Business plan for an auto repair shop: how to put one together

Opening a shop without a plan means betting your own money in the dark. Many people enter the industry because they know mechanics, only to discover that knowing cars and running a business are different skills. A business plan for an auto repair shop is the document that organizes that transition: it shows what the shop will offer, to whom, what it will cost and when it should pay off. Here is how to put yours together.

Define the business

The first step is deciding what the shop will do. A repair shop can focus on different services, and the structure it needs changes a lot depending on that choice:

• painting
• wheel alignment and balancing
• engine tuning
• electrical work
• steering systems
• auto parts sales, which do not involve repairing vehicles

To explore the options, see our content on types of repair shops.

Analyze the market

With the business defined, it is time to look outward. A market analysis answers questions such as:

• who will your competitors be?
• what threatens your shop?
• which opportunities can generate profit?
• what will set you apart?
• does the location work in your favor?
• who is your audience and your ideal customer profile?

Plan your marketing

The marketing plan defines how the shop will be found and chosen. It includes setting prices for products and services, how you will attract customers, your service standards and follow-up after the job, with post-service satisfaction surveys.

Build the operating plan

This covers the physical setup and day-to-day operation. Decide whether you will buy or rent the property, estimate energy and water costs, list the equipment your mechanics will use and start negotiating with suppliers.

Calculate startup investment and working capital

Add up everything you will spend before opening day and plan your monthly fixed costs, such as rent, wages and bills. Then calculate your working capital, the money needed to keep the shop running while revenue does not yet cover expenses. With these numbers, you can also estimate how long it will take to recover your investment. Do not forget to set aside an emergency reserve.

Get the shop licensed

To open its doors, the shop needs registrations and licenses. In Brazil, the most common requirements include:

• National Registry of Legal Entities (CNPJ)
• registration with the Commercial Registry (Junta Comercial)
• state tax registration
• registration with the State Treasury Department
• Fire Department authorization
• Health Surveillance license
• municipal operating permit

Since rules vary by city and type of activity, confirm the list with an accountant and your local city hall. If you are just starting out, also see where to begin when opening a repair shop.

Start with organized management from day one

A plan only works if operations follow it. Onmotor's auto repair shop system helps you control work orders, inventory and finances from opening day. See the Onmotor plans or talk to our team.

Find more content on repair shop management on the Onmotor blog.