Is owning an auto repair shop profitable?



Auto repair shops provide a valuable service to the community, and there are hundreds of thousands of them globally. However, as an investor, you want them to turn a profit so that they are sustainable. So if you have been offered a chance to invest in one, you may wonder if a business running an auto repair shop can be profitable and how profitable it can be. To find out, keep reading this article to the end.


Can you make a profit from owning an auto repair shop?

According to IBISWorld, auto repair in the US is a $63 billion industry, and body shops can be found in virtually every neighborhood in the country. One of the selling points of auto repair is that it is a business that cannot go out of style, as society has come to depend on automobiles a lot. Your bodyshop will always find customers as vehicles constantly need repair and maintenance. Many bodyshop owners started off as mechanics before starting their own business, but there is room for investors too. Generally, larger auto repair shops can earn up to $100,000 per annum, and your mechanics may earn between $30,000 and $50,000. However, your profit may depend on where your auto repair shop is located and your area of expertise. You could charge your client per hour, and some auto repair shops charge between $70 and $100. Some routine services have fixed rates, including oil changes and tune-ups. The overall cost of starting an auto repair shop varies based on your location. Still, the main expenses are business license and certifications, insurance, hydraulic lifts, diagnostic machine, shop rental fee (you could purchase it outright), toolset, etc. Your monthly overhead may fall somewhere between $10,000 and $20,000, including supplies. Some auto repair shops start small and expand their facilities and services as the business grows. There are ready-made auto shops, and you can select the size you want, which may depend on where you want to specialize. For example, if you're going to focus on detailing and customizing, you may not need most of the equipment commonly found in auto repair shops.


Advantages of owning your own auto repair shop

Owning your own auto repair shop has many advantages. For example, you can be your own boss, meaning you are in control of your time. Most auto repair shops open during working hours during the week and half the day on Saturday, giving you time to pursue other interests or simply be with your family. An auto repair shop is a good source of income, and it thrives, especially when the economy booms because many people would get a car. Moreover, bodyshops are some of the relatively few businesses that are not threatened by the boom in online commerce. Car owners will always need a brick-and-mortar place where they can fix their vehicles.


How to make your auto repair shop profitable

Whether you make a profit or not depends on how you run your business. For your auto repair shop profit margin to remain healthy, it is essential to optimize your cash flow. Below are the major areas you need to pay attention to for a sustainable auto repair business.


Your workforce

Even though auto repair shops usually do not employ many workers, you must ensure you get the best hands. The expertise of your mechanics will determine whether your clients are satisfied with the service they get or not. Getting good workers may mean you pay more in wages, but the investment is worth it. A skilled worker will not only get the job done but will spend the least time on the task. You also need a worker that can relate with your clients very well.



It is vital to keep track of jobs in your auto repair shop. This will ensure you get the most out of the wages you pay. It will also keep things organized as you will be able to determine when you need more staff. Make your customers book appointments and send them reminders through SMS or emails. Some software applications can handle this aspect for you.



You must keep your expenses as low as possible as it is a significant determinant of your profitability. Apart from labor costs, you will need to pay for the mortgage, equipment and supplies, insurance, etc. While buying up the property where you operate will insulate you from hikes in rental fees, the downside is that you would be tying down a significant portion of your capital. You might take options like equipment leasing or financing to make sure you get the best and latest equipment for your auto shop. Remember that high-quality equipment will let you do an excellent job for your clients and complete it on time. Some expenditures may fly under the radar, but they will affect your profit margin. For example, credit and debit card fees and waste disposal fees (you will likely pay more because of the hazardous materials your shop will be disposing of) will add up.



Marketing is essential to maintaining a healthy profit margin. This is because you need to attract new clients continuously, and it is the major way to significantly increase your revenue. Use all available means to attract the attention of your potential customers. The internet is a powerful tool in this regard. Set up social media accounts, create an informative blog, run targeted ads in social media networks like Facebook or Google Ads, etc. However, don't forget you need to retain your existing customers too. Offer quality services that will earn you positive reviews and increase your chances of being recommended to other car owners. Offer some services like oil change free as a complement. Auto repair shops can be rewarding to operate. if you need support to make your auto repair shop profitable, click here.