Are you ready to turn the key on your own auto repair empire? If so, then you have landed on the right page because we will give you a road map about how to start an auto repair shop. Whether you’re a seasoned mechanic or a newcomer to the game, this guide will give you the confidence to make your dreams a reality.

Just remember, starting an auto repair shop is no Sunday drive. It takes hard work, dedication, and a little bit of grease to open an auto repair shop. But, with our guidance, you’ll be cruising down the highway of success in no time! 

So, let’s get started and learn how to start a mechanic shop and make your garage the hottest pit stop in town.

Here’s 10 Steps Guide To Starting a Profitable Auto Repair Shop

Welcome, FOLKS! Now you don’t have to keep worrying about how to start a mechanic shop, because I will be sharing all strategies that can help you own an auto repair shop.

It’s time to get your hands dirty and start your own mechanic shop. Starting a car repair shop requires careful planning and hard work because you have to jiggle many balls at once!

Moreover, you’ll need to have strong technical skills and stay up-to-date with the latest advancements in automotive technology, like using auto repair store system.

Let’s have a look at how to start a mechanic shop

Let’s Create a Powerful Auto Repair Shop Business Plan

Let’s begin with a question. What is the first thing that comes to mind when you think about how to start a mechanic shop?

Money? Expertise? Right? But the most important thing is having a well-thought-out business plan.

Tip: You can download your business plan template from here

If I say here that starting an auto repair shop is a wild ride, and a solid auto repair business plan is like your trusty GPS – it’ll help you navigate the twists and turns on the road to success. That would be true! 😌

Before opening an auto repair shop, you have to put your pedal to the metal, and come up with questions like how will you run your auto shop day-to-day? Who will you hire, what services will you offer, how to start a small mechanic shop, how much does it cost to open a mechanic shop, and what kind of equipment will you need? 

These questions will be helpful for you because they will give your plans perfection and you will know a rough average cost to open an auto repair shop. You can discuss these questions with different business experts, talk to garage owners and friends before putting your legs into the sea. 

This is the planning stage, so the more you know, the better you perform!

Ignite Your Vision 

Light the fire in your belly and define your purpose. What kind of shop do you want to run? Who are your dream customers? What sets your shop apart from the rest? Write down your bold goals and the unique selling points of your business.

Conduct a Thorough Reconnaissance 

Scout out the competition, explore the local market, and get to know your target customers like the back of your hand. This information will fuel your vision and help you make confident, data-driven decisions before starting an automotive business.

Crunch the Numbers 

Determine your costs, expenses, and revenue projections with precision. This will give you a crystal-clear understanding of the average cost to open an auto repair shop and help you avoid any roadblocks on your journey to success. 

Polish it to Perfection 

Your business plan for an auto repair shop should be a masterpiece that showcases your vision, research, and financial projections. Edit it with precision, and don’t be afraid to seek feedback from experts in the industry. This will help you to start a successful car repair business.

auto repair business location


Here we come to another point that is important to consider before opening a mechanic shop. Finding a sweet spot to set up your repair shop. Your business location matters the most! I repeat THE MOST!

What do I mean by sweet spot? An IDEAL spot for your auto repair shop that gives you a lot of customers and ROI (return on investment).

Below I’m going to list all the important factors that you need to consider before choosing a perfect location for your automotive mechanic shop. 


A location that’s easy to reach is key to keeping customers coming back. Make sure it’s a place with a good visibility, plenty of parking space, and close proximity to major roads. Otherwise, you might end up stuck in neutral.

Customer Demographics

Get to know your target audience and where they’re located. If you’re aiming for a certain neighborhood, make sure you don’t park yourself in the wrong gear.


Don’t follow the crowd and set up shop where there’s already too much traffic. Look for a location that’s open road, with plenty of room for you to rev your engines and stand out from the crowd.


A great location shouldn’t break the bank. Find a spot that’s both affordable and provides enough foot traffic to keep your cash flow positive.

Brand Image and Name

Your location sets the tone for your brand image. A clean, well-maintained shop will help you establish a positive reputation and create a professional image, giving your business a smooth ride. Here are some auto repair shop name ideas you can use!

choose right services for your auto repair shop business

Choose Right Services for Your Mechanic Shop Business

Choosing the right services for your new automobile shop is just as important as choosing the right location. In other words, your success is directly proportional to the services you offer at your auto repair shop. 

Consider these factors when choosing services for your mechanic repair shop.

Relevance to Your Market 

Offering services that are in demand in your local market will help you attract and retain customers. For example, if you’re located in a cold climate, offering winterization services like antifreeze checks and battery tests can be a big selling point for your customers.

Competitive Advantage 

By offering unique services, you can stand out from other auto repair shops and attract customers who are looking for something different. For example, if you offer a car detailing service in addition to basic repairs, you can attract customers who value having a clean and well-maintained vehicle.

Increased Revenue 

Offering a wider range of services can help you increase your revenue by attracting more customers and generating more income from each customer. For example, if you offer a brake repair service, you can also offer brake pad replacement, which can increase the amount of revenue generated from each brake repair job.

Better Customer Experience 

By offering a range of services, you can provide a more comprehensive and convenient experience for your customers. For example, if you offer a mobile repair service, you can save your customers time and effort by coming to their location to perform repairs.

types of auto repair shops

Types of Auto Repair Shops

If you are thinking about starting your own automotive repair business, one of the first things you’ll need to decide is what type of repair shop you want to run. Here are a few options to consider:

Mobile Repair Shop

This type of shop offers repair services at the customer’s location, which can be a convenient option for busy customers. You don’t need a shop to become a mobile mechanic. You can even start a mechanic business from home.

Dealership Service Centers 

These types of shops are owned and operated by car manufacturers specializing in repairing and maintaining vehicles under their brands.

Independent Shops 

These shops are owned and operated by individual business owners and are not affiliated with a particular car manufacturer. 

Tip: Are you looking for ways to start a car detailing business? Read this informative blog.

estimates for starting an auto repair shop

Estimated Costs to Run a Car Mechanic Workshop

Starting an auto repair shop can be a lucrative business venture, but it’s important to be prepared for the cost estimates for an automotive repair shop.

Here’s a breakdown of the startup costs and running costs of a car repair shop you’ll need to be aware of:

Cost/ExpenseStart-Up CostOperational Cost
Rent or lease of commercial space$1,500 – $15,000 per month$1,500 – $15,000 per month
Equipment and tools$10,000 – $100,000 or moreDepends on maintenance needs
Inventory and supplies$5000+Depends on demand, and restocking needs
Legal and insurance costs$500 – $5,000Depends on insurance needs
Staff salaries and benefits$100,000 +Depends on a number of employees and benefits
Marketing and advertising$1000+Depends on marketing strategies 

Establish a Legal Structure for Your Auto Repair Shop

Establishing legal requirements for opening a garage is a crucial step in the process of starting your own auto repair business. 

By forming a legal entity, you’ll be separating your personal and business finances, minimizing your personal liability, and creating a more professional image for your business. 

Some of the most common legal entities for small businesses include sole proprietorship, limited liability company (LLC), and corporation.

Tip: Get free advice on legal structures from here.

Register for Taxes

Registering for taxes is important for starting an auto repair shop because it is a legal requirement in most countries. Failing to register can result in penalties and fines. 

By registering, you obtain a  tax identification number which is required for opening bank accounts, applying for business loans and other financial transactions. 

Registering for taxes also allows you to collect sales tax from your customers, which is a source of revenue for the government. Furthermore, it helps to establish the legitimacy of your business and can increase credibility with customers and suppliers. 

To register for car repair taxes, you typically need to follow these steps:

Choose a business structure: Decide on the legal tax strategies for the auto repair shop, such as sole proprietorship, partnership, LLC, or corporation.

Obtain an Employer Identification Number (EIN): An EIN is a unique tax identification number assigned by the Internal Revenue Service (IRS) for tax purposes. You can apply for an EIN online, by mail, or by fax.

Register for state taxes: Depending on the state where your business is located, you may need to register for state sales tax, state income tax, or other state taxes.

Register for local taxes: Some cities and counties may require you to register for local taxes, such as business license taxes or local sales taxes.

Register for taxes specific to your industry: If you operate an auto repair shop, you may be required to register for specific taxes, such as gasoline taxes or hazardous waste taxes.

Auto Repair Shop License

Permits & Licenses

Why do you need permits and licenses to start an auto repair shop? Well, think of it this way – you wouldn’t perform surgery without a medical license, would you? And you wouldn’t drive without a driver’s license, right? So why would you start a business without the proper permits and licenses?

These permits and mechanic licenses are like the keys to the kingdom. They grant you the official “thumbs up” from the powers to run your auto repair shop legally. 

Some common permits and auto repair shop licenses that may be required include:

Business license

A business license is usually required by the city or county where your shop is located. It gives you permission to operate a business within the jurisdiction.

Zoning permit

A zoning permit verifies that your business is allowed to operate in the designated area and that it meets local zoning regulations.

Environmental permit

Depending on the type of repair work you perform, you may need to obtain an environmental permit for handling hazardous waste or disposing of automotive fluids.

Auto repair license

Some states require auto repair shops to obtain a specific license. This license may be issued by the state’s department of motor vehicles or a separate regulatory agency to make you a licensed auto repair shop.

car repair business bank account

Opening a Business Bank Account

Having a dedicated business bank account and credit card can provide a strong protective barrier between your personal and business assets. This is important because in the event of bankruptcy or legal action against your business, your personal assets will be protected by the corporate veil.

In addition to the protection offered by the corporate veil, having a business bank account also provides a number of financial benefits. For example, with a business bank account, you may be eligible for more favorable interest rates and higher lines of credit.

By establishing a credit history for your business through the use of a dedicated business credit card, you’ll also be better equipped to secure financing in the future. This can help ensure the growth and success of your auto repair shop.

Set Up an Accounting Flow for your Car Repair Shop

Setting up an accounting flow for opening an automotive repair shop is important for several reasons:

Financial Transparency

An accounting flow provides a clear and organized record of your business transactions, including expenses, revenue, and cash flow. This helps you keep track of your finances and make informed decisions about your business.

taxes for mechanic shop

Tax Compliance

An accounting flow can help you comply with tax regulations by providing a complete record of your business transactions. This makes it easier to file accurate tax returns and avoid costly mistakes.

Budgeting and Forecasting

Having a clear understanding of your financial situation through an accounting flow can help you create a budget, set financial goals, and make informed decisions about the future of your business.

Improved Decision-Making

With access to accurate financial information, you’ll be better equipped to make informed decisions about your business, such as expanding your services, investing in new equipment, or hiring new employees.

Protects against Fraud

By establishing an organized accounting flow, you can help prevent fraudulent activity and protect the financial health of your business.

Tip: Want to make sure your business startup succeeds? You can use this financial plan template for your new business.

Payment Plan For Auto Repair Shop

Having a clear and flexible payment plan for your new auto repair shop is important to attract and retain customers. Here are a few things to consider when creating a payment plan:

Accept multiple payment methods: Offer options such as credit/debit cards, cash, checks, and even mobile payments to make it convenient for customers to pay.

Offer financing options: Partnering with a lender or offering in-house financing options can help customers who are unable to pay upfront.

Set clear pricing: Make sure to clearly communicate the cost of services, parts, and any additional fees so customers are aware of what they are paying for.

Implement a payment schedule: Consider offering a payment schedule for larger repairs that allows customers to pay in installments, making it easier for them to manage their finances.

Offer discounts and promotions: Running promotions and discounts for certain services can encourage customers to choose your auto repair shop over the competition.

Auto Repair Shop Insurance

Get Auto Repair Shop Insurance 

Have you ever heard the old saying, “hope for the best, but prepare for the worst”? Well, that’s exactly what getting business insurance for your mechanic shop is all about!

Think of it this way, you’re a master at fixing cars, but accidents and mishaps can happen even to the best of us. And let’s face it, no one wants to be blamed for a garage fire or a client who slips in motor oil. That’s where auto mechanic insurance comes in to play the hero.

Not only does it protect you from those “uh-oh” moments, but it also gives your customers peace of mind knowing that you’re fully prepared to handle any unexpected situations. Plus, with coverage options like property damage and workers’ compensation, you can ensure that both your business and your employees are protected.

So, don’t wait for disaster to strike. Get yourself automotive repair shop insurance and sleep easy knowing that you’re covered. 

Automotive Tools & Equipment

Set Up Tools and Equipment

Having the right automotive tools and equipment is crucial for running a successful auto repair shop. Here are a few key points to keep in mind when setting up your workspace:

Essential Tools

Make sure you have all the necessary tools for your line of work, such as wrenches, sockets, pliers, and diagnostic tools. Invest in high-quality tools that will last and make the job easier.

Automotive Tools & Equipment

Depending on the services you offer, you may need auto repair tools such as lifts, tire changers, and brake lathes. Make sure to research the equipment that you’ll need and invest in high-quality, durable options.


Keep your workspace organized by using vehicle repair tools & equipment boxes, wall-mounted racks, and labeling systems. This will save time and reduce frustration when searching for auto shop tools and equipment.

Safety Equipment

Make sure to invest in automotive equipment for safety, such as gloves, goggles, and protective clothing. Not only will this protect you and your employees, but it will also give your customers peace of mind knowing that you take safety seriously.


Regularly maintain your tools and equipment to keep them in good working condition. This will prolong their life and ensure that you’re always ready to tackle any job that comes your way.

What are Necessary Tools For Opening a Mechanic Shop

Starting an auto repair shop requires a variety of tools, some of which are necessary for basic services, while others are needed for more specialized work. 

Here is a list of some of the essential tools you will need to get started:

Hand tools: wrenches, pliers, screwdrivers, and sockets.
Power tools: drill, impact driver, grinder, and air compressor
Jacks: hydraulic floor jack and stands.
Engine diagnostic tools: OBD-II scanner, multimeter, and vacuum gauge.
Brake tools: brake caliper tools, brake bleeding kit, and brake lathe.
Suspension and steering tools: ball joint press, tie-rod end tool, and spring compressor.
Electrical tools: circuit testers, wiring crimpers, and soldering iron.
Body and frame tools: hammer and dolly set, body file, and MIG welder.
Lifting equipment: two-post lift, four-post lift, and engine hoist.
Tires and wheels tools: tire changer, wheel balancer, and bead breaker.

Having these essential tools should provide you with a solid foundation to start your auto repair garage.

auto repair software

Go Digital, Get Yourself An Auto Repair Software

Going digital in your new auto repair shop is like having a superhero sidekick, but instead of fighting crime, it helps you run your business smoothly and efficiently. And who wouldn’t want their own personal superhero, right?

Gone are the days of trying to keep track of everything with a pen and paper or multiple spreadsheets. With auto repair invoicing software, you can streamline all of your invoices into one central hub. 

No more shuffling through stacks of papers or searching for lost invoices. Everything you need is just a few clicks away.

From managing appointments and invoicing to tracking your expenses and generating reports, automotive shop software has got your back.

Think of it as a personal assistant, but one that doesn’t take breaks, call in sick or demand a raise. It’s always there for you, ready to take on whatever task you throw its way.

And the best part? You get to be your own boss and accountant. No more dealing with outside managers or accountants who don’t know the first thing about your business. You’ll have complete control and can make decisions that are best for your car workshop.


Become Your Own Super Hero

Are you still thinking about how to start an auto repair shop? Because I’m about to share a magical software that can help you set up your shop like a pro.

Let’s be real. As a business owner, your plate is already overflowing with responsibilities. You shouldn’t have to add manual data entry or repetitive administrative tasks to the list. Auto repair estimating software lets you create digital estimates, and lets you focus on what you do best – fixing cars.

So, if you’re ready to make your life a little easier and your business a little smoother, get yourself an auto repair software.

Moreover, there are a plethora of benefits that you can get from an auto repair software which include:

Improved Customer Experience

With an auto repair software, you can provide your customers with real-time updates on their vehicle status, appointment scheduling, and invoicing. This can lead to a more satisfied customer base and improved customer retention.

Increased Productivity

Automating tasks such as appointment scheduling, invoicing, and parts ordering frees up time for your staff to focus on other tasks, leading to increased productivity and improved overall performance.

Better Inventory Management

With the ability to track your parts and supplies in real-time, you can avoid overstocking or running out of important items, leading to improved efficiency and cost savings.

Improved Financial Management

An auto repair store software can help you track your expenses, generate reports, and stay on top of your finances, making it easier to manage your business and make informed financial decisions.

Access to Data and Insight

With data on customer behavior, appointment history, and more, you can gain valuable insights into your business operations and make data-driven decisions to improve performance.

auto repair digital marketing

Don’t Miss: Your New Auto Repair Shop Needs Digital Marketing

Welcome to the fast lane, where having a killer auto repair shop is just the starting line. To truly speed ahead of the competition, you need to harness the power of auto repair digital marketing services

​Think about it – you’ve got the skills and tools to fix any car problem under the hood, but are you reaching the right customers to show off your expertise? As an auto repair shop owner, you know how important it is to have the right tools and equipment to do the job. 

But what about your marketing tools? 

Without a solid online presence, your shop may be missing out on potential customers who are searching for auto repair services in your area.

That’s where auto repair shop marketing strategies come in! Yeah, today customers are more likely to search for your shop online before physically visiting your shop. Having a business website and social accounts on Instagram, Facebook, and Tiktok is important to grow the authenticity of your new auto repair business.

Moreover, with ​​auto repair digital marketing services, you’ll be able to target car owners with specific needs, showcase your services and special deals with ease, and build a solid online reputation that will have customers lining up at your shop.

So, don’t let your auto repair business be left in the dust and get started with automotive digital marketing services today! Find out how to attract more customers and profits in your auto repair shop.  

ATTRACT Customers to Your Shop

Gone are the days of relying on word of mouth and waiting for customers to visit your shop. With the power of the internet, you can now target specific car enthusiasts and put your top-notch services right in front of their eyes.

By creating a strong online presence, you can showcase your expertise, offer valuable tips and tricks, and build trust with potential customers. 

Following digital marketing trends help you reach a wider audience, and also allows you to target specific demographics and get your services in front of those who need them most.

growth for business

Build a STRONG Business Identity

A clear and consistent brand message across all your marketing materials will help you establish credibility and build trust with potential customers.

Start by defining your brand values and messaging. What sets you apart from other reliable auto repair shops? What do you stand for? Answering these questions will help you develop a unique brand identity that resonates with your target audience.

Create a User-friendly Website

Your website is the GPS that will guide customers to your garage. Don’t let a confusing, outdated website be the reason why potential customers drive right by. Invest in a user-friendly website that’s as smooth as a brand-new Porsche.

Picture this: You’re cruising down the road, and your car starts making a suspicious noise. The first thing you do is whip out your phone and Google “auto repair near me.”


A list of auto repair shops pops up, and you start clicking through websites. If the first website you land on looks like it was built in 1999 and is harder to navigate, chances are you’ll keep scrolling.

On the other hand, if you land on a website that is easy to use, with clear navigation and eye-catching visuals, you’re more likely to stick around and take a closer look. 

That’s the power of a user-friendly website – it gives you a chance to make a great first impression on potential customers and show them that your auto repair shop is the one they should choose. 

So getting an attractive website for your business is important to set yourself apart. Oh, and did I mention about SEO optimization? Your automotive website needs to be SEO optimized because it can help you rank on the first page of Google. 

social media marketing fro auto repair shop

Create Your Community On Social Media

Your customers are scrolling through their feeds all day, every day, and you know what they say, “Out of sight, out of mind.” So, make sure your shop is seen and heard on the social media scene.

You can share information about your services, promotions, and events. Engage with your followers by responding to comments and messages, and encourage them to leave reviews. 

By regularly posting content that is relevant and interesting to your target audience, you can establish your brand as a trusted and reliable source of information in the auto repair industry. 

Make sure to choose the right platforms for your business, such as Facebook, Instagram, and Twitter, and create a strong brand voice that is consistent across all channels. This will help you build a loyal following and increase the visibility of your auto repair shop online.

If you don’t know how to get started with social media platforms, auto repair marketing companies can help you achieve your goals in no period. 

Register Your Auto Repair Shop To Business Listings

Let’s get into a scenario.

If you were lost on the side of the road and needed a quick fix for your car, what’s the first thing you’d do? Check your trusty phone and search for the nearest auto repair shop, right? That’s why it’s crucial to make sure your shop is listed on business directories like Google Business Profile, Yelp, Craigslist and others.

Not only does this make it easier for customers to find you, but it also helps establish your shop’s online presence and improve your search engine ranking. 

And the best part? It’s as simple as filling out some basic information about your business, and you’re good to go! So don’t get left behind. Make sure to register your auto repair shop on these listings today.

retain customers for your mechanic shops

Retain Your Customers

Retaining customers is key to the success of any business, and your auto repair shop is no exception. A happy customer is not only more likely to return for future services, but they are also more likely to refer others to your shop. 

Automotive customer retention is important because they keep your cash flow positive in your shop. And you are more likely to sell them more services compared to a customer in your shop.

Here are a few customer retention strategies for the automotive repair business: 

Offer exceptional customer service. Make sure each interaction with a customer is pleasant, informative, and efficient.

Provide quality work at a fair price. Your customers will appreciate a job well done at a fair price, and they will be more likely to return for future services.

Keep in touch. Send occasional emails or direct mail to keep your customers informed about new services, promotions, or other news related to your shop.

Ask for feedback. Ask your customers how you’re doing, and take their comments to heart. Use their feedback to make improvements that will keep them coming back.

start selling for your car repair shop

Start Selling

Your new auto repair shop is finally open for business, and it’s time to rev up your marketing engine! Start by inviting the neighborhood to your grand opening with promotional discounts, free maintenance services, and more. 

Not only will it bring in customers, but it’ll also give them a chance to experience the quality of your services.

Don’t limit yourself to traditional methods of advertising like flyers and local papers. Get ahead of the curve and take your business online. 

Digital marketing is your secret weapon to creating targeted awareness for your brand and reaching a wider audience. 

So, let your customers know you’re open for business and ready to fix their ride with the latest and greatest in the auto repair world.

You’ve invested months of planning and hard work into your new auto repair shop, now it’s time to sit back, relax, and let the experts help you take your automotive business to the top!

Closing Words

In conclusion, starting a successful auto repair shop requires careful planning and execution. The process of how to start an auto repair shop involves obtaining the necessary licenses and insurance, creating a solid business plan, and finding the right location. 

However, with a clear understanding of the requirements and a strong commitment to providing exceptional customer service, you can set yourself up for success.

One of the first things to consider when starting a mechanic shop is your target market. Are you going to focus on luxury or high-end vehicles, or are you going to cater to a more budget-conscious clientele?

This decision will impact the type of equipment you need, the type of services you offer, and the prices you charge.

Another important factor to consider when starting a mechanic shop is your location. You want to be in a place that is easily accessible to your target market, but also offers enough space for your equipment and employees. 

Consider the surrounding competition and how you can differentiate yourself from them to attract more customers.

In addition to these factors, it is crucial to create a solid business plan that outlines your financial projections, marketing strategies, and staffing requirements. 

By following these guidelines, you can open the doors to a successful auto repair business.

Pro Tip: If you are thinking about how to start a profitable RV repair shop, here’s a super informative blog that can add value to your decisions. 


How much profit does an auto repair shop make?

The profit that an auto repair shop can make varies greatly based on factors such as the size of the shop, the services offered, the cost of labor and parts, and the local market. However, according to industry sources, the average net profit margin for an auto repair shop is around  20-30%.

How to run a successful automotive repair shop?

Running a successful automotive repair shop requires a combination of technical expertise, good customer service, and strong business practices. Key steps to success include developing a solid business plan, obtaining the necessary licenses and insurance, investing in high-quality equipment and tools, building a team of skilled mechanics, and regularly seeking customer feedback to improve your services.

Do you need a license to be a mechanic?

Yes, in most states, you need a license to be a mechanic. The specific requirements for a mechanic’s license vary by state but typically involve passing an exam and meeting minimum education and experience requirements.

How do you calculate labor costs for auto repair?

Calculating labor costs for auto repair involves considering the hourly rate of the mechanic, the amount of time the repair is expected to take, and any additional costs such as benefits, taxes, and insurance. To accurately calculate labor costs, it is important to track the actual time spent on each repair, and regularly review your labor rates to ensure they are in line with industry standards.

How to start a small mechanic shop?

To start a successful car repair business, you should follow these steps: develop a business plan, obtain necessary licenses and insurance, secure a suitable location, invest in quality equipment and tools, hire skilled mechanics, create a pricing strategy, market your services, and regularly seek feedback from customers to improve your services continuously. By approaching each step with professionalism and due diligence, you can build a thriving car repair business that provides high-quality services to customers.

What permits do I need to open a mechanic shop?

To open an auto repair shop, you will need to obtain a business license and a zoning permit from your local city or county to ensure compliance with local regulations. You may also need an environmental permit if your shop uses hazardous materials or waste.