How to Open a Collision Repair Shop

Consider opening a collision repair shop if you always want to learn from your mechanic or help friends out with repairs.

This is a solid business because there’s always a steady market that would need auto body paint jobs, detail work, or repair work after collisions.

Steps in Opening your Collision Repair Shop

In order to open a collision repair shop, you would need to make a list of different types of services requiring auto body repair. Your shop should repair collision damage from accidents as well as common scratches on the vehicle’s body. Other common services include electrical repairs and panel replacement, brake system repairs, and body alignment. Here are the steps to start this type of business:

Be knowledgeable. Try to attend educational programs to teach you new ways in repairing damaged vehicles. You can also learn through getting experience in another shop through on-the-job training.

Purchase tools. Common tools include dent pullers, paint guns, and sand blasters. Remember that you also need to purchase various safety gears such as respirator, gloves, and goggles when you repair the vehicles.

Hire staff. Either you perform the repairs yourself or hire mechanics to do the job for you. It’s recommended that you find people with experience in repairing damaged or wrecked vehicles.

Organize a business plan that lists all the equipment and tools you need such as insurance, salaries, shop rent, and other concerns. You can view a business plan guide through the Small Business Administration (SBA) of the U.S. website. Determine the strengths and weaknesses of your shop operations as well as the opportunities and threats to watch out for. Plans should be included for staffing and marketing. Also make sure that you can itemize these things to secure good financing.

Locate an accessible space for rent. Sometimes, auto body repair shops can be housed in industrial or low-rent areas as well as close proximity to expressways and gas stations. Ask friends and scour ads to find available repair shops for lease. You can also seek out the help of commercial real estate agents in finding the perfect facility to house your shop. Weigh the advantages and disadvantages of renting the place versus buying it. This decision will definitely be based from the plans and start-up funds you have. As a tip, it’s best to search for venues with pre-existing garages or shops since these places offer most things you may need in your facility.

Register your business. It’s more convenient if you visit the IRS (Internal Revenue Service) website and complete their online forms to obtain an EIN (Employer Identification Number). Once you have completed the forms, you can now collect and pay tax on your sales with the local and state department of revenues. Also make sure that you get a business license from the city government before you operate your collision repair shop. A small fee may be asked at your local city hall.

Secure a small loan or use your credit line in opening your shop. A collision repair shop is generally a low-risk business venture money-wise. Obtain funding by speaking with a loan officer at a credit union or local bank to learn about business and commercial loans available to assist you in starting up your collision repair shop. Take note that you should submit your business plan and loan application too. Check with SBA if you’re qualified to have a guaranteed loan. If not, you must take an investment partner to take on the loan. Remember that if you hire the right people and plan your business well, you will be on your way to great profit.

Finally, set your rates. Don’t go too low and always be competitive. It’s best if you could research on the prevailing rates and set similar prices as the shops in your area.

Promote your Collision Repair Shop

Once your business is up and running, you need to promote and market it to the general public. There are many ways to do this – you can place ads through radio, print, or television; put a website together; or network with towing companies.

There are a lot of opportunities out there because according to Bureau of Transportation Statistics, there are over 250 million vehicles registered on the road. Because of this, accidents are not far behind. Every single day, there is a need for a collision repair shop to put these vehicles back in shape and return them on the road where they belong.

1 Comment

  • Richard Jackson said on September 10, 2015
    Sparks Nevada, USA


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