How To Start a Collision Repair Shop

How To Start a Collision Repair Shop

If you’re a mechanic or a car enthusiast or would just like to own a collision repair shop, you are not alone. Being your own boss is a dream that many people have, especially in the automotive industry. A good percentage of people save up from an office job to start a shop in the future. There’s no problem with that, you just need to educate yourself and plan ahead. To hit the ground running you need to follow a specific sequence of steps to get yourself set up right. Luckily for you, you can find these steps below.

How To Start a Collision Repair Shop

Collision repair shops will always have a place in the market. As long as the roads carry cars, you will have a business to operate. Starting a business isn’t as easy as some may think, but at the same time, it’s very doable with the right strategy. On top of the needed financial obligation, the legislature requires certain things of you too, not to mention preparing to be tax compliant.

Steps on How To Start a Collision Repair Shop

  • Prepare a business plan

When starting an enterprise, a business plan helps you keep your true north. A business plan is a document that lays out the shop’s goals or aspirations and goes into detail about how the shop plans to get there. Details incorporated in the business plan include which services the shop will offer, costs of operation, and expected turnover, among other details. The document is meant for both internal and external audiences. For example, a clear business plan is a good utility when looking for funding.

  • Secure resources

As mentioned above, some people save for years to fund a business several decades down the line. However, not everyone starts a shop with saved-up finances. Even people with saved-up money still often need additional financing to give them a cushion before things pick up. If you have a good line of credit, you may apply for a loan from a commercial lender. It’s not only banks that extend loans, there are also plenty of microfinance solution providers that can help.

  • Establish a location to set up the shop

Location is one of the most important factors contributing to the success of a shop. No matter how good your staff may be, you’re dead in the water if people cannot find your location.

  • Register the shop as a business

The complexity associated with this process largely depends on which state you plan on opening the shop in. Registering a business across states differs, thus meaning some steps may be different from location to location. The best thing at this point is to familiarize yourself with what your state requires of you.

  • Acquire the needed insurance policy

Various insurance options exist for business owners to protect their businesses. Insurance covers your shop against various risks that occur during normal shop operations. Most first-time business owners begin with only the necessary packages. A Business Owner’s Policy is one such policy. It combines three important coverage:

  1. Business income insurance
  2. General liability insurance
  3. Commercial property insurance
  • Acquire software to help business operations

The logistical requirements of any business often are overwhelming, especially for new business owners. The size of your operation determines the amount and caliber of software you need. For example, for a shop with a few employees, accounting software is not necessary. But with an operation employing 70 to 100 people, this software becomes vital.

  • Purchase enough equipment

Collision repair shops need a lot of investment in terms of equipment. It is one of those enterprises that heavily rely on the tools of the trade. Note that this usually needs a lot of resources and adequate planning is necessary. Depending on how you raised funds, equipment may have been budgeted for. If not, you should secure more funding. Not only do you need tools, but towing apparatus plays a significant role too.

  • Acquire qualified human resources

For new business owners, one must be very careful with their hiring process. Usually, the people you hire have more experience in the field than you do. Thus, putting them in a leveraged position to take advantage of you. The best course of action would be to take a very hands-on approach and learn the ins and outs of running the shop. After a while, as you need to expand, you then hire and be a better boss because you know the business from the ground up.

  • Build good relationships

Among the pillars of any successful business is excellent customer care. Not only does this keep customers coming back, but you never know who you are serving, and you may make unexpected wins for the shop. On top of the customer side, you need to build strong relationships with your suppliers and financial institutions. Many a business stay afloat even in hard times due to good relationships with suppliers and lending institutions.

  • Marketing The Business Locally

People cannot buy from a shop they do not know, and it is your responsibility to get your brand out there. From social media to ads and building and ranking a website, you have a couple of avenues to build a good customer base. Social media also allows you to engage with your customers and build a strong bond with them, thus increasing their lifetime value. SEO services specifically for automotive companies are another great way to reach new clientele and get your name out there.


To start a successful shop or any business, proper planning and knowledge are essential to success. From legalities to funding to staffing, a business owner has many responsibilities to take care of. This often leads to confusion and inefficiency. The only way to combat this is by following a set-out blueprint for yourself. Thus, the steps above need to be followed to get you started on the right foot when learning how to start a collision repair shop.

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