It’s no longer just a matter of putting Bondo in a dented quarter-panel and buffing it out – collision repair shops have a wealth of precision tools at their disposal to make their jobs easier, and send the customer home with a car that looks brand new. Smaller shop owners and those just starting up may be a little overwhelmed with the choices when it comes to sourcing equipment, and you’ll quickly find that the things you needed in your home garage for your personal fix-it projects just don’t measure up when you’re trying to launch a professional service.
Startup costs may run about $100,000 to $150,000 (more if you’re in a big city and real estate costs are high), and most of that will be tied up in repair equipment – but don’t neglect to set some aside for marketing and advertising so you can get the word out once you’re up and running. Compared to startup costs for many other types of new businesses, this is a fairly affordable type of venture. Be aware though, if you’re thinking of buying into a franchise, startup costs will be considerably more.
If you’re like most entrepreneurs, you’re hoping to get started on the low end of that scale, and a $100,000 startup budget is certainly realistic. It may not buy you a huge eight-bay shop at a busy intersection, but it can easily be a pathway to a solid income.
Besides costs like incorporation, shop rental, staff, accounting, advertising and signage, your most immediate concern is the equipment you’ll need to perform your services.
Lifts. Before you can do any repairs, you’ll need to get the car off the ground, and you can usually find a good lift for somewhere between $4,000 and $10,000. A two-post lift can be found for as little as about $3,000, and this is adequate for nearly every type of project. A four-post lift is more expensive, but may provide better access to the undercarriage.
Diagnostics. Listening to the engine running and going with your instincts may be part of the process, but you can’t run a shop on instinct. Count on spending at least $10,000 for diagnostic equipment if you’re doing any sort of engine repairs.
Mechanic’s tools. You can easily spend $10,000 to $15,000 to outfit your shop with tools, but a good place to start is with a good basic all-inclusive tool set which will have most everything you need to get started. Auto Body Toolmart has these available for $2,099.99, and it includes the most frequently used tools in a rollaway tool chest. You will find you need more as you go along – how many times have you started a project in your own personal garage, and had to make three or four extra trips to the auto supply shop? We’ve all done that. You will need more specialized tools as you get going, but this basic setup will get you going on a budget.
Paint booth. If you have the space for it, auto painting can be a lucrative additional service. You’ll need an automotive paint booth to get the job done, spray more efficiently and reduce emissions. There is a big price range here, anywhere from about $6,000 to $25,000, depending on how sophisticated you want to get, but the lower-cost ones will get the job done. Look for a crossdraft booth for optimum air flow.
Beyond the gadgets
Outfitting your startup collision repair shop will be the biggest expense, but it shouldn’t be the only expense. As with any new business, you will need to spend some money on things like desktop computers, accounting software and services, incorporation fees and local licensing, and printing.
Signage is essential too, and a prominent sign in front of your shop is your best type of advertising. Don’t skimp on this! Go with a professional sign company and make sure it’s visible from a distance.
One area a lot of automotive startups ignore is marketing and advertising, and ignoring that is the most frequent path to failure. No matter how good you may be at what you do, it won’t matter if people don’t know you exist. Include at least $10,000 in your startup budget to get started with a basic advertising and marketing campaign, which may include things like radio advertising (much lower cost than television), and a strong online presence. Avoid the temptation to use those do-it-yourself website services, which tend to be inflexible. And remember – you’re an expert at fixing cars, but you may not be an expert in marketing and web design. Leave it to the professionals and get it done right.
With the right equipment, a good marketing campaign and a good reputation, you can easily launch your own auto collision repair shop on a budget, and start turning a profit your first year in business.