17 Best Automobile Body Shop Design Plan

4. Get advice directly from a local government office. There are often city, county, and state-level small business centers that are tasked with the enforcement of business regulations. Auto body shops require various special licenses and permits, and these offices can tell you what you will need and help you get it. The SBA can help link you up with local offices that can inform you of the regulations you’ll need to meet.

• Auto-repair shops must have permits to do business, as well as specific permits to perform particular types of jobs, such as paint-removal and painting.
• It’s helpful to know about any pertinent regulations during the planning phase, to incorporate any potential costs or other issues associated with meeting these requirements.

Automobile body shop

5. Specify your expected revenue for the first few years. Aside from knowing where business will come from, you also need to know how much – and how fast – the business can be expected to grow. Be able to articulate where, specifically, money will come from, as well as what operational expenses will be. For instance, initial and recurring costs must be recorded, as well as a loan repayment plan, and the level of profits that are expected each month or quarter.

• Forecast these figures for the first three years after opening.
• Decide on the prices your shop will charge for specific services. These can be used alongside your anticipated customer projections to determine revenue estimates.
• Establish a “break-even” point. This is the point at which the business will be generating revenue, as opposed to spending money as it gets up and running. It may take longer to “break even” than you initially realize.
  

  Read on: How to Start Automobile Repair Business

6. Determine the amount of funding you’ll need. Simply stated, you need to know how much money you’ll need to open the business and maintain operations until your shop starts generating revenue. If you intend to borrow money by way of a loan, it is especially important to determine a concrete dollar amount to ask for. Unfortunately, there’s no ballpark number, since differences in location, equipment, and shop size can cause start-up costs for auto body repair shops to fluctuate considerably. This is partly why is so important to develop a solid business plan, as it is the best way to accurately estimate your start-up costs.

• Know that SBA-insured loans are one of the best sources of funding for a small business. This is another reason you should follow the SBA’s guidelines when developing your business plan.

Automobile body shop

7. Over-estimate equipment and materials expenses. Equipment expenses are commonly underestimated. While you may be able to save money buying used equipment, there is a greater chance of unforeseen costs associated with maintaining older equipment. A good rule of thumb: estimate your initial equipment and inventory expenses and increase the number by thirty percent. While this may seem like a huge amount of money, it’s far better to wind up spending less than expected than it is to wind up needing to borrow more.

• For example, if you estimate needing $100,000 dollars’ worth of equipment to open the shop, plan to secure funding for $130,000 dollars’ worth of equipment.
• Make a detailed list of all the equipment you’ll need and its cost. This should include everything: lifts, wheel balancers, hoists, paint guns, paint mask, and the decorations in the reception area.
• If you intend to lease some equipment, consider a SBA-backed loan, which may offer you a low interest loan with no down payment to pay for equipment.

See also: 13 Tips to Start Toyota Automotive Repair Business

9. Be willing to invest in the best location you can find. In simplest terms, plan to open an auto body shop in the best location you can afford. In particular, you want a location that is easily accessible from major roads. Ensure any location you’re considering is zoned for commercial use. Taking out a slightly larger loan to help finance a business in a location where it is more likely to succeed may even allow for you to negotiate a lower interest rate.

Automobile body shop

10. Consider opening an auto body franchise location. You have the option of franchising your business as opposed to opening and running your own business from the ground up. The main benefit of franchising is a considerable reduction in the likelihood that your business fails. This relative advantage is based on multiple factors, including name recognition, large scale marketing, and “tried-and-true” managerial and operational procedures.

• To find out about franchising options in your areas, contact the corporate offices for the auto body repair “chains” that are popular in your state. Be sure to contact them all, and be aware that they may be willing to meet or beat another franchise’s offer. Seek the advice of an account and/or lawyer regarding any specific legal or financial questions you have.
• Of course, there are costs associated with franchising. The bottom line is that you’ll make a smaller portion of what your shop pulls in, though this depends on your specific franchising agreement. On the other hand, you may also avoid costs that may be incurred if you open a business on your own and make errors that a franchising agreement may have prevented.

Read on: 9 Ways to Post an Automobile fix it Procedure

11. Conduct formal market analysis. Assess whether a market exists for the type of business you hope to open. In the most basic sense, a comprehensive business plan helps identify potential issues before they arise. In particular, ensure that there’s actually business to get!

• Specific statistics to look out for include the number, age, and types of vehicles in the area you’re considering. Additionally, find out what insurance companies are commonly used in the area, and how many similar businesses you’d be competing with.

Automobile body shop

12. Develop relationships with paint and parts companies. Large businesses that you may want to work with can offer you a wealth of knowledge, and potentially even assist you. Often, these companies will make business development consultants available to potential new partners. Some may even be willing to help with your business plan, as your success would potentially lead to further business for them.

• Further, they may help you with marketing. They will have access to marketing data, and will be up-to-date on new technologies and marketing practices. You can also likely find quick assistance from business partners regarding layout and design of your marketing materials.
• Establish positive relationships with specific employees at suppliers. This will likely help ensure the supply channels you will rely on once your business is open run smoothly.

See also: 20 Tips to Make Money in Car Automotive Shops

13. Specify your marketing intentions. Marketing plans are some of the most important features of a solid business plan. The options are endless: consider flyers, print ads in local publications, and online advertising. When writing about the services and products you’ll provide, describe them as though whomever is reading them knows nothing about auto body repair. In particular, outline how what you offer will be different from what competitors already offer.

• Reach out to the local auto-restoration community. People who frequently work on classic or antique cars will often work with auto body shops. You can even offer people who are active in these communities discounts, knowing that they may valuable sources of recurring business.

Automobile body shop

14. Contact auto insurance representatives. It may prove to be extremely lucrative to be on insurance companies’ “recommended repair facility” lists. Often, people will ask their insurance companies who to go to for service, particularly when they anticipate their insurance company paying for some or all of the service. By developing good relationships with those companies directly, you’ll bring in additional customers.

• Feel free to be direct. Ask insurance company representatives how you can get on the recommended repair facilities list.