’re underestimating any of the costs involved.
You’ll likely need to purchase a compressor, spraying gun and various spray paints for customers to choose from. You’ll also need equipment for body repairs, such as a sander, welder and body hammer.
Before you buy any equipment, get a full range of quotes for prices. Understanding the costs involved will help you make decisions in the next stage – financing.
Financing and Funding :
Unfortunately, with a business involving cars, you’re going to need money to get yourself started. You need a place to work from, equipment, business insurance, and money to help pay for parts and wages.
You should look to see whether you can part fund some of the costs yourself, but if this isn’t an option, you should look to see whether you’re eligible for a Small Business Administration (SBA) loan.
These are federally backed loans for small businesses, allowing you to pay low rates of interest while giving you essential business funding to get you started.
If you’re unsure about taking out a loan, or if you’re not eligible, then consider these 5 different ways to raise business capital without one.
Unsure about going it alone, or are you worried that the competition might be a little stiff in your area? You should consider whether franchising is a better option for you.
A franchise is simply a business that establishes itself under an existing brand. You gain the power of their marketing, brand trust, and support to help get your body shop up and running, usually for a percentage of the profits.
You’ll get the benefit of their experience, too. Most big franchise opportunities will have a set startup procedure to follow, taking much of the uncertainty away and reducing the likelihood of failure.
Decide on a Marketing Approach
You can’t set out on your own without understanding how to bring in customers, and where you’re going to find them. Investing in marketing from the beginning can make all the difference, especially as you look to start making profits quickly.
You want customers to trust your business, and your website is likely to be the first thing they see if they search for your business online. That makes having a good, high-quality website essential for bringing in customers.
Take a look at this company website as a good example of how to design a high-quality body shop business website. If you’re looking for other ways to get your business known, these body shop marketing ideas should prove useful.
You’ve got your business plan written, finances sorted, and a potential location in the bag. It’s time to make those last minute decisions before you finally launch.
Are you certain about your business name? Get it registered, and see if you’ve got enough money left in your marketing budget to spend on branding.
What about employees? If you’re going to be hiring staff to help you, now is the time to start advertising and interviewing potential candidates. It’s also worth registering your business with the DMV, depending on state and local regulations.
And before you launch, make sure you understand state and federal legislation regarding hazardous materials. Spray paint can be hazardous, so make sure your business premises have a good air flow, and you establish proper health and safety procedures before you launch.
If you’re unsure what the regulations are for health and safety, check out OSHA advice for body shop repair businesses.
Open up a Body Shop Business Today
With healthy potential profit margins, it’s never been a better time to start your own body shop business.
But don’t jump in without putting a plan together. Establish your business plan, research your competitors and speak to a lender about suitable business financing to get you started.
And before you launch, make sure your business premises are safe and ready for you and for any potential customers and employees.
Once your business is up and running, remember to avoid these obvious business setbacks. Got your own tips? Share them in a comments section below.
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