What’s the Best Way for Auto Repair Shops to Make Money?

What's the Best Way for Auto Repair Shops to Make Money?

A well-run auto repair shop that has established itself in the market and which operates under a trusted brand name can reasonably expect to make over $800,000 in gross sales a year, maybe even rising to a million. In fact, the top performing auto repair shops can generate over two million dollars in gross sales in a single year! That is, quite clearly, a lot of money. But just how do auto repair shops make all that money?

Auto Repair Shop Businesses

Auto repair shop businesses make money by taking in customers’ vehicles, testing them, replacing the parts that don’t work, and sending the customers on their merry way. Thus concludes how auto repair shop businesses make money. If you have any more questions about– what’s that? Oh, you do have more questions? You want more details? Oh, OK then.

Auto Repair Shop Business Plans

In all seriousness, we presume that the readers of this blog do indeed know, generally, what auto repair shop businesses do and how they make their money. But how do you really make money with an auto repair shop business? What separates the auto repair shops who hit those figures of $900,000, $1.5 million, and even $2 million in gross sales from the ones who are languishing under half a million in gross sales (or lower)? To find out how to make the most out of your auto repair shop, you really have to examine your business plan.

First, you have to know that your gross sales depend a lot on location. If you operate in a small community, you won’t make as much in sales, but your costs will also be lower, so that’s not necessarily a bad thing. If, however, you are in a bad location within your area, such as a place that’s hard to find or in a rarely-frequented part of town, then you’re in trouble. That is why, before you open up your auto repair shop, you have to choose your location wisely. Your franchisor should be able to help you out with this and give you some advice or recommendations of where to set up shop.

Second comes devising your auto repair shop business plan. Again, buying an auto repair franchise gives you a leg up here because your franchisor can help you. If you buy an auto repair shop from an established and successful business, they will be able to hand you a template of what has worked for all their other franchises and teach you how to implement said template. They can also tell you what not to do.

Revenues And Expenditures

Auto repair shop business plans should emphasize the importance of customer service. Good customer service means good word of mouth and increased likelihood of repeat business. People need to bring their vehicles in for service repeatedly, so if you wow a customer the first time you could have their business for life. Your biggest recurring expenditure will be what you spend on replacement parts and equipment. Top notch auto repair shop franchisors can offer their franchisees preferred vendor programs that allow them to buy top quality parts at reduced prices.

Tuffy Tire & Auto Service

To learn more about auto repair shop business plans, please contact us.