Before you can taste entrepreneurship and jumpstart your own auto repair shop, you need to know how much it is going to cost you. This is because to start your own auto repair business, the first thing you need to do is get your finances in order.
Without having access to capital to set up and build your auto repair garage or shop, you won’t be able to start. Auto repair shops can often require quite a bit of money since heavy equipment and machinery are often required for auto repairs.
But don’t rely on guesswork. In this post, we are going to share the average cost to build auto repair shop so you can get started on the right foot.
Things To Consider Before Calculating the Cost Of Building An Auto Repair Shop
Let’s face it: starting an auto shop is a significant financial investment. Once you start an automotive repair shop and considerable funds have been invested, it will be difficult to change direction. A significant amount of capital goes into setting up a repair business.
In this case, due diligence is essential. So, before you make a non-refundable down payment on garage space, consider a few key important factors.
If you want to succeed in your auto repair business, you must locate your shop in a high-traffic location where potential clients in need will come. Make sure your auto repair shop is a suitable distance from nearby residential areas, since many clients may pay to have their automobiles hauled to a shop and will consider towing charges/.
Once you’ve secured your location, you’ll need to plan for things like a lobby or sitting area where clients can rest while their cars are being repaired.
Lastly, auto repair shop owners should also think about how serious they are. Running your own auto shop becomes challenging quickly, so you must be able to commit your time, effort, and energy.
Once you’ve thought about all of this, you are ready to set up your own mechanic shop and should begin looking into the costs of opening auto repair shops.
The Estimated Cost To Build Auto Repair Shops
1st cost: Rental Space of Auto Shops
Monthly price range: up to $15,000
Type of expense: recurring
We begin this list with one of the most significant charges for you to consider.
Why is this the case? Renting suitable garage space to conduct your mechanic shop will set you back thousands of dollars each month.
Unless you currently own property that complies with local standards and government restrictions, renting a place is your best bet.
The price range for this room might be rather considerable. The following factors will have an impact on the cost of this expense:
- Location value in the marketplace
- Bids that are competing
- the amount of space
- Lease term duration
How can each of these factors fit within your present budget for garage space?
If you intend to run a modest vehicle repair company, you won’t require any more space. Certain structures will be ruled out as a result.
If you are concerned that a more remote setting would prohibit you from gaining new business and will make client visits inconvenient, you should rule out more remote sites.
All of these factors are going to impact the rental cost for your auto repair shop. You should also consider your budget before you decide on a place because it will affect your profitability.
While choosing the location of your own shop, you should also consider the potential space remodel fees. Sometimes, this can become a huge chunk of the total cost needed in setting up the auto shop. The total cost of setting things up will also impact your auto shop’s fees. For example, a fancy auto shop is generally more pricey than the simple, modest one.
2nd cost: administrative costs
Price estimate: $5,000+
Type of Expense: Startup costs
To open your auto repair shop, you must first obtain the proper business insurance and permits.
These administrative expenditures will include the following:
- ASE certification for your employees
- Building regulations and permits
- Insurance protection
- Administrative costs of other types
3rd Cost: Technician and Specialty Tools
Price estimate: $1,500+
Type of Expense: Startup
You’ve decided on the major vehicle repair equipment that will be used by your personnel. However, in order to use this equipment safely and efficiently, your crew will require smaller auto tools.
Costs that exceed $100 include:
- Wrench with an impact
- Drill using a cordless drill
- Battery charger and jumper Jack stand Ramps
- Costs less than $100 include:
- Hammers
- Wrenches for torque
- Wrenches with ratchets
- a drip pan for oil
- Grip vices
- Bench vs.
- First-aid supplies
- Gloves, boots, and LED headlights are all available.
As you recruit more technicians, your supply inventory will need to be expanded.
4th cost: Auto Repair Tools
Price estimate: $8,500+
Type of Expense: Startup Costs
The spot for your independent shop is ready, and the official rules have been met. It’s now time to think about the tools you’ll need for auto repairs and vehicle maintenance.
This list is by no means complete, since you may require more equipment depending on the sorts of automobiles you operate on and other circumstances. However, as the owner of an auto repair shop, you will undoubtedly require at least one of the following:
- Air compressor, Jack
- Workbench Diagnostics Equipment
- Vehicle hydraulic lift
- Crane for engines
These are only suggestions. As your business expands and you take more vehicles into your auto repair shop, you will need to invest in new equipment.
5th Cost: Basic Shop Supplies
Price estimate: $5,000+
Type of Expense: Recurring
The next step is to order vehicle parts and supplies from original equipment manufacturers.
You will need to invest more money in this area to provide outstanding service. Cheap motor oil and generic car components will result in a lousy service reputation and poor client evaluations, which will cost your company money in the long run.
Avoid this hassle by looking for high-quality alternatives for things such as:
- A/C coolant motor oil
- Radiator oil
- Transmission oil
- Cleaner for brakes
6th Cost: Labor Salaries
Price estimate: $100,000+
Type of Expense: Recurring
Your auto shop is well-equipped with vehicle repair equipment, and you have all of the essential servicing tools. It’s now time to assemble your auto mechanics and team members.
This is the highest expense you will incur each year, even if you do not include garage space. That makes sense for obvious reasons. You can’t run an auto repair shop without a crew of mechanics, technicians, and front-office personnel.
Consider how many people you will first hire to budget for this large price. For small vehicle repair firms, at least one technician and one front-office person are required. As your company expands, you will add to this crew. For example, as your business expands, your auto shop will require a billing and customer accounts department, human resources department and others.
When considering yearly compensation for a minimum of two people, this cost is likely to exceed $100,000. Compensation, health benefits, payroll taxes, and other related expenditures must be included in this cost.
While that figure may give you a panic attack right now, keep in mind that your company’s revenues will help pay ongoing labor costs. It is also important for a successful business.
7th cost: marketing
The monthly cost is expected to be $1,000 or more.
Type of Expense: Recurring
Everything is in order. It’s now time to go out there and grab some business.
So, where do you begin? You will need to execute successful marketing initiatives to attract clients. And such attempts will incur further ongoing expenses.
Your marketing money might be spent on:
Search Engine Optimization: Hire part-time freelance writers and SEO experts for your organic website and SEO. These marketing experts can assist you in driving traffic to your website by launching it, targeting organic keywords in content, and producing blog entries. An auto repair SEO strategy is vital for your business’s success.
Sponsored marketing and SEM: Use Google AdWords paid search campaigns to get your new business in front of more potential clients.
Social media: Create accounts on Facebook, Twitter, and Instagram. Post relevant daily material showcasing deals, events, customer service highlights, and the distinguishing characteristics that set your company apart in the automotive industry. Although running organic social is free, you may want to investigate sponsored social to increase impressions and clicks.
Regular events at your car repair company might range from customer appreciation days to special sales aimed at attracting new clients. These are some of the best marketing ideas to increase profits.
Final Thoughts
Opening an auto repair firm will cost you well over $100,000 in total.
Remember that some of these expenses are simply the early starting funds necessary to create an auto repair business. However, after your company is up and running, you will still have to account for ongoing expenditures such as labor and other routine expenses.
Are you feeling overwhelmed? This average cost is not intended to frighten you away. Rather, it is intended to offer a realistic image of the financial commitment while emphasizing other expenditures that you may not have considered.
Opening an auto repair service is a rewarding step and possibly a successful investment if you have a flexible budget and the necessary amount of desire. And don’t forget the greatest part: when your firm expands, you’ll be able to offset many of these expenditures and reap the financial benefits of your hard work.
