How to write an effective auto repair shop business plan (2023)

Key takeaways

  • An auto repair shop business plan will provide a blueprint for the launch of your business and increase your chances of success
  • Investors and lenders use business plans to determine whether your auto shop can reach profitability
  • There are seven main sections of an auto shop business plan that can help clarify the vision of your business

Want to start your own auto repair shop but don’t know where to start? Before jumping ahead and launching your new business on a whim, consider investing the extra time and effort in writing an auto repair shop business plan.

A business plan not only provides a roadmap to grow your business, but it actually increases the chances that your endeavor will succeed. Business owners who write a business plan generally grow 30% faster than businesses that don’t.

Roll up your sleeves and use this guide as your very own auto repair shop business plan template.

7 core sections of an auto repair shop business plan

How to write an effective auto repair shop business plan (1)

One of the main reasons for coming up with a business plan is to show readers—especially lenders and investors—that your business model is financially sound and can be profitable. It’s also a guide that helps you organize your thoughts, set goals, and clarify your vision. Essentially, it’s your business blueprint.

Beyond that, you can use a business plan to get feedback on your idea and determine whether it’s worth pursuing. Third parties, like other auto shop owners or financial advisors, can also read through your business plan and give you any suggestions or advice.

An auto repair shop business plan should include the following sections:

  1. Executive summary
  2. Business description
  3. Market analysis
  4. Services or product line
  5. Operations and management
  6. Marketing and sales
  7. Financial factors

Each section serves a specific purpose and will help you plan your car repair business from every angle.

1. Executive summary

The executive summary kicks off your auto repair shop business plan and provides an overview of what’s to come. It should be clear, concise, and engaging enough to encourage people to read the rest of your business plan.

While this section is a culmination of all your research, keep it brief and to the point. Your executive summary should include the following:

  • Mission statement
  • Description of your business
  • The leadership team and number of employees
  • Auto repair services you offer
  • Where you’re doing business
  • Why you’ll succeed

Even though the executive summary is the first section of your business plan, it’s best to write it after you’ve completed all the other sections. This way, you have a thorough understanding of all aspects of your plan before you summarize it.

2. Business description

The business description is an overview of what your business actually does. It should cover:

  • What makes your company unique
  • Your competitive advantages
  • The customers you plan to serve

Describe the strengths of your business model and any competitive advantages your auto shop has. Do your mechanics have many years of experience and training that other local shops may not have? Were you able to secure prime real estate in a high-traffic area that can bring in more business?

You should also explain your target market and which customers will find value in your automotive services. For example, some auto shops may focus solely on everyday customers who want to service their personal vehicles. Other auto shops may aim to service commercial fleet vehicles for other businesses like electricians or landscaping companies.

3. Market analysis

It’s imperative to understand the state of the auto repair industry before you decide to launch your own small business. This section of the business plan provides proof to readers that there’s a healthy demand for your business to be successful.

First, determine if such a demand exists for a new automotive repair business in your area. You can come up with a general market analysis by tracking how many auto businesses are operating in your region and if they have an influx of customers.

The market analysis section should also include a competitive analysis. Find out what your competitors are doing right and opportunities for improvement. Scanning through Yelp reviews is an easy way to gauge the strengths and weaknesses of other car repair shops in your area. You can mimic tactics that are successful and capitalize on their areas of weakness.

Browse through our guide on how to do market research for helpful ideas on conducting market research for your business plan without having to spend a fortune.

4. Services or product line

Readers need to know how your business will make money. This section of your business plan is where you highlight the specific services and products that will help you reach profitability.

For example, maybe you want to offer general auto services, or perhaps you decide to specialize in certain areas—like transmission or engine repair, oil changes, or auto body repair. Be specific if you plan on serving a niche that sets you apart from competitors.

You can also include a list of different auto parts or products that you expect will generate revenue. For example, you can include price estimates of specific products, such as vehicle headlights, engine oil, or oil filters.

5. Operations and management

The operations and management section discusses what type of business structure you will form and who will be running your company.

Start by explaining the legal business entity you will be creating. You’ll have the option of forming a sole proprietorship, partnership, limited liability company (LLC), or corporation. You can find more details in our guide to registering your business.

You can then lay out an organizational chart or company summary that shows the hierarchy of leadership in your car repair business. You’ll also want to highlight the years of experience each employee has and what specialties they bring to provide high-quality work and help your company succeed. If you’re the only employee, provide a professional overview of yourself and why you’re qualified to make your auto shop a success.

6. Marketing and sales

Readers will be interested in your auto repair marketing plan and how you expect to find new customers—specifically, which traditional and digital marketing channels you’ll use to draw up business.

When you start an auto mechanic shop, you need to advertise your business to not only attract new customers, but to also retain them and turn them into repeat buyers.

A professional-looking website will be a main area of focus. It will serve as the online face of your company and hub for incoming traffic from other digital marketing efforts, such as:

  • Email marketing
  • Referral program
  • Pay-per-click digital advertising
  • Social media marketing
  • Claiming your Yelp Business Page
  • Search engine optimization (SEO)
  • Content marketing

You can also use more traditional marketing ideas to advertise and grow your auto shop like business cards, referral incentives, or loyalty programs. In this part of your business plan, explain how you will use each of these different marketing channels to earn your first customers and get your business off the ground. For more ideas, see our guide on affordable auto repair marketing ideas.

How to write an effective auto repair shop business plan (2)

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7. Financial factors

Those reading your auto repair shop business plan—especially lenders and investors—will need to know if your new business is financially viable. This section will include a financial plan and tangible evidence that your business is capable of succeeding.

Businesses that are already up and running can provide income statements, balance sheets, or cash flow statements. For those that haven’t launched yet, you can produce financial projections based on your startup costs and pricing—including equipment, tools, property rental, and monthly utilities. Once you have a detailed overview of your startup costs, you can set the pricing for your small business services.

This is also where you would include a funding request if you need one from an investor or lender. Explain the amount of funds you’re seeking and how you’ll allocate any investment dollars. On top of that, give an estimate of when you will reach profitability based on your financial projections.

Drive your auto repair business to success

You should aim to be as thorough as possible when writing your own business plan. If you put in the hard work upfront, your business will be better off in the long run.

Start going through each section of your plan and provide as much research and data to support your findings. Also, remember that it makes more sense to write your executive summary after completing all other sections.

Lastly, put yourself in an investor or lender’s shoes. What would you be looking for if you were thinking about investing in a small auto repair business? Make sure you can answer these six questions when starting your own business and you’ll be off to a great start.

The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.

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Author: Merrill Bechtelar CPA

Last Updated: 21/08/2023

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