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Fueling Success in a Car Shop Business


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car shop business plan

Common to all cars and trucks is the fact each one will need servicing or repairing many times over the life of the vehicle. Anyone trying to make an appointment with a car shop will quickly realize that there is still plenty of room for new businesses to enter the industry. The car shops offering a wide range of services delivered by expert mechanics and with top quality customer service to area residents and businesses can do extremely well. However, since there are many types of vehicle repair businesses already operating, startups need a way to differentiate their services. Perhaps the mechanics are trained on particular makes and models of vehicles, there will be state-of-the-art engine diagnostic equipment used, or customer service includes vehicle pickup and drop off for drivable cars and trucks.

The vehicle repair and servicing industry has low barriers to entry, meaning shops of all sizes regularly pop up. One of the ways to attract new customers as a startup is through competitive pricing, either for individual products and service or packaged deals like an oil change and tire rotation. Developing a quality car shop business plan is an excellent way to assess each aspect of what it will take to startup and operate a successful enterprise.

Following are a few of the points to keep in mind:


• Complete an in-depth market analysis before selecting a location. The research should pinpoint the competition, identify service area gaps, and make it clear why a particular location is a good match for attracting the targeted customers. For example, are consumers or commercial enterprises going to be the main source of business? If consumers, then the location should be close to neighborhoods or popular retail centers. If businesses, the location will likely do best in a commercial area like close to downtown office buildings or near suburban business districts.
• Explain the types of car repair services the shop will offer. Will the shop mechanics primarily do routine vehicle maintenance and repairs or major engine repairs?
• Revenue sources usually include service charges, commercial contracts, insurance business, or some combination. The prices are determined by factors like prices charged by competitors and supplier costs. During business planning, the shop owner needs to determine how the business will set prices, if prices will vary depending on the type of customer, the factors that can lead to price increases or decreases, and how pricing will maintain competitive positioning.
• There is a need for high-end computerized engine and systems diagnostic equipment if the car shop intends on servicing later vehicle models. The equipment can be very expensive, so it might be necessary to consider if there is a need for equipment leases or financing.
• What marketing strategy will be used to reach potential customers? There are many ways to attract new business, including advertising, running specials, referrals, seasonal discounts, and so on. What is the plan to keep a continuous supply of customers requiring vehicle servicing throughout the year?

Each car shop is different. Some attract customers based on speed of services delivered for routine maintenance, while others concentrate on large repair jobs. The car shop business plan must present a clear picture of the business from every angle, presenting realistic financial statements that show when profitability is expected. Since an auto repair business needs a shop big enough to do repairs, specialized equipment, and qualified mechanics, there is likely a need for investors. The business plan is a critical document for convincing angel investors, private lenders, equity partners, and banks that this is a good investment.

OGS Capital helps car shop owners develop highly professional business plans with each one serving as a solid foundation for long-term success. Simply complete the online contact form and begin working with qualified consultants, whether starting a new business or expanding product and service lines in an existing business.

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