Vehicles have become an essential part of modern life. They transport people and goods, sometimes even saving lives. However, as useful as they are, vehicles are complicated tools and often require maintenance and repair. This is where auto body shops come in. If you have been thinking of investing in an auto body shop business, this article covers how to open an auto body shop business. However, we start by clearing up the common confusion between an auto body shop and an auto repair shop.
What is an auto body shop?
Many people think auto body shops and auto repair shops do the same work. While it is true that both shops work on your car, their functions are different. To understand the difference, it is necessary to know some things about the typical car.
Your car can be divided into two broad parts. It has the engine, which moves the tire, and the body, inside which the passengers sit and cargo is stored.
When the engine and other related components break down, you take it to the auto repair shop to fix it. However, when you need something fixed on other parts that are not directly related to the car's engine and movement or halting, you visit an auto body shop.
To be more practical, an auto body shop will work on the body of a car involved in major or minor collisions (they are also called collision centers). This type of shop will repair dents on your car body, do painting or repainting jobs, replace damaged bumpers, body panels, glass, etc.
Now that you are sure of what a body shop does, we will go into what you need to do when opening your own body shop.
How to start an auto body shop
Before you throw up your shop and start welcoming cars in need of repairs, there are some questions you need to answer. Doing so will help you avoid pitfalls that other entrepreneurs have fallen into. The major ones are discussed below.
Auto body shop business plan
It is essential to draw up a business plan. Even if you have had some experience working in or managing another auto body shop, it is necessary to have your own business plan before diving in.
Your plan will let you choose the path you are comfortable with most. For example, your end goal may be setting up a shop that can meet your own and your family's needs, while other entrepreneurs may target a chain of collision centers.
A business plan will also help you convince an investor if you need external funding. Your plan should contain a business description, including any required legal structure. You also need to include a market analysis that defines your target market and the strength and weaknesses of your competitors. You should also include a projection of earnings from your potential business.
Find the best location for your auto body shop
The location of your auto body shop can make a huge difference. It can determine how frequently you get business and the type of business that comes your way.
The best location is convenient for your clients and is in a high-traffic area. However, you may have to compromise because properties tend to be cheaper on the town outskirts even though a more central location will make you easy to find.
If you are planning to buy out an existing auto shop business, you must do your due diligence to ensure you will get enough business.
To start your business on the right foot, you need to register it and fulfill other legal obligations. Your business could be registered as a sole proprietorship, which means you own it entirely, or as a partnership when you have a business partner. You could also register as a limited liability company. Each of them has advantages and disadvantages.
Work out your startup costs
Setting up an auto body shop requires considerable investments. Apart from the property where you will operate, you need to get your own equipment. These include hydraulic lifts, hand and pneumatic tools, air compressors, paint guns, wheel balancers, diagnostic machines, etc. You also have to account for supplies like paint, oils, etc.
Other things that cost money include certifications, employee benefits, insurance costs, etc.
A good rule is to add 30 percent to your cost estimate to handle expenses that you have not captured in your plans.
If you can't provide all the funds you need, you may need to approach lenders. Research to find the best for you and avoid surprises after signing the contract.
Set up the software you need to run your new auto body shop business
Doing business in the modern age needs software to keep things running smoothly. You should get accounting, invoicing, communication, stock keeping, and appointment-booking software. There are also packages meant for running auto shops.
Your employees are literally in charge of your business, so you must be deliberate in this aspect. Go for well-trained and experienced hands to give your customers the best. Less skilled workers may cost you less but may kill your new business.
Bear in mind that you may need to hire more than just mechanics. Your front desk may need a receptionist.
Promote your new auto body shop
If people do not know about your auto body shop, you may not get clients. Use online tools to spread awareness about your service. Set up social media accounts, create a website or blog, and optimize it to show at the top during google searches. Buy online ads on Facebook that can be targeted by location, etc.
An auto body shop can be a lucrative business. However, it is important to get it right when setting up one. The points above can help you avoid the pitfalls of running an auto body shop.