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How To A Start Auto Shop Business Philippines

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How To A Start Auto Shop Business In The Philippines: According to Statista , there are currently 1.1 million registered cars in the Philippines. These data points exclude all other automobiles, such as jeepneys and motorcycles. So we know there is a market within the gap , but is there a gap within the market?

Today we will be specifically exploring the process of how to start an auto shop business in the Philippines for complete beginners.

Table of Contents

How To Start Auto Shop Business In The Philippines

1. build a robust business plan & strategy.

The first stage of any great idea is creating a plan and strategy . The plan is essentially what you are aiming to do with your business. For example, earn 100K Pesos a month or serve 10,000 customers. A strategy is how you will get there, and this is why these two elements are fundamental when starting an auto shop business in the Philippines.

Several robust auto shop business plans can be downloaded; however, if you are looking for a business plan specifically for the Philippines market, we have a free downloadable business plan and financial template that can be used when starting a new business in the Philippines.

You will also find that a business plan comes in very handy in the future. Not only will this help you determine your location, budget, and operations, but it will also help you differentiate. Most importantly, you will see if this business model is profitable for you.

2. Research The Auto Industry In Your Area

Previously, we explored the process of market research in the Philippines and why this is so important. To summarise, market research can save you a great deal of time and money when looking at how to start an auto shop business in the Philippines.

Here are some documents to get you started –

  • Auto industry expands 23.8% in Jan.-Oct.
  • Automotive industry in the Philippines
  • Philippines Automotive Market
  • Automotive industry in the Philippines – statistics & facts
  • Toyota holds 44% market share in market 30.9% below pre-pandemic levels

As we know, the term auto shop can fall under several categories . For example, some specialize in auto repair businesses in the Philippines, while others specialize in selling new and used vehicles. Therefore, you may wish to conduct several pieces of research depending on the type of business you are entering.

There will also be times when there is very limited information when conducting market research on starting an auto business in the Philippines. Therefore, you may need to conduct a private investigation to assess the current market’s business risks, opportunities , and threats.

3. Find The Perfect Location For Your Auto Business In The Philippines

So, where is the perfect location for your business? For example, if you live in a city, would it be cheaper and more profitable to open your business in the provinces? On the other hand, if you are located in the provinces, could you find more customers in the city?

There are several areas to consider when it comes to the perfect location for an auto repair business in the Philippines or an auto shop business. The first is accessibility. Are your customers able to find you easily and conveniently? The harder it is for customers, the less likely it is for them to return to your business.

The next consideration is affordability. It sometimes makes better business sense being in a higher-priced area if it means that your business gets more customers and visibility. Other concerns include the size of the premises, security, and so on.

4. Find Suppliers And Tools

If you are starting an auto repair shop business in the Philippines, you need to ensure that your business has relevant tools for you and your staff to do the job effectively. Not only are the right tools important for the job, but having the right tools can also save you a great deal of time.

Most tools can be purchased locally at an affordable price; however, if you want to purchase tools in bulk, a great website to find bulk products is Alibaba.

On the other hand, if you are not starting an auto repair business in the Philippines but instead looking to become an auto retailer or something similar, this is a stage where you replace suppliers and tools with vehicles.

5. Seek Financial Support (Optional)

Raising capital for a brand new business is never an easy task, but luckily there are several ways you can raise the capital for an auto shop business in the Philippines. Here are some examples.

How do I start an auto repair shop in the Philippines

It’s often recommended to speak to a business expert or financial advisor during this stage as the business’s finances can be very complex. This is why many businesses have a dedicated team specifically to handle the business’s finances.

Additionally , when starting an auto shop business in the Philippines, one area to think about is your business’s size & overall scope. However, it’s often recommended to start a business small. Most large and successful corporations started very small. It’s always best to build the foundations of a business as early as possible before moving up to the next layer.

A common question that is often asked is how much does it cost to start an auto repair business in the Philippines? The total capital needed to start an auto repair business in the Philippines can be as little as 100,000 pesos. This includes a suitable location, survival budget, and tools. The total capital may be slightly higher or lower depending on the size and direction of your business.

6. Registration And Operations

The next stage when looking at how to open an auto repair business in the Philippines is the registration and finalizing of operations.

To legally open a business in the Philippines, you will need to have a set location for business registration; therefore, you may wish to complete this stage after you have decided on your location. Nevertheless, this stage can be moved forward or back if necessary.

The stage that follows is confirmation of business operations. This is linked very closely with your business plan. This includes who will be doing what and when. For example, when will your business be open, and who will open and close your business every day?

As soon as the business has been registered and the final operations have been confirmed, a business owner will then move on to officially opening their auto shop business. What comes next is the process of growth.

7. Marketing & Growth

For the business to be successful, there will need to be growth. This can include growing your team, customer base, Etc. But the question you may then wonder is how to grow an auto repair business in the Philippines?

To grow, you will need to ensure that you increase your current market dominance. To do this, your business needs to be better. Better can mean shorter waiting times, more convenience, cheaper rates, unique experience, and so on.

However, before you get to that stage, you need to grow your business from the beginning, and marketing is often a great way to do this. Marketing can be free and paid, and recently, we explored how to market in the Philippines , which offered some unique free and paid options for entrepreneurs.

Naturally, there will be new opportunities and challenges when starting an auto shop business in the Philippines. Still, the great news is there are many gaps within the market for innovation. So if you can make the process better in one way or another, never be afraid to be different.

How To A Start Auto Shop Business In The Philippines

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How to Start an Automotive Service Shop in the Philippines (2022)

Automotive Business Philippines

The Philippines' automotive industry is growing. Last year was a “recovery year” for new car and truck sales. The used car market also has seen growth. As Filipinos buy vehicles, the need for automotive services increases as well. This is an opportunity for the automotive service shops. This article will guide you on how to start an automotive service shop in the Philippines.

The Philippines Automotive Market Overview

In their 2021 Annual Report , the Land Transportation Office disclosed that there were 13,022,483 vehicles registered. This is bigger compared to 2020 which had 11,851,192 vehicles registered.

According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA), the total car sales in 2021 reached 268,488 units. It is higher than the previous year which had 223,793 units.

The used car market is increasing as well. Experts predict it will grow at a compound annual growth rate (CAGR) of 8.9% during 2020-2025. They attribute the increase to two main factors, the pandemic and internet penetration.

During lockdowns, private vehicles could run as long as they were essential travels. As the government eased the restrictions, private vehicles could travel but not public transportation. Filipinos saw this advantage of having their own vehicle. Another advantage is that traveling in a car does not expose you to the Covid virus.

Moreover, the increased internet penetration made buying a used car an ease. Used car sellers have their own websites and social media platforms. This gives them a wider reach and easier communication with customers.

All these vehicles need servicing and repair. This gives the automotive service shops a huge opportunity.

Automotive Service Shop Business in the Philippines

In the last Philippine Statistics Authority survey (2017), there were around 2,020 automotive service and repair shops in the country. In the previous year (2016), there were only 1,418 automotive service and repair shops. That is close to a 43% increase.

This increase is a response to the increasing number of vehicles in the country. This proves that the automotive and repair shop business is a viable business.

Services Offered by Automotive Service Shops in the Philippines

Automotive service shops provide all or one of the following services: Repair

  • Rebuilding or reconditioning of motor vehicles or parts
  • Collision service
  • Car detailing

Those focusing on one service are called specialty automotive shops.

Type of Automotive Service Shop Business

Size and structure categorizes types of automotive service shop business in the Philippines.

Size categories

As to size, automotive service shop business falls into four categories: casa (dealership service shop), talyer, branded specialist shop and gas station service center. 

For Filipinos, the dealership service shop is casa. Casa is the Spanish word for house. So, when Filipinos say casa, they are referring to the in-house service shop of the dealership. Toyota Shaw Service Center is a casa.

A talyer refers to the unorganized and organized service and repair shop. ”Talyer '' is from the Spanish taller which means workshop. In the early days of the automotive industry in the Philippines, there were only two types of service shops, casa and talyer. Any shop which was not casa was a talyer.

Today, Filipinos applied the term talyer to unorganized, neighborhood service and repair shops. They also applied to organized service and repair chain shops. Rapide Auto Service Experts falls under this category.

Auto specialty shop

Auto specialty shops focus on a certain work on the vehicle. Some specialty shops focus on either body repair, painting or any other works. Other shops limit their services to certain parts like suspension, aircon, wheels and tires, etc. Goodyear Servitek is an auto specialty shop. Although they operate like a full-service shop, their primary expertise is tires.

Gas station service center

Many larger gas stations offer car services. However, many of them limit themselves to maintenance servicing and quick repairs.

These categories will help you understand the different automotive service shops. They can also help you in planning the type of automotive service business you want to enter. 

Structure categories

As to structure, there are two categories: independent and franchise.

An independent business is a privately owned business and free from outside control. A franchise business is a business where a business owner, the franchisor, allows someone, the franchisee, to use his brand, operation, products and expertise for a franchise fee. Many multi-brand chains offer franchises.

This article aims to help those who want to start an automotive service shop business as an independent and as a franchisee. The end section of this article will present five automotive service shop franchises.

Pros and Cons of Automotive Service Shop Business

Before jumping into it, knowing the pros and cons of the automotive service shop business is beneficial to you.

Lower rates offering

As a talyer owner, you can afford to offer lower rates because nobody obliges you to use original equipment manufacturer (OEM) parts only which are expensive. Regarding parts, you give the customer an option, OEM or aftermarket. The customer also has the option to buy the parts himself.

Multi-brand servicing

You have the freedom to serve all brands, unlike the dealership service centers. Your shop becomes a multi-brand shop.

Wide customer base

Aside from being a multi-brand shop, you can provide service to out of warranty and used vehicles. Owners of these vehicles look for cheaper alternatives to dealership service centers.

Local connections

You can build local connections. Being a multi-brand shop, you can serve all those with vehicles around your shop.

Electronic issues

Each new model is more high-tech than the previous one. Dealerships let their service mechanics and technicians attend a training offered by the car company whenever a new model comes up. You have to wait until this training is available to everybody.

High regards to dealership service centers

People have this high perception toward dealership serviced vehicles. This perception comes out when selling the car. A dealership serviced vehicles fetch higher resale value than non-casa serviced cars.

Challenges of an Automotive Service Shop Business

Every business has its set of challenges. For the automotive service shop business, the top five challenges are: 

Staying up to date with advances in diagnostics

This is quite a challenge for shop owners because car manufacturers are always coming up with new features in vehicles. Shop owners need to train their mechanics and technicians constantly. Going with that is the need to buy equipment and gadgets for diagnostics.

Lack of good, knowledgeable and motivated technicians

Finding the three ideal qualities in a worker is a challenge.

Funds for advertising

If you want to increase your revenue by bringing in more customers, you need advertising. The problem is where do you get the funds?

Diagnostic tools/software too expensive

To stay in the market, you must have the latest diagnostic tools and software. The challenge is the price of these tools and software.

The Importance of an Automotive Service Shop Business Plan

One important factor that leads to a successful business is the business plan. It is like your map to success. It provides you with the direction. Thus, it is important to write a business plan.

Automotive Service Shop Business Plan Sample Outline

To give you an idea of what the different elements found in a business plan are, here is a sample outline.

Executive Summary

This section gives you a picture of the overall content of the business plan. This would include:

  • Overview of the business
  • Other departments

Opportunity

In this section, you answer these questions:  What service are you offering?  How does this endeavor help solve a problem in the market?  Who is your target market and competition?

In the execution section, you lay down the plan of making a profitable business out of the opportunity you have seen. Here, you present the marketing strategies and plans.

Company and Management Summary

Here, you mention the teams and individuals that you already have and those teams that you are still to create or individuals that you are still to hire. Discuss how they make a good fit to your company. Also, mention how you will manage the business.

Financial Plan

This is a crucial part. In this section, you discuss financial forecasts and source funding for capital.

The appendix should have references, diagrams, tables and others that support the business plan.

If you want to know more on how to create a business plan, Franchise Market Philippines has a blog to help you.

Facilities and Equipment Needed

Here are the basic facilities and equipment needed in an automotive service and repair shop:

Vehicle Lift

There are many kinds of lifts. The most convenient to use are the hydraulic lifts, which can be two-posts or four-posts. However, they are expensive. One good alternative is a ramp. Just ensure that it is safe and sturdy.

Air Compressor

An air compressor is not only for inflating tires but also for operating pneumatic hand tools.

Jack, jack stands, and pole jacks

Jacks come handy when lifting vehicles for certain work not needing vehicle lifts. Jack stands are also useful in supporting raised vehicles. Pole jacks are for support of axles and other parts of the raised vehicle.

Oil drain and oil caddy

When changing engine oil and transmission oil, oil drain and oil caddy are useful. These two ensure that oil does not drain and spread on the floor.

Battery charger and jumper

Battery charger and jumper are for dead batteries and charging issues.

Engine hoist

Sometimes you need to remove and install an engine to the vehicle. You need an engine hoist for this work.

Brake lathe

With a brake lathe, you can resurface brake discs or rotors and drums.

Strut compressor

When working on suspensions, your work will become easier with a strut compressor.

Air conditioning machine

If you accept air conditioning jobs, you need an air conditioning machine. An air conditioning machine can recover, recycle, and recharge vehicle air conditioning systems.

A press is for removing and installing bearings and bushings. It is also useful for bending and straightening metal.

Transmission jack

When taking down and installing the transmission, it is safer to use a transmission jack.

Workbench with vise

A workbench for many jobs like when disassembling and assembling parts, wrenching, hammering, etc.

Some important automotive shop hand tools are: 

  • Wrench or spanner sets
  • Ratchet and socket set
  • Screwdriver set
  • Wire strippers and cutters
  • Nut drivers
  • Greasing guns
  • Angle grinder

Business Requirements for the Automotive Service Shop Business

To avoid legal inconvenience later, your automotive shop should comply with the different legal requirements for starting a business here in the Philippines.

Register your shop with the Department of Trade and Industry

There are three types of business ownership: sole proprietorship, partnership and corporation. For sole proprietorship, register with the Department of Trade and Industry (DTI) office.

For partnerships and corporations, register with the Securities and Exchange Commission (SEC).

Secure the Mayor’s business permit

To secure the Mayor’s permit, go to the city or municipal hall where you want to put up your business. Be aware that this permit has many requirements that you have to work on beforehand. They are the following:

  • DTI Business Name Certificate for a sole proprietorship, SEC Articles of Partnership or SEC Certificate of Incorporation
  • Barangay Clearance/ Permit
  • Authorization letter of the owner with ID
  • Contract of Lease or Land Title / Tax Declaration
  • Sketch of Location
  • Occupancy Permit
  • Location Clearance
  • Public Liability Insurance
  • Community Tax Certificate (Cedula)
  • Fire Permit
  • Sanitary Permit

There are other additional documents or permits that the city or municipality may require from you.

Accreditation with the Department of Trade and Industry

Automotive service and repair shops have to get DTI accreditation before operation. The purpose of the accreditation is to show that your shop has passed the DTI’s personnel and operations standards. The accreditation is proof that your shop is competent and reliable. It gives the customer an assurance of your service.

You can go to this page on DTI’s website for the accreditation requirements and procedure.

Automotive Service Shop Business Tips

Get a good location.

Your location is of utmost importance. To a great degree, a location dictates the success or failure of a business. Here are several helpful considerations when choosing a location for your automotive service shop business:

  • Is that where your target market is?
  • Is it accessible to your target customers, your potential workers and suppliers?
  • Will it make your store visible?
  • Can I afford the rent?
  • Is it safe?
  • Am I allowed to put up an automotive shop in the area?

Recruit the right people

Hiring the right people is a challenge as mentioned above. You have no other choice but to face this challenge. Employees can make or break your business. Qualities you want to see in employees are:

  • Reliability
  • Trustworthy
  • Knowledgeable

Keep the shop clean and organized

Keeping your workplace clean and organized improves your efficiency. Dirty and cluttered workplace slows down your work. Clean and organized shops also attract customers.

Have social presence

It is essential that you build relationships with your customers. To address this, have social media pages. Creating a social media page is free but it brings several benefits to your business.

Five benefits that an online presence provides:

  • Customers get to know your company.
  • Customers engage with you on a personal level.
  • Customers get to know what you offer
  • Your online presence boosts your company’s brand.
  • Your online presence boosts your credibility. People trust businesses with websites and social media pages. Post updates regularly.

Market through social media

Even without a website, you can still market your business online. Use of social media. It is not only for internet presence. It is wise to use it to market your business since it is free.

Referral program

Provide discounts to customers who can bring another customer. 

Reward your suki

Give your loyal customers or suki special deals. This will encourage them to continue patronizing and promoting your business more.

What special deals can you offer to customers? Here are several ways to offer special deals:

  • Gift Vouchers
  • 10% Off Discount
  • Loyalty Points
  • Random Rewards
  • Package Deals

Five Automotive Service Shop Franchise in the Philippines

Rapide auto service experts.

Rapide Auto Service Experts is a chain of auto service shops in the Philippines. It started in 1998 with its partner, Midas International, the largest auto service center chain in the world. Midas provided them with the methods and procedures of servicing. Today, Rapide has over 50 shops all over the country.

Franchise Fee: ₱1.45M Initial Investment: ₱4M-7M Royalty Fee: 5% Marketing Fee: 2.5% Website: https://rapide.ph Email: [email protected] Contact Number/s: (02) 895 9486; 0951 923 8031

Car Crew Automotive Service Center

In 2018, a group of Overseas Filipino Workers (OFW) headed by Francisco “Bogs” Malbog opened the Car Crew Automotive Service Center in Imus, Cavite. They equip it with the latest diagnostic equipment and tools. Its crew are specialists in major automotive brands.

Franchise Fee: ₱1.3M Initial Investment: ₱6.7M Facebook: https://www.facebook.com/carcrew4103/ Email: [email protected] Contact Number/s: 0920 302 2222

Value Plus Auto Service Express (VPX)

ValuePlus Auto Service, the casa alternative, started in 2013. They use modern equipment. Their crew came from major car brands.

They want to share their success with others by offering franchising. All franchise branches carry the name Value Plus Auto Service Express or VPX. 

The information below is for their VPX Starter Package.

Initial Investment: ₱4.5M-P7M Space Requirement: 200 sq.m. Website: https://www.valueplusph.com Email: [email protected] Contact Number/s: 632-3413-8888; 632-8521-8878; 0917-625-1132

Motech Automotive 

In 1997, Rommel Naguiat started Ride Center, Inc. in Pampanga. In 1994, Ride Center Inc. became Motech Automotive Education Center, Inc.. The name change was the product of the company’s vision to train mechanics. However, all their shops became Motech Automotive as well.

In 2006, they started offering franchises. Today, Motech has over 70 branches.

Franchise Fee: ₱1.5M Initial Investment: ₱P7M Website: https://motech.ph Email: [email protected] Contact Number/s: (02) 920 2799; 0917-5113818

Ziebart | CarSavers

Ziebart International Corporation is an American vehicle rustproofing company. Kurt Ziebart, Rudy Herman and Joe Selagi founded the company in 1959 in Detroit.

Ziebart came to the Philippines in 1972 through the Philippine master franchisee, Bathala Marketing Industries, Inc. (BMII). In 1981, BMII went into automotive repair and body shop services and named it CarSavers. Now, you can see the two names together, Ziebart | CarSavers.

Website: https://www.carsavers.com Email: [email protected] Contact Number/s: (02) 8818-7777

Filipinos will continue to acquire vehicles. Most people think the pandemic would slow down vehicle sales. But, it did not. Instead, it appeared to accelerate. 

Pandemic is one sales driver. Even during the strictest level of restriction, the government allowed private vehicles as long as they were essential travels. Then, there was a level when the government gave permission to private vehicles to travel but not public transport.

This made the Filipinos think of buying a vehicle. Depending on their budget, some bought new vehicles while some bought used ones. 

Another driver is technology. It is much easier now to buy because of technology. You can find new and old vehicles for sale online. Sales agents are ready to entertain your call or message.

Now, all these vehicles need servicing and repairing. All these vehicles need automotive service shops. This makes the automotive shop a viable business.

The startup investment is quite large. However, the potential income is great. Mark Saberola, the General Manager of ValuePlus Auto Services Philippines Inc. explains that the average car owner’s bill for preventive maintenance services (PMS) is P5,500. A car owner on average does two PMS visits in a year. Multiply that amount with the number of car owners that come to the shop.. 

That is only for the PMS. The shop has many other services as well. So, if you are considering starting an automotive service shop, go for it.

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Disclaimer: Franchise Market Philippines strives to provide relevant and accurate information in all its articles. However, some information in our articles may differ or might be outdated from what you can see or read directly from the establishments' or businesses’ websites. Please get in touch with us directly for any discrepancies.

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Auto Repair Shop Business Plan

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Not everyone has the talent and technique to repair and restore cars, and if you have those skills, you might have thought of starting an auto repair business.

After all, most people prefer the autonomy having a business offers. But with autonomy comes responsibility. And to fulfill that you’ll need an auto repair business plan.

If you are planning to start a new auto or car repair shop, the first thing you will need is a business plan. Use our sample auto repair shop business plan  created using upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new auto repairing shop, spend as much time as you can reading through some examples of  services-related business plans.

Industry Overview

In 2021, 162000 establishments had a combined annual revenue of $115 billion in the US auto repair industry.

The growth has mainly come from the increasing number of cars on the road. Also, the growing mileage consumption has played a huge role.

Opening up a car repair shop requires you to pay for construction costs, labor, and equipment.

As the auto repair business is a profitable one it attracts a lot of competition, and to stay ahead of it you’ll need skills and a proper business plan.

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Things to Consider Before Writing an Auto Repair Business Plan

Select what area of repairs you’ll work on.

Auto repairs shops take up a variety of jobs like repairing and painting car bodies, transforming old vehicles, or doing tire and mechanical repairs.

So, it is necessary to decide what you want to do before getting started. Specialization helps you get more expertise in the area and makes you more reliable for the job to customers.

Pick a suitable location

An accessible location is a must for an auto repair business. Your location would also rely on the niche you’ll be working on. Tire repair services are usually on the road to make them accessible for emergencies.

While transformation services are mostly opened inside the city for easier pickup and drop.

Hire an efficient team

An auto repair business’s success relies heavily on the quality of services you provide. That helps you retain customers and get more. Hence, it is important to have a team that can provide quality services to your customers.

Apart from that, it is also important to have a team with good technical and soft skills to understand your customer’s problems better.

Formulate marketing strategies

Marketing your business is essential to attract customers and building your brand’s identity. Hence, it is important to have a marketing strategy for all the platforms your target audience uses to find repair services.

Chalking out Your Business Plan

A business plan helps you leverage the best of your resources, and get the maximum out of your efforts.

A business plan also comes in handy if you need funding or loans for your business, as investors and banks prefer to see a business plan before they give the money.

Reading sample business plans will give you a good idea of what you’re aiming for. It will also show you the different sections that entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample auto repair shop business plan template for you to get a good idea about how a perfect auto repair shop business plan should look like and what details you will need to include in your stunning business plan.

Auto Repair Shop Business Plan Outline

This is the standard auto repair shop business plan outline which will cover all important sections that you should include in your business plan.

  • Keys to Success
  • Mission Statement
  • Vision Statement
  • 3 Year profit forecast
  • Business Structure
  • Startup cost
  • Products and Services
  • Market Trends
  • Target Market
  • Market Segmentation
  • SWOT Analysis
  • Sales Strategy
  • Local Publications
  • Community Events/Organizations
  • Commuter Advertising
  • Customer Loyalty Programs
  • Direct Mail
  • Pricing Strategy
  • Important Assumptions
  • Brake-even Analysis
  • Profit Yearly
  • Gross Margin Yearly
  • Projected Cash Flow
  • Projected Balance Sheet
  • Business Ratios

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Download a sample auto repair shop business plan

Need help writing your business plan from scratch? Here you go;  download our free auto repair shop business plan pdf  to start.

It’s a modern business plan template specifically designed for your auto repair shop business. Use the example business plan as a guide for writing your own.

After  getting started with Upmetrics , you can copy this sample auto repair shop business plan template into your business plan and modify the required information and download your auto repair shop business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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For many entrepreneurs, the automotive repair industry is an appealing and profitable business. Opening an auto repair shop can be a rewarding and profitable venture, whether you are an experienced mechanic or someone with a passion for vehicles. However, deciding whether to start your own business or buy a franchise can be a difficult decision. In this blog post, we will discuss the advantages and disadvantages of both options in order to help you make an informed decision.

The automotive repair industry is an appealing and profitable business for many entrepreneurs. Whether you are an experienced mechanic or someone with a passion for vehicles, opening an auto repair shop can be a rewarding and profitable venture. Choosing whether to start your own business or buy a franchise, on the other hand, can be a difficult decision. In this blog post, we will discuss the benefits and drawbacks of both options in order to assist you in making an informed decision.

Several entrepreneurs find the vehicle repair industry attractive and lucrative. Whether you are an experienced mechanic or someone with a passion for vehicles, opening an auto repair shop can be a rewarding and profitable venture. Choosing whether to start your own business or buy a franchise, on the other hand, can be a difficult decision. This blog post will examine the benefits and drawbacks of both solutions so that you can make an informed decision.

Many would-be business owners find the vehicle repair market to be attractive due to the high potential profits it offers. If you are an expert mechanic or simply have a passion for cars, opening an auto repair shop can be a lucrative business. It’s not easy to weigh the pros and cons of going it alone vs investing in a franchise. In this piece, I’ll go over the pros and cons of each solution so you can pick the best one for your situation.

The car repair sector appeals to many business owners and is lucrative. Whether you are an expert mechanic or have a passion for cars, starting an auto repair shop may be a rewarding and lucrative business. But choosing between opening your own company and investing in a franchise might be challenging. To assist you in making an informed choice, we will go over the benefits and drawbacks of both solutions in this article.

Establishing Your Own Auto Repair Shop

Complete Control: Having complete control over every aspect of the business is one of the most significant benefits of opening your own auto repair shop. You have the authority to make decisions that align with your vision and goals, from hiring employees to setting prices and managing daily operations.

When you start your own business, you have the opportunity to create a distinct brand identity. You can choose your own company name, logo, and advertising campaigns, which will help you stand out from the crowd and attract customers.

Flexibility: Having your own business means being able to make changes as needed. If you see a growth opportunity, you can seize it quickly and easily without consulting with a franchisor.

Financial Risk: There is no guarantee of success when starting a business from scratch. You will need to invest a significant amount of time and money into the business, and you may not be able to recoup your investment if the business fails.

Inadequate Support: When you start your own business, you are completely on your own. You will not have access to the marketing and advertising materials, training programs, and a proven business model that come with a franchise.

Competition: The auto repair industry is highly competitive, and starting your own business will require you to compete with established market players. This can make standing out and attracting customers difficult.

Owning a Franchise Auto Repair Shop

One of the most significant benefits of owning a franchise is that you are using a proven business model. This means you’ll have access to a tried-and-true marketing and advertising strategy, a well-known brand, and a track record of success.

Support and Training: As a franchisee, you will have access to the franchisor’s ongoing support and training. This can include marketing and advertising materials, training programs, and ongoing support to assist you in reaching your goals.

Brand Recognition: Having a franchise allows you to access a well-known brand, which can help you attract customers. People are more likely to trust a company with a well-known name and reputation, which can help you establish a customer base faster.

Limited Flexibility: When you own a franchise, you must adhere to the franchisor’s guidelines and procedures, which can limit your ability to make changes to your business.

Ongoing Fees: When you own a franchise, you must pay ongoing fees to the franchisor, such as royalties and advertising fees. This can reduce your profits and limit your financial options.

You have limited control over your franchise business when you own it. The franchisor determines the brand’s direction and any changes to the business model, which can limit your ability to innovate and grow your business.

ValuePlus Auto Services Philippines, Inc. (VPX) is a rapidly expanding auto servicing franchisor. VPX is well-equipped to help aspiring entrepreneurs navigate the challenges of starting and running an auto service business, with nearly 10 years of experience and a network of 5 branches in Metro Manila and Luzon.

The VPX franchise package provides a one-of-a-kind opportunity for individuals interested in entering the automotive industry, whether they are starting up or operating in smaller or larger cities. To ensure franchisees’ success, the VPX team provides marketing materials, training, and ongoing support.

Mark Saberola, VPX’s General Manager, understands the difficulties of starting an auto service business, but believes that with the right support, anyone can realize their dream of owning a successful shop. For those who are passionate about cars and the automotive industry, VPX’s proven business model and extensive support system make it a wise investment.

ValuePlus Auto Services Philippines, Inc., with its franchising brand VPX, understands the birth pains of starting up in the auto servicing business from scratch because they started nearly 10 years ago. They currently have 5 branches and are expected to double in size this year due to their best-in-class franchise package, which includes options for those just starting out, those in smaller cities, and those in larger cities. When asked for comments, VPX GM Mr. Mark Saberola shared, “Owning an auto service business is a dream for many of our Kababayans, including the returning OFWs, serial entrepreneurs, and those whose passion is cars. However, while the industry is pregnant with opportunities, the risks are high and real. We want to help those who want to get into business, navigate this path with our tried and tested system. “It’s so simple to open a shop, but keeping it open and sustaining it is a completely different story.”

To sum up, both owning a franchise and opening your own auto repair shop have their pros and cons. The best option for you will be determined by your objectives, skills, and resources. Before making a decision, consider your financial stability, experience, and personal preferences. To ensure your success, whatever option you choose, do your research and seek advice from experienced business owners and professionals.

ValuePlus Auto Services Philippines, Inc. is the country’s leading provider of automotive servicing offers a VPX franchise and provides many benefits from our established brand recognition, comprehensive support, and cutting-edge systems.

For enterprising individuals, VPX franchise is an ideal business because of the support provided by the company to its business partners.

ValuePlus Auto Services Philippines ‘ dedicated team is committed to your success, providing marketing materials, training, and access to a network of successful franchisees. With VPX , you’ll have everything you need to succeed in the competitive world of automotive services.

Interested about what VPX auto service franchise offers? Visit www.valueplusph.com or contact Mark at [email protected] or 0917-738-2085.

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How to write a stellar business plan for an auto repair shop

auto repair shop business plan

Are you passionate about fixing cars and restoring them to their former glory? If so, you may have been dreaming about setting up your very own car garage for some time. Before fully taking the plunge, however, you'll need a tailor-made business plan.

To guide you through this process, we've written the guide below to offer our top tips for making your auto repair shop business plan a reality.

On the menu:

  • Why do you need a business plan?
  • What type of auto repair shop should I open?
  • What do you need to create your auto repair shop business plan?
  • What is the financial forecast for an auto repair shop?
  • What does the written part of an auto repair shop business plan look like?
  • What tool should I use to write my business plan?
  • Business plan template of an auto repair shop.
  • Three things you should know before writing an auto repair shop business plan

1. Why do you need an auto repair shop business plan?

Did you know that 60% of all new businesses in the UK are likely to cease trading within their first three years? Durham City Incubator believes that a "lack of business planning" is the number one reason for the failure rate being so high.

Writing out an auto repair shop business plan is, therefore, essential for your new business.

An auto repair shop business plan allows you to identify the level of initial financing that is required. It also helps you:

  • Anticipate any potential cash flow problems along the way
  • Estimate how much profit your business is likely to make, within its first three to five years of trading
  • Obtain financing from the bank - Small Biz Trends concludes that you are twice as likely to secure funding if you have a business plan

2. What type of auto repair shop should I open?

According to A Plus Auto Glass, there are multiple types of auto repair shops that you could open:

Auto repair service technicians

This is perhaps the most standardized service from the lot. It entails basic checks such as oil fluid levels and electricals.

You'll likely receive several repeat customers if you choose this model (especially those who drive a considerable amount) because servicing a car is recommended every 12 months or 10,000-12,000 miles (whichever comes first)!

Diagnostic technicians

This model is slightly more specialized. Such technicians carry out skilled checks that underline any issues vehicles might have.

It requires a higher level of skill because these issues cannot be seen on the vehicle's surface.

Auto system expert

If you choose to offer this model, you will specialize in surveying key systems that the vehicle has.

Engines, brakes and gear sets are all critical systems in most vehicles.

This business model has the potential to earn you high revenue.

Auto body repair clinic

This clinic or repair centre deals with vehicles that have been involved in accidents or roadside crashes.

If you choose this model, you may not have the volume of customers that the previous models may have but the revenue per sale is likely to be much higher.

You'll repair and retouch cars to ensure that they look as good as new and that any scratches or broken parts are fixed.

auto repair shop business plan car mechanic

Auto repair painters

If you choose this model, you will repaint vehicles or add touches to them.

Vehicles often need a fresh layer of paint, especially if they are being driven in areas where there is a lot of environmental pollution.

Expert auto glass repair

This model offers customers the chance to repair their windshield, windows or any other glass-related parts from their vehicle.

You'll likely require a high level of skill to do so but the rewards can be exponential, earnings wise.

You might also receive several clients who just want to repair small cracks in their vehicles.

3. What do you need to create your auto repair shop business plan?

Before writing your auto repair shop business plan and creating the financial forecast for your auto repair shop, you must first gather the data needed to create a comprehensive business plan.

You'll achieve this by...

  • Carrying out market research for your auto repair shop 
  • Building your marketing plan
  • Evaluating the operational costs and investments involved in setting up your business

Conducting market research for an auto repair shop

This is the longest and, admittedly, most tedious step in creating an auto repair shop business plan, but once you've got the right method - there's no excuse for mistakes.

As you move through the market research, you'll develop an understanding of the needs of your target market, as well as the current state of the industry. 

This enables you to then determine hot industry trends and identify where you should position yourself within the market to make your auto repair shop a success. 

Should your auto repair shop provide in-depth expertise on electronics, for example, or should it focus instead on motorcycle repairs or the sale of spare parts?

You must also assess the area in which you want to place your auto repair shop. This will give you a better idea of the local market, including the needs of residents and what services competitors are already offering. 

Developing the marketing plan for your auto repair shop

Once the market research is completed, the next step is setting out the marketing strategy for your auto repair shop's business plan. 

This is an opportunity to identify how you'll get your name out on the market and stand out from your competitors.

There are many ways of promoting an auto repair shop, from setting up a website and social media network to paid newspaper advertising and handing out street flyers. 

Taking the time to decide which marketing actions you want to go for will help you determine how much money you need to set aside for each one and how many customers you can expect, which you can then factor into your financial forecast later on.

auto repair shop business plan setting up a website

Evaluating operational costs and investments

To keep an auto repair shop running smoothly, you need a team you can count on. Typically, the size of a small car garage team is around 3 to 4 employees. You'll need a receptionist to welcome customers and at least two employees with experience in car mechanics - with the salary of each staff member being allocated according to their qualifications.

Additionally, you'll need a lot of technical equipment to get an auto repair shop up and running. Repairing vehicles requires having the right tools, as well as a full stock of car parts to help you meet the diverse demands of each car owner. 

To get an exact figure for the price of each item, you'll need to contact suppliers and ask them for quotes to integrate in your business plan for an auto repair shop. These quotes will then be integrated into the financial forecast.

4. What is the financial forecast for an auto repair shop?

Establishing the financial forecast is an integral step in the development of your auto repair shop's business plan. 

It is composed of 4 main tables, highlighting different financial aspects of the company:

  • Projected profit and loss statement
  • Projected balance sheet
  • Projected cash flow statement
  • Initial financing plan

The projected P&L of your auto repair shop

This table, which starts with the turnover, allows you to evaluate the growth, evolution of the cost structure of your auto repair shop, and its expected profitability over the coming years.

auto repair shop business plan P&L

The projected balance sheet of your auto repair shop

This table shows the value of the company's assets at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc.).

auto repair shop business plan balance sheet

The projected cash flow statement

This table is essential in helping you keep an eye on the company's cash flow, particularly to ensure that the company generates enough cash to be able to repay its loans and regularly renew equipment.

auto repair shop business plan cash flow statement

The initial financing plan

This table gives your bank or potential investor a quick overview of the resources needed to launch your auto repair shop and their costs - as well as the personal contribution you plan to make.

auto repair shop business plan funding plan

5. What does the written part of an auto repair shop business plan look like?

This part cannot be neglected. To be able to interpret your figures and judge the relevance of the assumptions used to build your forecast, it's necessary to have sufficient details about the project.

The editorial part of your business plan is made up of the following sections:

The executive summary 

The executive summary for your auto repair shop's business plan is the equivalent of a cover letter for your auto repair shop business plan.

The aim here is to introduce your business project to investors in as engaging and concise a way as possible, encouraging them to read on and learn more about your exciting venture.

In this part, you place a spotlight on the business's partners and their roles, as well as the distribution of the company's capital and the location of the auto repair shop. 

Be sure to mention who the business is managed by and the percentage of ownership that each partner possesses.

In terms of the management team, you should list any relevant experience that staff or managers hold, along with any qualifications achieved.

Products and services

This section explains the products and services offered by your auto repair shop. 

For example, if you choose a traditional auto repair shop model, this section could look something like this:

Change of oil

As part of our routine maintenance, we recommend that you carry out this service each time you visit our garage (provided it's within a reasonable time frame).

Brake repairs

This includes inspecting the brake pads or checking how smooth the brakes are on your vehicle. Again, this is part of our routine maintenance.

Full diagnosis 

This service includes both of the above and as well as other aspects such as headlights and coolant/fluid levels.

Market research

It's within this section that you'll present the results of the market research we mentioned at the beginning of this article.

The objective here is to demonstrate that there is indeed a viable business opportunity for a new garage in the area you've chosen.

Mention why you have a unique selling point over other auto repair shops and how your skill set helps you in this regard.

In this part, you'll reveal three key plans for your auto repair shop business plan:

  • Your pricing strategy-  the prices you'll set for your services / spare parts / new parts
  • Your marketing strategy -  the actions you'll take to attract customers and build customer loyalty
  • Your risk management strategy -  how you'll minimise the risks related to your business

The operational part

From your employees to your relationship with suppliers, you'll detail the operational organisation of your business within your auto repair shop business plan. 

It's important to mention what suppliers you'll be using to source your spare parts and equipment from. You might have few or many suppliers, depending on your concept.

Also, think about the payment terms that you might obtain with them. Are you a new business? If so, you may need to pay upfront.

The financial plan 

The financial plan puts your numbers into tables that you'll be able to present to potential investors so they get a better idea as to your expected profitability and how much funding you need.

6. What tool should I use to write my business plan?

We've established that to set up your auto repair shop, you need a business plan. What you may not know yet, however, is how you'd like to write it. There are three options available to you:

Write your business plan using Word or Excel

This solution has one major advantage: it's cheap.

Be wary, however, that you'll need to have an accounting background (or at least be very good with numbers) to write your plan in this way without making mistakes in the calculations.

Hiring a consultant to write your financial forecast

Hiring a chartered accountant or consultant to take care of the financial part of your business is a good way to avoid errors. 

However, the fees are generally quite expensive: budget around ÂŁ1.5k ($2.0k) for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).

Using online business plan software for your auto repair shop's business plan

If you're not used to writing business plans, another good solution would be to use our online business plan software .

auto repair shop business plan table of contents

There are several advantages to using specialized software:

  • You are guided through the writing process by detailed instructions and examples for each part of the plan.
  • You can be inspired by already written business plan templates
  • You can easily make your financial forecast by letting the software take care of the financial calculations for you.
  • You get a professional document, formatted and ready to be sent to your bank.

If you are interested in this type of solution, you can try our software for free by signing up to The Business Plan Shop today .

7. Business plan template of an auto repair shop.

A business plan template will give you a better understanding of how to frame your own business plan, as well as what investors are looking for.

Our  auto repair shop business plan template will be off great help to you!

8. Three things you should know before writing an auto repair shop business plan

Firstly, make a list of the potential risks that your auto repair shop could face. This could include both external and internal factors. Think about how you might deal with them efficiently.

Secondly, consider trends that are currently high-flying in the auto repair industry. For example, auto parts are being replaced much less frequently  thanks to advanced technology resulting in greater durability.

Thirdly, the same study also believes that there is a shortage in the number of skilled automobile technicians. This is because several experienced workers have now retired or moved on from the industry.

That's it for now, we hope this article has helped you better understand how to write an auto repair shop plan. If you have any questions related to setting up your business, please do not hesitate to contact us.

Also on The Business Plan Shop

  • Business plan vs budget: what's the difference?
  • How to buy an existing auto repair shop?
  • How to create a financial forecast for your auto repair shop?

Know someone who might be interested in this article? Share it with just one click!

Guillaume Le Brouster

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How Profitable are Auto Repair Shops? Profits & Break-even

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  • February 24, 2023

auto repair shop profits

👇 Check all our resources on auto repair businesses 👇

If you are planning to open an auto repair shop , you need to understand how you can turn your revenues into profits. In other words, you must know how much revenue you must generate to reach break-even and make profits.

The auto mechanics industry in the US is valued at $78.4 billion in 2022 , growing at +1.9% CAGR from 2017-2022.

According to Jerry , Americans spent $1,986 on average in 2019 on car repairs (or $165 a month), which is inside the sweet spot of $100 and $200 per month of the suggested budget for car maintenance by experts.

Despite being a huge industry in the US, it’s also a very competitive one with very high operating costs . If you’re wondering how much profits you can make with an auto repair shop, you’d have to consider first all the costs you must pay for to run such a business. Let’s dive in!

What is the average turnover of an auto repair shop?

IBIS World reports that there are 282,637 auto repair businesses in the United States in 2022. Thus, if the auto mechanics market is $78.4 billion, the average revenue per auto repair shop is approximately $275,972.

By these numbers, the average number of customers your auto shop will require to generate an annual turnover of $275,972 is 1,672 per year (assuming, the average spending by US citizens is $165.50 per month for auto repair and servicing).

Of course, these numbers are US averages, and the actual turnover of your business will depend on various factors such as:

  • Size of the auto repair shop
  • Frequency of customers, etc.

As far as the take-home salary of an auto repair shop owner is concerned, Climb the Ladder reports that auto shop owners earn anywhere between $45,380 and $113,643 per year . Zip Recruiter is a little less optimistic with ab average salary of $53,641 per year.

auto repair shop business plan philippines

Auto Repair Financial Model Template

Download an expert-built 5-year Excel financial model for your business plan

What is the average profit margin for auto repair shops?

According to Small Business Chron , auto repair shops generally have a profit margin of 50-65% for labor and 20-28% for parts sales.

Yet, it doesn’t tell us much about the average net profit margin of an auto repair shop, after deducting all expenses (not just labor and spare parts).

How does an auto repair shop make money?

Typically, an auto repair shop makes money by charging clients a flat fee or an hourly rate for the services offered. 

That translates to charging a set price for simple services like an oil change or fixing a flat tire. An auto body shop may charge an hourly rate or a predetermined charge based on parts and labor costs. 

Generally, providing a one-stop shop is a great way to maximize profitability and keep customers coming back even when they do not need car repair services. 

To illustrate and so you understand how a car repair shop makes money, we look at different services offered at the auto repair shops. Therefore, if you are looking to increase profit margins or to make your car repair business more profitable, you can introduce the following services:

Scheduled Auto Maintenance

Routine car maintenance is an essential service for keeping a car running properly. The regular maintenance covers oil changes, tire rotation, and brake pad replacements. According to American Automobile Association , car owners spend an average of $1,186 per year on scheduled maintenance.

Wheel Balancing and Alignment 

The beauty of wheel alignment and balancing is that you enjoy a high-profit margin if you priced it correctly. Other than the labor costs you pay to your mechanic, the rest is nearly profit. For the two services, the profit margin largely depends on how much you charge the vehicle owners and pay the technician. 

Sale of Service Parts

If you own an auto repair shop, opening a parts sale shop is another revenue stream you need to maximize your profit margins. To ensure customers’ trust, supply genuine parts from accredited car dealers. Experts say a repair can generate gross profit margins between 20 to 40 percent for each piece installed. 

Engine Tune-Up Services 

The engine tune-up service can include checking, diagnosing, and replacing spark plugs, wires, and distributor caps. Other services can include changing fuel filters, air filters, and oil filters. According to AutoZone , the engine tune-up service costs between $40 and $800, depending on what the service constitutes. However, the cost could be beyond the estimates based on vehicle type and replacement parts. 

Auto Body Repair 

Another profitable revenue stream for auto-repair shops is the bodywork. Statistics show that the labor charge on auto body repair ranges between $75 and $150 per hour. Luxury cars with pricier parts and requiring sophisticated technology cost more to repair. 

auto repair shop business plan philippines

How much does it cost to run an auto repair shop?

There are various recurring costs of running an auto repair shop and they include: 

  • COGS (40-50%) : this is the sum of the costs incurred to source the spare parts you need to purchase in your inventory to perform the repairs. It also includes things like paints, tools, etc
  • Rent (5-10%) depending on the location and surface. Prime locations will likely spend 10% or more whilst tier 2 locations spend 5% or less
  • Salaries (15-20%) . Salaries vary depending on the size of the auto repair shops. In general, expect to pay 15 to 20% of your revenues in salaries to pay for the mechanics, receptionists and any other administrative staff
  • Marketing (5%): mostly offline marketing (e.g. partnerships, billboards, etc.)
  • Operations and other (5%) : includes expenses like janitorial services, bookkeeping, etc.
  • Capex : these are capital investments incurred at the start of operations (e.g. refurbishment of the building, equipment, etc.). Although significant, the amount varies a lot depending on the size of auto repair you operate (see more on startup costs at the beginning of this article)

In general, it costs anywhere between $84,000 and $96,000 per month to operate an auto repair shop of 5,000 sq. ft. with 4 mechanics.

We’re including below the revenue to profits breakdown chart of a large auto repair shop generating over $6 million turnover per year (~12% net profit margin). The most important expenses by far are COGS (the spare parts, customs and delivery) as well as labor (staff salaries).

auto repair shop business plan philippines

How to forecast profits for an auto repair shop?

In order to calculate profits for an auto repair shop, you must first forecast revenues and expenses .

Profits = Revenue – Expenses

Forecasting revenue for an auto repair shop

Revenue can easily be obtained by multiplying the number of customers by the average order value (AOV).

Revenue = Customers x Average Order Value

For example, if you have 30 customers in a week spending on average $1,000 in repairs and maintenance, monthly revenue is about $120,000.

Forecasting expenses for an auto repair shop

There are 2 types of expenses for an auto repair shop:

  • Variable expenses : these are the COGS as explained earlier. They grow in line with your revenue: if your turnover increases by 10%, variable expenses grow by 10% as well
  • Fixed expenses : most salaries, rent, marketing and all the other operating costs listed above

Calculating profits for an auto repair shop

When we refer to profits, we usually refer to EBITDA (Earnings before interests, taxes, depreciation and amortization) as it represents the core profitability of the business, excluding things such as debt interests, non cash expenses and other non-core expenses.

In order to get to EBITDA, we use the following formula:

EBITDA = Revenue – COGS – Operating Expenses

To make it clearer, we’ve included below the profit-and-loss of an auto repair shop (from our financial model template for auto repair shops ).

Whilst gross margin (after variable costs) is rather low (~50-60%) as explained earlier, EBITDA margin can go up to 10-20% depending on the auto repair shop , and net profit margin up to 5-15% for the most profitable businesses.

Naturally, not all services have the same gross margin. For example, whilst scheduled maintenance have very high gross margins (80-90%) as little parts are used (if at all), other services like body repairs usually have lower gross margins (40-50%).

Indeed, a big part of the latter price you charge customers goes into the spare parts that you need to order and pay from your supplies (including transport, custom and delivery costs).

auto repair shop business plan philippines

What is the break-even point for an auto repair shop?

Break-even is the point at which total costs and total revenue are equal. In other words, the breakeven point is the amount of revenue you must generate to turn a profit.

Because you must at least cover all fixed costs (that aren’t a function of revenue) to turn a profit, the break-even point is at least superior to the sum of your fixed costs .

Yet, you also need to spend a certain amount for every $1 of sales to pay for the variable costs. As we just saw, auto repair shops typically have rather low gross margins (50-60%). That’s because almost a big part of expenses are variable costs (the spare parts among other things).

auto repair shop business plan philippines

The break-even point can easily be obtained by using the following formula:

Break-even point = Fixed costs / Gross margin

Using the same example earlier, let’s assume your auto repair shop generates $120,000 in turnover per month and has the following cost structure :

The break-even point would then be:

Break-even point = Fixed costs / Gross margin %

= $71,000 / 70% = $96,000

In other words, you need to make at least $96,000 in sales to turn a profit. Assuming a customer spends $1,000 on average, your break-even is 96 customers per month. In other words, you make profits once you have repaired or serviced 96 cars per month .

How to increase profits for an auto repair shop?

There are various strategies that you can use to increase the profits of your auto repair shop, and they include:

  • Customer Loyalty Programs : These programs can help to increase customer loyalty and increase their lifetime value
  • Offer Routine Services at a Flat Fee : Linear rate pricing encourages customers to return again and again
  • Give Service Warranty : Provide a service warranty which becomes a powerful marketing tool
  • Customer Referral Program : Reward your existing customers for driving referral traffic
  • Automation : Automate certain services such as booking to reduce labor costs and provide a better user experience
  • Reminders : Remind your customers about the service due date
  • Diversify Service : Expand the services you offer to attract more customers
  • Wholesale Purchase : Wholesale inventory purchase can reduce your COGS and increase profitability

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Auto Repair Business Plan

Written by Dave Lavinsky

You’ve come to the right place to create your Auto Repair shop business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Auto Repair shops.

Auto Repair Business Plan Example

Below is a template to help you create each section of your Automotive Repair business plan.

Executive Summary

Business overview.

Tim’s Timely Auto Repair is a startup auto repair shop located in St. Louis, Missouri. The Company is founded by Tim Martinez, an experienced auto mechanic who has gained valuable knowledge on how to manage an auto repair shop during the past 15 years while working at Fast Cars Auto Repair. Now that Tim has experienced managing an auto repair shop, he is ready to start his own company, Tim’s Timely Auto Repair. Tim is confident that his auto repair skills, combined with his understanding of business management, will enable him to run a profitable auto repair shop of his own. Tim is recruiting a team of highly qualified professionals to help manage the day-to-day complexities of auto repair shop operations – sales and marketing, customer service, and financial reporting.

Tim’s Timely Auto Repair will provide reliable auto repair services for customers in the St. Louis area. Tim’s Timely will be the go-to auto repair shop in St. Louis for convenient scheduling, quality work, and timely repairs. The Company will be the ultimate choice for busy individuals, providing the best customer service in the area.

Product Offering

Auto Repair will provide the following repair services for most vehicle makes and models:

  • Brake repair
  • Powertrain repair
  • Muffler & exhaust repair
  • Heating repair
  • Electrical system repair
  • Wheel alignment and repair
  • Preventative repair & maintenance

Customer Focus

Tim’s Timely Auto Repair will target personal vehicle owners in St. Louis. The Company will also target small businesses who use a vehicle for their company’s operations such as delivery drivers, plumbers, and other mobile businesses. No matter the customer, Tim’s Timely Auto Repair will deliver the best communication, service, and results.

Management Team

Tim’s Timely Auto Repair will be owned and operated by Tim Martinez. Tim is a graduate of Missouri University with a Bachelor’s degree in Automotive Technology. He has 15 years of experience working as an auto repair technician and manager of another local shop. Tim will be the Company’s CEO and the Head Auto Repair Technician. He will oversee the day-to-day operations, auto repair equipment management, and auto technician staff’s activities.

Tim has recruited his former administrative assistant, Jen Jackson, to be the Company’s Chief Operations Officer and help oversee the auto repair shop’s daily operations and customer relations. Jen has a Master’s degree in Business Administration. She has worked in the auto repair industry for many years and understands what it takes to effectively run this type of business.

Success Factors

Tim’s Timely Auto Repair will be able to achieve success by offering the following competitive advantages:

  • Skilled team of auto repair technicians who will be able to diagnose and repair a wide variety of vehicle issues in a timely manner.
  • Tim’s Timely Auto Repair makes it easy for customers to schedule appointments, pay for service, and check on the status of their vehicle through a user-friendly customer app.
  • The Company offers competitive pricing and discounts for regular customers.

Financial Highlights

Tim’s Timely Auto Repair is seeking $250,000 in debt financing to launch its auto repair business. The funding will be dedicated towards securing the auto repair shop and purchasing auto repair equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff and marketing expenses. The breakout of the funding is below:

  • Auto repair shop build-out: $100,000
  • Equipment, supplies, and materials: $40,000
  • Three months of overhead expenses (payroll, utilities): $90,000
  • Marketing costs: $10,000
  • Working capital: $10,000

The following graph below outlines the pro forma financial projections for Tim’s Timely Auto Repair.

Company Overview

Who is tim’s timely auto repair.

Tim’s Timely Auto Repair is a newly established auto repair business in St. Louis, Missouri. Tim’s Timely will be the first choice for vehicle owners in St. Louis and the surrounding communities for its reliable and timely repair services. The Company is able to service almost any vehicle make and model and has the ability to accommodate customers’ busy schedules.

Tim’s Timely Auto Repair will be able to guarantee the quality of its repairs thanks to the latest and most reliable auto repair equipment and technology combined with stringent quality control standards. The Company’s team of highly qualified professionals experienced in a wide range of automotive issues will be able to provide timely diagnosis and repair. Customers can easily schedule appointments, check on their vehicle, and make payments using the Company’s customer app.

Tim’s Timely Auto Repair History

Tim’s Timely Auto Repair is owned and operated by Tim Martinez, an experienced auto mechanic who has gained valuable knowledge during his 15 year tenure working as an auto repair technician and manager at another local auto repair shop. Now that Tim has gained the experience and knowledge of how to manage an auto repair shop, he is ready to start one of his own. Tim has begun recruiting a team of highly qualified professionals to help manage the day to day complexities of running an auto repair shop – sales and marketing, customer service, and financial reporting.

Since incorporation, Tim’s Timely Auto Repair has achieved the following milestones:

  • Registered Tim’s Timely Auto Repair, LLC to transact business in the state of Missouri.
  • Has begun negotiations to purchase the warehouse that will become the shop.
  • Reached out to numerous contacts to include past customers, local businesses, and friends and family members to start spreading the word about the new shop.
  • Began recruiting a staff of accountants, auto repair technicians, maintenance workers, and sales personnel to work at Tim’s Timely Auto Repair.

Tim’s Timely Auto Repair Services

Industry analysis.

The United States auto repair market is valued at $78B with approximately 280,000 businesses in operation and over 614,000 employees working in the industry across the country. The auto repair industry has grown steadily over the past five years. Much of this growth can be attributed to more vehicles on the road combined with an increasing age of the vehicles in service. Additionally, rising disposable incomes have led to more people foregoing DIY repairs, and instead, taking their vehicles to industry operators when they need to be repaired.

One of the biggest challenges facing the auto repair industry is the growing shortage of technicians as many are retiring and there are not enough new technicians joining the field to fill the vacancies. Additional challenges include increased digitization and evolving technologies. Industry operators will need to keep up with the latest innovations to remain competitive.

Customer Analysis

Demographic profile of target market.

Tim’s Timely Auto Repair will target vehicle owners in St. Louis. The Company will also target small businesses who use a vehicle for their company’s operations such as delivery drivers, plumbers, and other mobile businesses. No matter the customer, Tim’s Timely Auto Repair will deliver the best communication, service, and results..

The precise demographics for St. Louis, Missouri are:

Customer Segmentation

Tim’s Timely will primarily target the following customer profiles:

  • Individual vehicle owners
  • Delivery drivers
  • Mobile service providers who use vehicles for their business operations (e.g., plumbers, HVAC, mobile pet grooming, non-emergency medical transport, solar panel installers, etc.)

Competitive Analysis

Direct and indirect competitors.

Tim’s Timely Auto Repair will face competition from other companies with similar business profiles. A description of each competitor company is below.

Fast Cars Auto Repair

Established in 1975, Fast Cars Auto Repair is one of the largest auto repair companies in Missouri. The company provides a wide range of repair and maintenance services for many vehicle makes and models, with a focus on sports cars, luxury cars, and race cars. Fast Cars Auto Repair’s leadership team continuously introduces new technology and repair training for its staff to ensure all technicians are equipped to repair the latest model vehicles. The company has four locations in St. Louis, with more being built in the near future.

JP’s Affordable Auto Repair

JP’s Affordable Auto Repair is a small auto repair shop catering to local vehicle owners in St. Louis, Missouri and surrounding areas. JP’s Affordable Auto Repair provides efficient service at affordable prices. The company provides same day and 48-hour repairs for an extra fee. The owners of JP’s Affordable Auto Repair have been in the automotive business for over 40 years, so they keenly understand the ins-and-outs of running an auto repair shop.

Dependable Dan’s Auto Repair

Dependable Dan’s Auto Repair is a trusted St. Louis, Missouri-based auto repair shop that provides superior service to vehicle owners in St. Louis and the surrounding areas. The company is able to provide a wide variety of repair services for both personal and commercial vehicles. Dependable Dan’s Auto Repair has been family owned and operated since 1999. The company prides itself on being the number one choice for quality auto repair services at competitive prices.

Competitive Advantage

Tim’s Timely Auto Repair will be able to offer the following advantages over the competition:

  • Skilled team of auto repair technicians who are highly skilled and trained in a wide variety of vehicle issues to provide reliable results for almost any make or model.
  • Tim’s Timely Auto Repair makes it easy for customers to obtain the Company’s services. Customers can schedule appointments, check on their vehicle, and make payments through the convenience of the customer app.

Marketing Plan

Brand & value proposition.

Tim’s Timely Auto Repair will offer the unique value proposition to its clientele:

  • Tim’s Timely Auto Repair provides reliable results in a timely manner for most vehicle makes and models.

Promotions Strategy

The promotions strategy for Tim’s Timely Auto Repair is as follows:

Social Media Marketing

The Company will enlist the help of a marketing director to create accounts on social media platforms such as Linkedin, Twitter, Instagram, Facebook, TikTok, and YouTube.  The marketing director will ensure Tim’s Timely maintains an active social media presence with regular updates and informative content.

Professional Associations and Networking

Tim’s Timely Auto Repair will become a member of professional associations such as the Automotive Service Association, Auto Care Association, National Automobile Dealers Association, and the International Automotive Technicians Network. The leadership team will focus their networking efforts on expanding the Company’s customer network.

Print Advertising

Tim’s Timely Auto Repair will invest in professionally designed print ads to display in programs or flyers at industry networking events. The Company will also send direct mailers to local businesses who may be interested in auto repair services.

Publications

The Company will invest in advertisements in major industry publications such as Auto Body Repair News Magazine, Auto Inc., and Auto Service Professional publications. Additionally, the Company will invest in local advertising through newspapers, magazines, and community newsletters.

Website/SEO Marketing

Tim’s Timely Auto Repair will create a company website. The website will be well organized, informative, and list all the services that Tim’s Timely is able to provide. The Company’s marketing director will also manage the Company’s website presence with SEO marketing tactics so that when someone types in a search engine “St. Louis auto repair shop” or “auto repair shop near me”, Tim’s Timely Auto Repair will be listed at the top of the search results.

The pricing of Tim’s Timely Auto Repair will be moderate and on par with competitors so customers feel they receive value when purchasing the Company’s superior repair services.

Operations Plan

The following will be the operations plan for Tim’s Timely Auto Repair.

Operation Functions:

  • Tim Martinez will be the CEO and Head Auto Repair Technician. He will oversee the auto repair technicians, repair process, and the auto repair equipment maintenance. Tim has spent the past year recruiting the following staff:
  • Jen Jackson – Chief Operating Officer who will manage the bookkeeping, customer relationships, and help oversee the daily operations for the Company.
  • Andrea Miller – Accountant who will provide all accounting, tax payments, and monthly financial reporting.
  • Bill Smith – Marketing Director who will oversee all marketing strategies for the Company and manage the website, social media, and outreach.

Milestones:

Tim’s Timely Auto Repair will have the following milestones complete in the next six months.

11/1/2022 – Finalize contract to purchase property.

11/15/2022 – Finalize personnel and staff employment contracts for the Tim’s Timely Auto Repair management team.

12/1/2022 – Begin build-out of the shop and purchase equipment and supplies.

12/15/2022 – Begin networking at industry events and implement the marketing plan.

1/15/2023 – Finalize contracts for auto repair technicians.

2/15/2023 – Tim’s Timely Auto Repair officially opens for business.

Financial Plan

Key revenue & costs.

The revenue drivers for Tim’s Timely Auto Repair are the fees charged to customers in exchange for the Company’s auto repair services.

The cost drivers will be the overhead costs required in order to staff an auto repair shop. The expenses will be the payroll cost, utilities, auto repair equipment and supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

  • Average number of vehicles serviced per month: 450
  • Average fees per month: $15,000
  • Overhead costs per year: $140,000

Financial Projections

Income statement, balance sheet, cash flow statement, auto repair business plan faqs, what is an auto repair business plan.

An auto repair  business plan is a plan to start and/or grow your auto repair company business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your auto repair  business plan using our Auto Repair  Business Plan Template here .

What are the Main Types of Auto Repair Companies?

There are a number of different kinds of auto repair companies , some examples include: Auto Service Shop, Transmission Repair Shop, and Body Repair Shop.

How Do You Get Funding for Your Auto Repair Business Plan?

Auto repair companies are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. A thorough  business plan for auto repair shop will show investors you are well-prepared to start a business on your own.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Auto Repair Shop Business Plan

Start your own auto repair shop business plan

F and R Auto Repair

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

F & R Auto (F & R) is the desire of John Ford and Michael Ronald who together have 30 years experience as auto mechanics. Both have a dream of starting up their own company and offering better service to their clients than competitors.

1.1 Objectives

The objectives over the next three years for F & R Auto Repair are the following:

  • Sales revenues increase steadily through year three.
  • Institute a program of superior customer service through rigorous evaluation of service experience.
  • Hire three more mechanics.

Auto repair shop business plan, executive summary chart image

1.2 Keys to Success

In the auto repair industry  a company builds its client base one customer at a time and mostly through word of mouth marketing. With this in mind, the keys to success for F & R Auto Repair are:

  • High-quality work.
  • Constant contact with clients so as to keep them informed about the state of their automobile and the repair job progress.
  • Knowledgeable mechanics that are friendly, customer oriented, and will take the time to explain to customer the intricate nature of our business and our work.

1.3 Mission

The mission of F & R Auto Repair is to provide high quality, convenient and comprehensive auto repair at low cost. The most important aspect of our business is trust. It is the goal of our firm to have 100% customer satisfaction in regards to quality, friendliness, time to completion and to discover new ways to exceed the expectations of our clients.

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Company summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">.

The company will be a partnership with John Ford and Michael Ronald each owning 50% of the company. The company will be a limited liability company registered in the state of Washington. The firm will have facilities on 1312 1st Ave NW in Ballard, a neighborhood of Seattle. The facilities will contain a two-bay garage, office space and storage space for tools, parts, etc.

The company is seeking a  loan in order to finance the start of operations for the company. Each of the owners will be putting up some of their own capital as equity.

2.1 Start-up Summary

The data obtained for the start-up comes from research done in the Seattle area with other small mechanic shops who have started their own business. Inflation has been taken into account between the estimates of these fellow business owners (and when they started) and the current prices for expensed items.

Much of the equipment to go into the facilities such as tools, air compressors, etc., are currently owned by the two partners.

Auto repair shop business plan, company summary chart image

F & R Auto offers a wide range of services as outlined in the detailed sections below. It is ultimately the goal of the company to offer a one-stop facility for all auto servicing needs, including brakes, transmission, wheel alignment, etc. In this way the company can offer greater perceived value for the customer than many other shops which specialize in certain areas.

The industry is highly competitive with suppliers having a great deal of power in setting and negotiating the prices of their products and services to repair shops. In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors, buyer power is also very high. Finally, the barriers to entry are moderately low, and the large number of competitors in this field, including substitutes (such as do-it-yourself work) mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively or to create higher switching costs through the building of strong business to customer ties.

F & R Auto will hire trained and certified mechanics who are able to prove they have superior customer awareness and interaction. It is the company’s professional people who will fulfill the firm’s contracts and goals. The largest part of the company’s expenses will be in labor costs.

3.1 Service Description

F & R Auto provides a wide range of auto repair services. These include:

  • Scheduled maintenance.
  • Wheel alignments, tires and rims.
  • Brake repair.
  • Comprehensive engine repair.
  • Transmission.

Each job or project will be on a reservation basis, although we will accept a small percentage of drive in repair work.

3.2 Competitive Comparison

The auto repair industry is highly competitive. Each company within this field has high capital costs, low margins, and a high intensity of competition.

 Suppliers have a great deal of power in setting and negotiating the prices of their products and services to repair shops. This is due to the fact that the suppliers who absorb the greatest amounts of cash from repair shops are large auto part companies. These companies are more consolidated that the repair industry, have deeper pockets, an almost limitless number of substitute customers, and finally they are the single most important supplier to F & R’s industry. Therefore, these companies can set whatever price they wish to. Furthermore, labor is a supplier in this industry as well, and salaries for such individuals are well known and not very flexible.

 In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors (if they offer a suitable level of quality) buyer power is also very high. Additionally, the costs of our services are not cheap, and buyers are willing to search for the most favorable combination of price and acceptable service.

 The barriers to entry and exit are moderately low in this industry. Switching costs are virtually non-existent and the costs to entry and exist the market are low. The large number of competitors in this field including substitutes mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively to all aspects of the business or to build up customer relations to a point where the switching costs are raised.

3.3 Technology

The technological revolution in computers has enhanced our abilities to diagnose and repair our clients vehicles. F &R will remain on the cutting edge by instituting the use of computer diagnostic equipment in its shop. The company will continue to seek new ways to provide a better service through technology.

3.4 Future Services

The company does not have any plans to create further services at this time.

Market Analysis Summary how to do a market analysis for your business plan.">

Since F & R will be able to service any vehicle on the road, including motorcycles and campers, it does not make any sense to segment our market. Our potential customer includes every household in Seattle that owns one or more vehicles. The industry does not have any seasonality that affects it.

4.1 Market Segmentation

The following table and chart show the market analysis for F & R Auto Repair.

4.2 Service Business Analysis

This section is covered in the Competitive Comparison section of the Plan.

4.2.1 Competition and Buying Patterns

While many customers looking to purchase automotive repair services are concerned with price, the primary concern is with building a relationship of trust between themselves and their service provider. A large number of people within the country have experienced or heard of bad service encounters within this market. As a person’s car is usually connected in one way or another with that individual’s livelihood, a dependable automobile is crucial. Therefore, many clients are willing to pay a little more for a mechanic they feel does a quality job and understands their needs.

An automotive repair company that can anticipate, meet, and even exceed customer’s needs can build a defensible position within the market place and acquire market share at the expense of other rivals.

4.2.2 Main Competitors

As stated before, the automotive repair market is very fragmented. The chief competitors in this industry for F & R are the high quality automobile dealerships and licensed service reps. This includes Toyota, Ford, Chrysler, and other major brand names. Within F & R’s immediate service vicinity, There is Rodham’s Toyota, Lester Ford and Woodmark’s Chrysler dealerships. Each of these direct competitors have a service facility. These competitors dominate the market place, have the largest market share, and have advantages such as specially trained personnel, access to lower priced parts and tools, and deep pockets. The other competitors are mostly “mom & pop” style outfits that make up the majority of the competition. For F & R this includes Dave’s Auto Repair, The Taller Mechanico, Kirkland Auto and Body, and Vancouver Auto. The advantages of these firms is that they can seek a low cost leadership strategy due to lower personnel costs. However, they have a much more fluid customer base and higher customer turnover.

F & R will seek to compete initially in the low cost strategy. At the same time, it will seek to provide a higher level of customer satisfaction by having more rigorous quality control and seeking ways to enhance the entire service experience (not just repairing a person’s car). In this way it will lock in a loyal customer base who value the client-service provider relationship.

4.2.3 Business Participants

The auto repair industry is highly fragmented. In fact, there are so many small providers that any company in this industry is facing a purely competitive environment. It is very difficult to create a differentiation, or niche, strategy in this environment and until F & R is able to establish a reputation for quality, on time, superior customer service, the company will seek a low cost role. Once it has achieved what management believes to be a sufficient reputation for its services along with a profitable customer base, the company plans to leverage this advantage into a differentiation strategy that will be able to charge more for its services.

Strategy and Implementation Summary

The following section outlines the company’s strategic focus in growing the business.

5.1 Competitive Edge

F & R Auto’s competitive edge lies in the vision of its partners, who understand better than many of their rivals that a service visit does not just include repairing a client’s car, it includes the entire service experience from the first time a client talks to their mechanic until they decide to stop driving. The long-term profitability of a service firm of this type lies in the repeat customer that finds F & R’s services an excellent experience, DESPITE the fact that they usually have suffered a inconvenient breakdown. The company will seek to examine ALL aspects of the service experience to seek ways to improve its customer satisfaction. In addition, all employees will be rigorously trained and retrained to think about customer satisfaction in order to create a self-sustaining company culture that revolves around this issue.

5.1.1 Positioning Statement

It is the express purpose of F & R to become the local leader in quality and service experience of all the small (non-dealerships) automotive repair firms within the Seattle area while maintaining a low cost plan. Once a reputation for quality and service experience is created, and an ongoing network of referrals is bringing in new business, the company plans to re-evaluate its strategy and positioning within the market to see if a differentiation strategy is viable. If so, this will allow the company to raise prices and increase profit margins in relation to its rivals. This in turn is expected to leverage long-term growth until F & R can reach a regional scope of operations.

5.2 Marketing Strategy

The company has a modest program of marketing its services that include the following:

  • Direct mailers.
  • Newspaper ads.
  • Yellow pages.
  • Referrals through other local businesses.

Each of these marketing approaches has the advantage of being low cost and creating service awareness. The company’s long-term marketing goals are to use local radio and TV ads similar to the Les Schwab Tire Center ads.

The company is also investigating the possibility of having a grand opening program that would feature discounts, food, a local radio disc jockey, and other promotional ideas.

5.2.1 Promotion Strategy

The principal owners of F & R Auto expect that a significant number of their pre-existing clients (where Ford and Ronald currently work) will desire to switch to F & R Auto to retain the services of their personal mechanics. This will provide a sufficient income until F & R can build up a reputation and see its marketing program take effect.

This promotion strategy will take the form of flyers, direct mailers, price discounts, and advertisements in newspapers and yellow pages. F & R does not desire to spend a large amount on marketing until the firm is ready to expand either into new facilities or open up new ones. It is estimated this will occur sometime after year five.

5.2.2 Pricing Strategy

F & R Auto exists in a purely competitive environment where each firm must be a price taker. In other words, the firm has no ability to affect the market price of its services, regardless of how many automobiles it repairs. In this case, therefore, marginal revenue (the revenue incurred by producing or servicing one more unit) is equal to the price charged. Furthermore, because the demand curve is essentially horizontal, F & R can service automobiles at total capacity without effecting the price.

What all of this means for F & R Auto is that the company must seek to charge its clients at the market price (or lower). Research has shown that the average price is approximately $400 per vehicle. As long as marginal costs do not exceed revenues, the method to maximize short-run profits is to service automobiles at maximum capacity. This means that F & R Auto can expect an ROA of approximately 4.5%

5.3 Sales Forecast

Since the automotive repair industry is, operationally, a job-shop environment, it is somewhat difficult to estimate sales. For job-shops, each individual product or service is tailored or unique to that job, and is only initiated once an order is made. However, the sales forecast reflect the professional opinion of Mr. Ford in how much sales he will make based on the following assumptions:

  • The number of clients Ford and Ronald can attract from their previous companies.
  • The effect of planned promotions and word-of-mouth marketing.
  • Current prices and costs of doing business.
  • The types of automobiles and jobs that will occur in every month.

For the most part, sales for an automobile repair firm are steady year round and reflect little seasonality.

The table and charts below outline the sales forecast.  Three years of annual sales and costs of sales are shown.  Twelve monthly tallies are included in the appendices.

Auto repair shop business plan, strategy and implementation summary chart image

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

John Ford began working as an apprentice mechanic in his father’s shop in 1984. Since that time, he has worked for a variety of automotive shops and dealerships and has numerous certificates in automobile repair. During the past two years Mr. Ford has attended Bellevue Community College where he received an Associates degree in business administration in June of 2000.

Michael Ronald attended ITT Technical Institute where he received a certificate in electronics repair in 1980. In 1983 Mr. Ronald went to work for Jim Click Ford Dealership in Tucson AZ, where he worked on automotive electrical and electronic systems. Desiring to expand his skills, Mr. Ronald received a mechanic’s certificate in 1988 and since then has become certified in various automotive fields. In anticipation of F & R’s business needs, Mr. Ronald is taking night classes at Seattle University in marketing.

6.1 Personnel Plan

F & R’s initial staffing will consist of Ford and Ronald, plus Ronald’s wife who will act as a part-time office manager. The company will seek two entry level mechanics to be hired within a few months after the company is operating. Accounting, bookkeeping, and marketing services will be outsourced. The company’s intermediate goal is to have four full time, fully trained mechanics at the original facility, plus a full-time office manager. However, management has decided to await future developments before determining the best time to bring on such personnel.

Financial Plan investor-ready personnel plan .">

The following sections outline the financial plan for F & R Auto Repair.

7.1 Break-even Analysis

The company’s Break-even Analysis is based on an average company’s running costs within this industry, including payroll, and its fixed costs for such things as rent, utilities, etc.

Auto repair shop business plan, financial plan chart image

7.2 Projected Profit and Loss

The following table and chart show the projected profit and loss for F & R Auto Repair.

Auto repair shop business plan, financial plan chart image

7.3 Projected Cash Flow

The following table and chart are the projected cash flow figures for F & R.

Auto repair shop business plan, financial plan chart image

7.4 Projected Balance Sheet

The following table shows the projected balance sheet.

7.5 Business Ratios

The Business ratios give an overall idea of how profitable and at what risk level F & R Auto will operate at. The ratio table gives both time series analysis and cross-sectional analysis by including industry average ratios. As can be seen from the comparison between industry standards and F&R’s own ratios, there is some differences. Most of these are due to the fact that there is a very large variance in assets, liabilities, financing, and net income between companies in this industry due to the vast differences in company size.

Overall the company’s projections show a company that faces the usual risks of companies in this industry and one that will be profitable in the long-run. The company shows that it has higher SG&A costs than other competitors, however management has deliberately overstated costs and minimized profits in order to create a “safe” or “buffer” zone in case of hard times or other unforeseeable problems. Pre-tax return on net worth and pre-tax return on assets appears to be very high, especially within the first two years, however this is due to the fact that the company will be operating with fewer assets than most companies in the first few years until it can build up enough cash to acquire the tools and facilities that are desired and go beyond the “adequate” level.

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Auto Repair Shop Business Plan Template [Updated 2023]

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I. Executive Summary

This Section's Contents

Business Overview

Products served, customer focus, management team, success factors, financial highlights.

[Company Name] is a local auto repair shop in [Location] that provides top-quality auto repair and maintenance services to its customers. It caters to companies and individuals who require a fast and professional auto repair service.

[Company name] is a proud member of the Automotive Service Association (ASA) and the National Institute for Automotive Service Excellence (ASE). All of our auto mechanics are ASE-Certified Technicians. We are constantly training so that our auto mechanics can stay up-to-date on all the latest developments in the fast-changing world of auto repair technology.

[Company Name] will provide its clients with the following services:

  • Oil and Filter Change
  • Tire Rotation and Services
  • Brake Repair Service
  • Engine Services
  • Tire Change Service
  • Transmission Services
  • Scheduled Maintenance

[Company Name] will primarily serve the residents within a 25 mile radius of our location. The demographics of these customers are as follows:

  • 47,824 residents
  • Average income of $80,500
  • 40% married
  • 55% in Mgt./Professional occupations
  • 65% of residents are homeowners
  • Median age: 35 years

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder] has been in the auto repair industry for the past 20 years. He has spent much of his career working with [company] where he oversaw the operations for different auto repair companies and automotive shops. There, he learned sales, customer service and automotive maintenance processes.

[Company name] will also employ an experienced assistant manager to manage the day-to-day operations.

[Company Name] is uniquely qualified to succeed due to the following reasons:

  • [Company Name] will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to make use of our services when launched.
  • Our location is in a high-wealth area where customers own automobiles and can afford regular auto repair services.
  • The management team has a track record of success in the auto repair services business.
  • The auto repair business has proven to be a successful business in the United States.

[Company Name] is seeking a total funding of $350,000 of debt capital to open its auto repair business. The capital will be used for funding capital expenditures and location build-out, salaries, marketing expenses and working capital.

Specifically, these funds will be used as follows:

  • Location design/build: $150,000
  • Working capital: $200,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Comments are closed.

Auto Repair Shop Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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List of 10 most trusted auto services centers & repair shops in the Philippines

Updated Dec 29, 2020 | Same topic: Best Advice for Car Buyers

Top 10 best auto repair service centers and repair shops in the Philippines

Looking for a trustworthy, reliable, and “value for your money” car repair shop nowadays is hard.

There are many horror stories that we’ve heard from countless car owners whose cars weren’t repaired in a timely manner or experiencing added stress from unscrupulous business owners who nickel and dime their customers. Or worse, outright scams.

A picture of a woman and a car mechanic

To help you our dear readers, here’s our list of top 10 best auto service centers and car repair shops in the Philippines. This list is in no particular order, will feature some shops from outside of Metro Manila, and it will also cover some specialists who focus on particular parts of a car. Check out our post to find car repair centers near your area.

Note: This article is by no means exhaustive and this is more like our top 10 list. 

>>> Related:  5 essential tips for choosing the right Auto Repair Shop

1. Drift Xaust

  • Address: Valley Fair Town Center, Ortigas Ext., Taytay Rizal, Philippines 1920
  • Contact numbers: 09174646222

While not a repair shop per se, Drift Xaust can provide your car a reliable, race-engineered exhaust system that is designed to increase your car’s engine output significantly.

Drift Xaust can locally produce highly advanced exhaust systems because like you and me, they’re actually really passionate car enthusiasts who have extensive experience in motorsport, specifically drag racing and circuit racing.

That pretty much explains how they’re incorporating their performance know-how into streetcars.

A picture of the Drift Xaust Mustang at the Drift Xaust Shop

Drift Xaust, a shop owned and managed by a car enthusiast open for everyone 

Drift Xaust can provide you with full exhaust systems, cat-backs, axle-backs, K and N Air Intake system, a speed booster, and front-mounted intercooler systems.

2. Goodyear Servitek

If you aren’t living under a huge rock, then you might’ve heard of Goodyear . If you haven’t heard of them, then they’re a tire and rubber company and they’re huge.

Being a huge tire company, Goodyear has shops spread all around the world and those shops are called Servitek.

A picture of a Servitek branch in Metro Manila

Goodyear's in the tire business for a long time so they know what they're doing

Apart from selling tires, Servitek can provide wheel alignment services, car batteries, change oil, suspension repair, and brake repair. So essentially, they’re a full-on auto repair shop  except for car electronics.

>>> Related:  4 things you should know to let car servicing save your money

Founded by Mr. Rommel Naguiat, a professional automotive technician, Motech was initially known as Ride Center Phils. Inc. In 1994, the name changed to Motech Automotive.

At that time, the company also entered a partnership with the Technical Education and Skills Development Authority or TESDA.

In the present, MOTECH now has several branches all around the Philippines. They now have a total of 32,000 individual customer entries in their database.

A picture of a Motech brand in Metro Manila

Motech. They work closely with TESDA and that's a sure sign of quality

In 2017, they entered their 40th year which is a significant milestone for a local business.

Apart from providing car repair and maintenance services, Motech also sells car batteries, car tires, car washing implements, and many other automotive accessories.

Motech also has Motech Plus which is a membership kind of arrangement that includes 24/7 emergency roadside assistance, personal accident insurance, and discounts.

For more details about the nearest Motech in your area and how to contact them, visit the official Motech website .

4. Yock’s Auto Electrical Repair Shop

  • Address: 517 Epifanio de los Santos Ave, Quezon City, Metro Manila
  • Contact No.: (02) 8514 8094

While we’ve talked about tire specialists, exhaust specialists, and auto repair generalists, it’s time we introduce a repair shop that you can turn to whenever you have electrical problems with your car.

Those issues, after all, can become common with older cars and it can become quite stressful especially when the starting your car is involved.

A picture of the Yock's Auto Electrical Repair Shop

Yock's can also handle all kinds of electronics issues. Even on marine engines

And that’s what exactly what Yock’s Auto Electrical Repair Shop can do. They can address alternator issues, and car starting issues. Apart from that though, Yock’s can also fix all kinds of AC/DC motors and generators.

>>> Related:  List of popular car aircon repair shops in the Philippines

5. Notorious Motorsports

  • Address: 8280 Dr. A Santos Ave., Sucat, at the back of SM Hypermarket, Parañaque
  • Contact No.: 09175359355

According to Notorious Motorsports themselves, they’re the one-stop-shop for addressing “kalampang” issues, engine problems, brake issues, wiring optimization, car AC repair, turbo installation, and sound set-up installation.

Apart from those, Notorious Motorsports, as the name implies, also sell performance parts, car accessories, OEM parts, as well as mags and tires.

A picture of the Notorious Motorsports garage

As the name implies, they're big on making things go FAST

6. V-MAC Car Display Center and Auto Repair Shop

  • Address: In front of SM City, Quimpo Boulevard, Ecoland, Davao City, Philippines
  • Contact No.: 0999007786/ 09306248689/ 09367060717

Established way back in February 2011, V-MAC Car Display initially sold 2nd-hand surplus cars from Korea and Japan.

Nowadays, V-MAC also has a  car repair shop capable of providing headlight restoration, paint restoration, car repair, oil change, brake pad replacement, car accessories, and pick-up truck bed liner installation.

A picture of a V-MAC employee installing car window tints

Yes, their shop also does tint installation

>>> Related:  Top 10 Most Common Vehicle Repairs

7. Cars 101

  • Address: 518 Quijano Compound, V. Rama, Calamba, Cebu City.
  • Contact No.: +63 922 691 3228

Another specialist in this list Cars 101 and they can provide premium painting for all kinds of vehicles from motorcycles to SUVs. Apart from painting, Cars 101 can also fix car dents and scratches.

A picture of Cars 101's shop with a car mid-paint job

Cars 101 is one of the best car paint shops in Cebu

8. Rapide Auto Service – Car Repair

  • Address: Guzman Street, Mandurriao, Iloilo City
  • Contact No.: (033) 500 4754

As one of the largest car repair shop franchises in the Philippines, Rapide has branches from Mindanao to Luzon. And one of the most trusted car repair shops in Iloilo City is in fact, one of theirs.

A picture of Rapide's Iloilo Branch

Rapide's Iloilo branch

As for Rapide as a whole, their company provides basic car maintenance which is on par with the quality a “casa” can provide.

If you want to know more about Rapide, you can visit the official Rapide website. They even have an online estimator and you can also set your appointments on the website.

>>> Related:  Car maintenance & repair: How to have it done in Banawe Street

9. Rapide Auto Service Zamboanga

  • Address: Zamboanga, 7000 Zamboanga Sibuguey
  • Contact No.: 09356445691

Like we’ve said, Rapide is one of the largest car shop franchises in the country. As such, they also have a very popular branch located in Zamboanga City.

10. Mike’s Auto Repair Shop

  • Address: Balite Dr. Iligan City, Lanao Del Norte

Mike’s Auto Repair Shop is one of the more obscure ones here on this list. It’s not a large franchise like Rapide but they’re services are as diverse.

More diverse even because they actually have an in-house bodywork specialist, a car paint specialist, and Mike himself is a very level headed and patient mechanic that can address mechanical problems even for the most obscure of vehicle models.

A picture of the intersection in front of MIke's Auto Repair Shop

Follow the red arrow, and you'll find Mike's

Mike’s specialization, however, is his godlike skill when it comes to diagnosing and repairing Kei trucks, a.k.a. multicabs.

>>> Related:  How to avoid getting ripped off with your auto repairs

Best auto service centers in the Philippines: A must for the car owner

A trusted mechanic is your best friend regardless of what kind of car you own. He or she is someone you can turn to when you’ve reached a wall with regards to your project car, as well as the person who you can turn to when purchasing a used vehicle.

Note also that this article is by no means is this article exhaustive though because we're quite sure that there are thousands of mechanics and car repair shops here in the Philippines who are worthy of your trust.

As such, we hope this list has helped you get an overall idea of trusted car repair shops near you. And for more useful articles like this, keep reading here on Philkotse.com .

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Cesar G.B. Miguel

Cesar Guiderone B. Miguel was born and raised in Iligan City, Lanao Del Norte. He graduated in 2010 with a Bachelor of Arts in English degree from Mindanao State University - Iligan Institute of Technology. He previously worked as a freelance writer for various websites, as a member of the Iligan City Disaster Risk Reduction Management's training staff, and as a medical sales representative.

Facebook:  https://www.facebook.com/goridus.goridus

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IMAGES

  1. How to write a stellar business plan for an auto repair shop

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  2. Business Plan Auto Repair Shop

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  3. How to Write A Business Plan for an Auto Repair Shop

    auto repair shop business plan philippines

  4. FREE 3+ Auto Repair Service Business Plan Samples in PDF

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  5. Auto Repair Shop Business Plan Template

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  6. How to Create an Auto Repair Shop Business Plan?

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COMMENTS

  1. How To A Start Auto Shop Business Philippines

    1. Build A Robust Business Plan & Strategy The first stage of any great idea is creating a plan and strategy. The plan is essentially what you are aiming to do with your business. For example, earn 100K Pesos a month or serve 10,000 customers.

  2. How to Start an Automotive Service Shop in the Philippines (2022)

    Blog How to Start an Automotive Service Shop in the Philippines (2022) Advertisement The Philippines' automotive industry is growing. Last year was a "recovery year" for new car and truck sales. The used car market also has seen growth. As Filipinos buy vehicles, the need for automotive services increases as well.

  3. 8 essential tips for starting auto repair business in the Philippines

    4. Have your business officially registered Inquire about getting the shop name registered and other requirements that will be needed to make the auto repair shop official. Ask about fees and other miscellaneous expenses to get the amount ready, and how long it will take for official registration.

  4. Auto Repair Shop Business Plan: Guide & Template (2024)

    Plans starting from $7/month Things to Consider Before Writing an Auto Repair Business Plan Select what area of repairs you'll work on Auto repairs shops take up a variety of jobs like repairing and painting car bodies, transforming old vehicles, or doing tire and mechanical repairs.

  5. How to Write an Auto Repair Shop Business Plan + PDF| Bplans

    Many business plans include the following sections: Executive summary Company overview and funding needs Market and competitive analysis Products and services Operational plan Business structure Marketing and customer acquisition strategies Financial planning and projections

  6. Auto Repair Shop Business Plan Example

    1.1 Objectives The objectives over the next three years for F & R Auto Repair are the following: Sales revenues increase steadily through year three. Institute a program of superior customer service through rigorous evaluation of service experience. Hire three more mechanics. Need actual charts?

  7. How to Write an Auto Repair Business Plan: Complete Guide

    Remi January 24, 2023 Services 👇 Check all our resources on auto repair businesses 👇 📘 Business Plan 💰 Startup costs 📊 Financial plan 🔎 KPIs 📈 Profits & Break-even Whether you're looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your auto repair shop, you will need to prepare a solid business plan.

  8. How to create a financial forecast for your auto repair shop

    Your sales forecast The best way to start your financial forecast for an auto repair shop is by setting out a sales forecast. This will give you a better idea as to the potential turnover of your auto repair shop.

  9. Pros and Cons of Auto Repair Shop Franchise vs Starting Your Own

    For many entrepreneurs, the automotive repair industry is an appealing and profitable business. Opening an auto repair shop can be a rewarding and profitable venture, whether you are an experienced mechanic or someone with a passion for vehicles. However, deciding whether to start your own business or buy a franchise can be a difficult decision.

  10. How to write a stellar business plan for an auto repair shop

    On the menu: Why do you need a business plan? What type of auto repair shop should I open? What do you need to create your auto repair shop business plan? What is the financial forecast for an auto repair shop? What does the written part of an auto repair shop business plan look like? What tool should I use to write my business plan?

  11. How to write a winning auto repair shop business plan

    Home Plan How to write an effective auto repair shop business plan Key takeaways An auto repair shop business plan will provide a blueprint for the launch of your business and increase your chances of success Investors and lenders use business plans to determine whether your auto shop can reach profitability

  12. Vic Car Services Business Plan

    Customer Focus Vic Car Services will primarily serve the residents within a 25 mile radius of our location. Specifically, the target customers are from barangays San Isidro, City Heights, and Mabuhay area. Management Vic Car Service's most valuable asset is the expertise and experience of its founder, Victor Buhat.

  13. How Profitable are Auto Repair Shops? Profits & Break-even

    If you are planning to open an auto repair shop, you need to understand how you can turn your revenues into profits.In other words, you must know how much revenue you must generate to reach break-even and make profits. The auto mechanics industry in the US is valued at $78.4 billion in 2022, growing at +1.9% CAGR from 2017-2022.. According to Jerry, Americans spent $1,986 on average in 2019 on ...

  14. Auto Repair Business Plan (2024)

    Written by Dave Lavinsky Auto Repair Business Plan You've come to the right place to create your Auto Repair shop business plan. We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Auto Repair shops.

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    Start your own business plan. Start planning. Your business plan can look as polished and professional as this sample plan. It's fast and easy, with LivePlan. F and R Auto Repair auto repair shop business plan appendix.

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    Financial Highlights. [Company Name] is seeking a total funding of $350,000 of debt capital to open its auto repair business. The capital will be used for funding capital expenditures and location build-out, salaries, marketing expenses and working capital. Working capital: $200,000 to pay for marketing, salaries, and lease costs until [Company ...

  17. List of 10 best auto services centers & repair shops in the Philippines

    6. V-MAC Car Display Center and Auto Repair Shop. Address: In front of SM City, Quimpo Boulevard, Ecoland, Davao City, Philippines. Contact No.: 0999007786/ 09306248689/ 09367060717. Established way back in February 2011, V-MAC Car Display initially sold 2nd-hand surplus cars from Korea and Japan.

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