Buying An Auto Repair Shop ##BEST##
For the mechanically inclined, owning an independent auto repair business offers a recession-proof income where strong customer service and hard work can create long-standing customer relationships and excellent repeat business.
buying an auto repair shop
These questions can in turn give rise to more questions that need answers if you are to get a well-rounded and accurate view of how well a particular repair shop matches your needs and justifies the asking price.
Before you commit to buying an auto repair shop, consider your lifestyle goals, personal interests, as well as your financial expectations. This will determine if buying is the right decision for you, which shop to buy in terms of size and income potential, or if you should own an auto repair business at all.
Set up systems and processes to improve employee productivity, build customer trust, and boost your profit margins. Invest in auto repair shop management software like AutoLeap to schedule customer appointments, track mechanic performance, improve your online brand presence, and more to keep the business running smoothly.
Are you looking to open your first auto repair shop, add to your growing portfolio, or just want to buy an existing auto repair shop? No matter your motivations, a thorough business evaluation is the way to go to avoid buying a dud.
With the right approach to evaluating the business, you can ensure the auto shop will work for your needs. Beyond that, your efforts will help you zero in on the perfect price point for the acquisition.
Word-of-mouth referrals are powerful, for sure. But to be truly successful, auto repair shops must have a strategic marketing program in place. So, check out their marketing approach by asking about their website, social media presence, and ads.
Point of sale systems has improved by leaps and bounds in the past few decades. Despite that, many auto repair shops continue to live in the past by using paper estimates, work orders, and receipts.
High-performance employees add value to the auto repair shop. But if the shop owner or their spouse is doing the bulk of the work, you may end up with big shoes to fill in the end. You can prepare for that by asking how much work the owners take on daily.
This includes everything from answering phones to managing employees and hiring and training new staff members to deal with a customer. If you want to purchase an auto repair shop, it will probably take at least six months before it can sustain itself economically.
The main concern here to reach gen z people is social media and google maps. Ask people to rate you then, and after that, complete their service. Also, put banners and proper posters nearby the area to show them the right direction towards your auto shop.
Unlike businesses which rise and fall when fashion or technology changes, car repair continues to offer stability and opportunity for the business buyer. If you are looking for a business to buy, here are 7 good reasons to buy an auto repair shop.
While operating an auto shop requires a certain amount of equipment and tools, owners do not have to worry about having their cash tied up in accounts receivable and extensive inventory. Auto repair shops operate on a pay-at-the-time-of-service basis and very few stock large inventories of parts. In most areas, parts can be obtained quickly from parts stores as the need arises.
There are several trends which show that the outlook for independent auto repair shops is excellent. For one thing, the number of cars on the road continues to grow. It is estimated that there are over 247,000,000 vehicles registered in the United States and that number increases annually. With just a few exceptions, the number of cars has increased over 3.5 million each year since 1960, and there is nothing to indicate that this trend will change.
During the recent recession the average number of miles driven by Americans has been stagnant. Families struggling with unemployment or underemployment issues are less likely to drive on vacations or non-essential trips, but as the economy improves industry forecasters are predicting a steady increase in the number of miles driven. In fact, the US Energy Information Administration (EIA) is predicting that the number of car miles driven annually in the US will increase from 2.6 trillion in 2011 to 3.6 trillion in 2035; an annual growth rate of 1.2 percent. These facts all point to a sustained demand for independent auto repair businesses.
Unlike many brick and mortar businesses, auto repair shops have not been replaced by internet businesses. This industry also faces little consolidation. While major auto dealers offer repairs, their market share has been shrinking. One reason for this is that auto dealers charge significantly more for auto repair work than do small car repair shops, and a Consumer Report survey found that customers who go to independent auto repair shops report a higher satisfaction level than those who visit an auto dealer for repairs. The independent market is highly fragmented and the typical auto repair shop may have just two to five employees.
Another reason to buy an auto repair business is that the owner still has time for a personal and family life. Most car repair shops operate during business hours Monday through Friday and are only open until noon on Saturday.
Thinking about buying an auto repair shop? There are a few things you need to understand, considering that it could be a significant investment. So opening a new repair shop without getting to know about the automotive industry would be a massive oversight on your part.
More than 235,000 cars were sold in the UAE in 2019 alone. As every car and truck requires constant maintenance to ensure performance and quality over time (I mean you are not going to drive your car around without ever going to a garage, unless you have a Toyota pick-up truck or a Subaru), which means more business for your mechanic shop. But jumping into any business, including buying an auto repair shop without the proper knowledge, could prove to be quite detrimental. So here are a few factors you might want to consider beforehand:
While starting a business, there are two choices. You can either think of starting your own business from scratch (might cost you a bit) or buying a mechanic shop franchise (not enough control over it). Owning an auto repair shop provides you with the liberty to work freely on your own terms. But it might not always guarantee you the success you dreamt of, before owning it. But buying a franchise would provide you with a well-built establishment along with the experience you require to run a successful business.You might need to pay a few priorly stipulated charges (always read the documents carefully before signing), but it would provide you with a better chance at a profit.
Starting your own business, whatever it is, takes quite a lot of working capital. If you decide to go with buying an auto repair shop franchise, you might need to consider the fact that there are going to be a few prior stipulated charges involved in it. So the best thing for you would be to read every single document very carefully before signing. It would help you understand how much you are paying and how it is going to help your business.You are going to buy a lot of parts and equipment. So it would be best if you partner up with a franchise that can provide you with a vendor scheme for buying them at a discounted price. Additionally, you need to pay the salaries and benefits (including bonuses and health insurance), the rent for the building (if not bought), etc. The employee salaries are around a fourth of the total expenditure of your shop.
Oh yes, the most important question of them all, where you are going to get the required working capital. With the kind of expenditure you might encounter while and after buying an auto repair shop, you will need a lot of working capital. You might have a way of starting the business. But to keep the cash flow open, we suggest you make your customers loyal (a lot of them) to your business with the help of your service, facilities, and the building blocks, i.e. the employees.
You need the latest equipment required for owning an auto repair shop, along with a good infrastructure. Ensure that you purchase the equipment that is sure to produce a profitable revenue.
Big companies acquired more than 500 local shops throughout the nation last year, a consolidation led by Detroit-based Icahn Automotive Group LLC, owner of the Pep Boys maintenance shop brand, reports the trade journal Tire Business. At the same time, established repair chains expanded.
Over two decades, 13 percent of the nation's auto dealerships have closed, leaving many motorists far away from the dealer's mechanics. If work must be done, drivers tend to rely on locally owned repair shops, especially drivers of domestic brands made by Chrysler, Ford and General Motors, Lang said.
Because local shops still account for about 65 percent of the maintenance and repair business, many investors are expanding by buying the shops. Icahn Automotive, for example, acquired more than 225 shops last year, including Mathis Tire & Auto Service, a Memphis chain with 12 stores, and W.S. Haynes, a two-store Memphis business.
Seeing the rise of the well-financed shops, Fort Lauderdale, Florida-based AutoNation Inc., the nation's largest automotive retailer, set up the Approved AutoRepair designation for its garages in a partnership with AAA, an insurer and car care organization based in Heathrow, Florida. The retailer earlier this year said 220 facilities are under the program.
The demise of the smaller shops, said Lang, whose research is relied on by the Auto Care Association, traces in part to the increasing use of electronic systems in vehicles. While systems such as fuel control modules add to vehicle reliability, they require expensive repair tools and diagnostic equipment often beyond the means of family businesses. 041b061a72