The auto repair industry has been experiencing steady annual growth for the past few years. As a result, auto repair shops have enjoyed an increasing customer base with profits.
Nowadays, you can easily spot an auto repair shop at every curb. However, it can be challenging to launch and manage a successful auto repair shop with the growing competition.
But one tool can help you get started on the right foot… an auto repair business plan! Even if you plan to offer stellar auto repair services, you cannot do without a solid business plan.
And for precisely this reason, we will walk you through the step-by-step process to curate an effective auto repair shop business plan.
Why Do You Need An Auto Repair Shop Business Plan?
Auto repair shops are a lucrative business opportunity in many markets worldwide, especially in emerging economies. Starting a new auto repair shop holds the promise of helping you earn high profits….but only if you do it the right way.
Most of us assume that a business plan is something that only goes into high-end accounting software or large business consulting firms. But a business plan is a set of written instructions that shows how to start and run a business.
It’s the starting point for every business.
So before you can start devising a stellar automotive repair shop business plan, make sure you understand why you need it in the first place.
It Will Help You Secure Funding Or An Auto Repair Business Loan
Sure, you can quickly start off at an auto repair shop without a business plan. But, offer your customer robust repair services, and no one will ever ask you for a plan.
But if you plan on scaling your business and securing funding or a loan, the first thing you’ll be asked for is a business plan! A well-written business plan can help you get financing from banks, investors, and the Small Business Administration.
A thorough auto repair shop business plan is needed to make your investors or lenders believe that your auto repair shop is worth investing in. A business plan helps you think about your business objectively to make informed decisions as you move forward.
It Will Set The Direction For Your Auto Repair Shop
Your auto repair shop business plan will function as a GPS that will control where you are headed. A well-rounded plan will outline each and every step that you need, set direction and goals and keep you grounded.
The auto repair industry is a competitive space and a well-researched plan will support you in setting up an auto repair shop with unique selling points.
It Will Help You Track Your Business Performance
One of the most useful things about business plans is their help in tracking your business performance. While devising a plan, you’ll set goals and milestones for your auto repair shop.
A business plan helps you to think about your business objectively so that you can make informed decisions as you move forward.
As an auto repair shop owner, we know what you must be thinking…you might be stressed about not having time for business planning and putting everything down on paper.
So here’s your good news…making an auto repair business plan is actually not hard and doesn’t eat up too much of your time. In fact, having your own business plan will help you save time in the future, by streamlining your operations.
Once you start your own auto repair shop, an auto repair business plan is going to make the process easier for you.
It Will Help You Understand Your Competition
Existing auto repair businesses are going to pose a serious threat to you. It’s important that you have a unique positioning for your business idea, so you can stand out at least in the local market.
A deep market analysis is critical to understanding how you will be doing things differently from other auto repair shops.
It Will Assess The Feasibility Of Your Business Idea
Probably one of the greatest benefits of making your mechanic shop business plan is that it will help you in establishing feasibility. Looking at the numbers for your auto repair shop will force you to understand if the venture is even feasible.
Your auto repair shop business plan will involve researching your target market as well as the competitive landscape. Once you get an overview of your target market and the competitive landscape, you will use this information to determine if this business is viable.
It’s a feasibility study for the success of your auto repair business. When you do a detailed plan for your business, it is also possible that you will find it unviable. And you might choose to go forward with a different venture that may have a better chance of success.
It Will Determine The Financial Needs of Your Auto Repair Business
Once you complete your business planning, you’ll have to set and analyze the budget for your auto repair shop business. It’s possible that you won’t have the requisite capital for your business as per the plan.
In this case, the auto repair shop business plan will guide you on how much capital is required. The purpose of a business plan is to help you figure out how much money you’ll need and what kind of things you’ll use that money for.
If you want to raise capital, this is essential. You’ll learn how to effectively apply it to your business. Planning ahead to ensure your company’s success is a major factor in enabling you to raise additional funding in the future.
It Will Help You Uncover New Opportunities
The process of brainstorming, white-boarding, and creative interviewing, will likely give you a different view of your business.
As a result of your focus, you will often have new ideas for marketing your product and business. This is the difference between a business that succeeds and one that fails. It’s also often the difference between a business that just survives and one that thrives.
The Guide to Making An Auto Repair Shop Business Plan
There isn’t a one-fit-for-all auto repair shop business plan template that you can use for your auto repair shop, but here we’ll cover the main steps you have to take on making a stellar plan.
Start With The Executive Summary
As the name suggests, the executive summary will offer a brief overview of the plans of the leaders and founders. It will also roughly cover the mission of the auto repair business and what they hope to achieve with their operational plan and strategy.
Although the executive summary is the first part of an auto repair shop business plan, it usually helps to pen it down in the last. By the end of the business plan, you’ll know exactly what you are aiming to do with your auto repair shop.
Define Your Business Goals in The Business Plan
This is the essence of an auto repair shop business plan. Having your goals and milestones laid down will help set the direction for your business.
Usually, goals for an auto repair business will include revenue and profit milestones. It can also include the rate of growth you are hoping to achieve for your auto repair shop business.
Pen Down Your Company Description in The Business Plan
You’ll often have heard words like company mission and vision being thrown around in corporate offices and business schools.
This forms an integral part of your auto repair shop business plan. It will discuss the target market, the mission of your auto repair business, structure, values, etc.
In this section, you should also identify what we like to call the ‘’keys to success’’. These should be your unique value drivers which will distinguish your auto repair business from other competitors in the industry.
Conduct Market Research and Analysis
Now comes the tricky part for your auto repair shop business plan; a detailed market analysis!
This part of the business plan will cover the key market trends and competitor patterns. At this point, you also need to understand who your target customers are and what their pain points are.
A good business plan will center on solving key consumer tensions and pain points.
The next step is figuring out whether or not you can effectively compete with other auto repair businesses based on your current strategy.
For the competitive analysis section of the repair shop business plan, you’ll want to focus on both the short and long-term.
What can you do to give your business a competitive advantage over the short term? What can you do to give your business a long-term advantage over the competition?
It’s important that you address these questions in your auto repair business plan. It will help you forge ahead, make profits and grow the scale of your auto repair business.
Define Your Company’s Organizational Structure
So now it’s time for you to decide…who’ll be running the show? In addition to finalizing the legal structure for your auto repair business, you will now finalize the organization and management team to run it.
It goes without saying that you should only hire the best team for your auto repair business! It would be a great idea to invest heavily in human resources at this point in time and factor that into your business plan.
You should ideally select team members who have demonstrated experience or knowledge of the auto repair business. Having someone from the industry will give you key insights and knowledge on how to run your auto repair business successfully.
Add Services To Your Auto Repair Business Plan
At the heart of all business, plans are the service lines. To make your auto repair business plan solid, you’ll need to decide on the type of repair services that you will be offering to your customers.
More importantly, you should focus on how your services or products are going to help your customers in resolving the pain points identified in your research. This will help you in getting repeat customers as you start your own business.
Make Your Financial Plan
Remember us talking about how an auto repair business plan will support you in securing required funding? Before you can apply for bank loans or funding, you’ll need to have a detailed financial plan along with financial projections.
This will include your forecasted financial statements for the next five statements. Your projected cash flow statement will help you keep an eye on the cash coming in and going in.
You should update your cash flow statement as you go, to stay informed on the current liquidity situation of your business.
Additionally, a profit and loss statement will help you in deciding whether your venture is feasible or not. Your financial plan is one of the most critical sections of a business plan so make sure it’s error-free.
A projected balance sheet will also show the assets and liabilities of your business.
Your financial and business model will also help you uncover how much funding you require from external sources or whether your personal savings are enough to kickstart your business. This is the time to assess your cost structure and start-up expenses.
You can also hire a freelance accountant to get professional, financial statements for your business made.
Make Your Marketing Strategy
Having a solid financial plan, industry overview, and services for target customers will all go to waste without a proper marketing strategy.
While making business plans, it’s best to look up some of the top-performing marketing plans for businesses in the industry. Your marketing plan will cover your brand strategy, architecture, and voice to attract customers.
Having a fun and engaging marketing plan will not only help you in connecting with potential customers, but it will also help you stand out from the competition.