How to Open an Auto Repair Shop in a Financially Savvy Way

If you are a budding entrepreneur with a desire to open your own auto repair shop, there is both good news and not-so-good news.

First, the not-so-good news: it will cost you some money to get your business up and running. As How to Start an LLC notes, while the costs to start up an auto repair shop do vary, you can expect to pay about $4,000 a year for insurance, about $3,700 for a mechanic’s hydraulic lift, around $15,000 for a mechanic’s tool set and then fees for a business license and ASE certifications.

Now, the much better news: with a solid combination of determination, bargain hunting and a DIY/can-do attitude, you can get your new business up and running in a financially smart and savvy way. Here's how.

Shop Around for Your Shop's Location

Unless you have a pile of money stashed away and can afford to buy your location outright, you will probably pay shop rental fees. As you will quickly find once you start looking at available locations, these rents will vary drastically. While you want to open your shop close enough to main roads and highways and in a decent neighborhood, you should also focus on finding rents closer to $1,500 or $2,000 a month instead of $9,000 a month and higher. To do this, you may have to commute a bit longer from home than you had planned for, but the savings will be worth it.

Stock Up on Parts by Buying in Bulk

When you are ready to start stocking parts and other auto-related supplies, try to purchase as many of them as you can in large quantities. Granted, it may be scary to pay $1,000 or more at once for cases of oil and other auto fluids, but the per-unit price will save you tons of money in the long run. Another example of where buying in bulk makes sense — both financially and also to have a well-stocked supply room — is in regards to o-rings. These small but highly necessary parts are used in a number of auto systems including the hydraulics, air conditioning system and many other places. To prevent having your customers wait for you to order the correct o-ring for the job, you might consider buying a number of common o-ring sizes in bulk. Be sure to store them carefully in your supply room away from heavy items that may fall on them and crush the rings.

Look Into Buying a Current Shop

Another way to fulfill your dream of owning your own auto repair shop is to consider buying a current shop. As the Houston Chronicle notes, if you find an owner who is ready to retire or is moving to another state and wants to sell the location with all the tools and equipment included, you might save a bundle of money. As long as the equipment is in good shape — and it’s definitely worth checking it carefully to be sure it is — you can avoid shelling out the aforementioned thousands of dollars for the hydraulic lift, tools and other needed items.

While you will have to spend some money to launch your auto repair shop, it does not have to be the end of your financial world. By following these tips and coming up with some other dollar-smart ideas of your own, you can fulfill your dream of owning a car-related business.