Successful Automotive Business Instructions: The steps to open a garage

The Steps To Open A Garage

You are passionate about mechanics, and you dream without becoming your own boss? If you are motivated and organized, opening a car garage can actually be a very nice project.

In this article we will guide you through the unavoidable steps to build your business and open car maintenance and repair business.

Understanding the structure of the market and its trends

Before heading down to open a garage, you should take the time to familiarize yourself with the market. The instructions provided by Steve Voudouris, president and CEO of Philadelphia-based Turn 5,  are useful for successful automotive business.

A competitive market

It is therefore important to carefully consider the competitive dynamics at the local level to ensure that the local market is not saturated before creating your garage.

Authorized repairer, network members, or independent garage

The car garages market comprises 2 types of actors:

  • Repairers approved by manufacturers to repair vehicles of the brand
  • And independent garages called MRA (Automobile Repair Mechanic)

MRAs can be specialized in mechanics, electronics or bodywork. Moreover, these garages may or may not be adherent to a network of garages.

The choice of the type of garage and the affiliation or not to a network will have significant consequences for your company. You backing a brand or network well known to the public will allow you to benefit from their notoriety, and therefore probably attract more customers. On the other hand, an affiliation will have clear consequences in terms of costs and freedom in the management of your business.

The steps to open a garage

Garage

Now let’s see what the big steps are to open a garage.

Market research

Market research is an essential step in the preparation of your project.

It is designed to enable you to validate the viability of your project in terms of business, upstream of the launch of your business. It allows you to reduce the risk of failure.

To conduct your market research seriously, you will need to:

  • Analyze demand in the local market: who are your potential customers? How many are they? What are the buying triggers (breakdown, revision every x kilometers, need specialized equipment such as winter tires for example)? How do they choose their garage (do they prefer proximity, brand or price)?
  • Study the existing offer: who are the competitors and what do they offer? How do you differentiate yourself?
  • Think about the choice of suppliers: where do you go for your spare parts? What are the commercial conditions offered by each (price, choice, quality, payment deadlines, delivery time, minimum quantity per order, etc.)?
  • Study the regulation of the sector: If being a good mechanic is important, do not forget the administrative part. A good knowledge of the laws, but also of the standards to respect is necessary. Here are some aspects of the regulation: the mechanic is subject to an obligation of result, he is obliged to display at the entrance of the establishment of the hourly rates TTC and prices inclusive of the flat rate benefits proposed. There are also strict rules for troubleshooting and towing vehicles. Finally, measures on waste management are increasingly strict.

The choice of status and the registration of the company

Create a company or set up a sole proprietorship , there are several possible legal status to open a garage and you will have to study the advantages and disadvantages of each before choosing one that suits you best.

You must also register your company in the commercial register .

The garage business plan

Open A Garage

Another crucial step: the realization of the garage business plan. The business plan has 2 objectives: to allow you to verify that the profitability of your garage is real, and to help you convince your financial partners.

What should the business plan of a garage contain?

The business plan of a garage contains 2 main parts:

  • An editorial part aimed at presenting the project and highlighting its strengths, as well as the relevance of the commercial and operational strategy
  • A financial component aimed at highlighting the need for financing of the project and demonstrating its potential for profitability

The key points of the business plan to open a garage

Here are 2 elements that it is important to bring out in the business plan of your garage:

Do not underestimate the necessary investments

Opening a car garage requires making substantial investments, which will also have to be maintained and renewed regularly.

Your financial plan must therefore provide sufficient profitability to enable you to cope with the costs of maintenance and renewal of equipment.

Differentiate from the competition

The auto centers already have a well-established clientele. To differentiate yourself from the competition, you will have to propose something that is not found elsewhere and for which your future customers will come, and especially come back.

Your differentiation axis should be clearly highlighted in your business plan to convince your financial partners of the relevance of your business strategy.

How to carry out the business plan of your garage

A good way to carry out your garage business plan is to use a business plan software .

Indeed, using specialized software allows you to be efficient and to gain maximum time:

  • You start with a detailed plan and are guided by written simple instructions and examples to follow
  • The software takes care of the calculations and prepares your financial statements on the basis of the data entered
  • You get a professional document, already formatted, that you only have to transmit to your financial partners
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