How to Write an Auto Repair Shop or Mobile Mechanic Business Plan
The auto repair shop and mobile mechanic business industry has been growing continuously over the last several years. The growth rate for these businesses may be attributed to several factors.
For example, as we all know, just about every household in the US has one or more cars. Further, our business plan writer, with his Eagle eye, has noted that automobiles, whether it be a car, truck, or motorcycle, are high ticket purchase items and tend to break down. When this happens, vehicle owners have the choice to either fix their vehicles themselves or hire a mechanic. Inevitably, the latter is almost always embraced. Thus a growing need for auto mechanic repair shops and even mobile mechanic businesses as well. Unfortunately, though, competition for repairing vehicles is high and continuously growing. Because of this fact as well, having a well-prepared auto repair shop business plan and or mobile mechanic business plan are excellent strategic actions that may help business owners create competitive advantages in their field of expertise. With this said, our business plan writer has come up with some tips and tricks for the auto repair shop and mobile mechanic business owners to employ when writing their own business plan.
Executive Summary for an Auto Repair Shop or Mobile Mechanic Business Plan.
The executive summary section for an auto repair shop or mobile mechanic business plan should succinctly summarize important aspects of the business. For example, outer repair shop business owners should touch on marketing practices for the company, financial highlights from the financial projection section, and also briefly summarize services offered. In addition, our business plan writer has found that most auto repair shops have a specialty or niche practice. Some repair shops specialize in servicing specific cars such as Mercedes or do well with repairing specific parts of a car like engines. If this is the case for your auto repair shop, then make sure to document your specialty in your auto repair shop business plan's executive summary.
The company information section and location for an auto repair shop business plan and a mobile mechanic business plan may be more or less important depending on your business structure. For example, mobile mechanics often work out of their homes/offices were as mobile repair shops tend to have fixed locations near subdivisions or by large employers. Because of these differing business structures, auto repair companies should document their physical locations in detail, whereas mobile units should focus more on their travel area service. By understanding and embracing the small nuances, business owners, whether they be for an auto repair shop or mobile mechanic service, are able to better convey the benefits of their various business structures.
Service Description and Competitive Advantages
For the most part, regardless if a mechanic is starting or expanding their auto repair shop or mobile mechanic business, having a core set of services in describing them in a business plan is a critical step in the business plan writing process. From this, when writing a business plan for these businesses, first start with identifying, in a bulleted point list, each popular service provided by the mechanics, but leave the list to maybe five or six services. Expanding past five or six services in the service description section will make the segment disproportionately longest compared to other segments of the business plan. For additional services past five or six, make sure to put those services in an appendix. Also, make sure to note at the bottom of the service description section that additional services are in the appendix. By following this practice, automobile repair shop owners are able to convey their important services offered while still showing the breadth of services in the plan.
The target market for an auto repair shop and mobile mechanic business inherently are different, based on experience from our business plan writer. For example, auto repair shop business owners tend to service vehicles for preventative maintenance and scheduled repair services. In contrast, mobile mechanics often work with emergency services, such as roadside assistance or home/office-based repairs. By understanding customers and their inherent needs, business owners can then accurately classify target markets in the business plan. Further, with target markets identified, business owners can then fashion various business models to best appeal to their respective target markets.
Industry research for an Auto Repair Shop or Mobile Mechanic Business Plan
The industry research section for an auto repair shop or mobile mechanic business plan should start with evaluating national trends in the industry. For example, both business structures fall within the auto mechanics in the US industry. Because of this commonality, common statistics in the industry are applicable to both business structures. A quick Internet research may provide important statistics to base your industry research segments of the business plan. For example, IBI has found that auto mechanics in the US industry has achieved $65.3 billion in revenues over the last 12 months. Further, revenue growth for the industry in the last five years has declined by approximately .5% annually. Fortunately, though, industry experts anticipate a 1% annual growth rate for the future. This may lead to profit margins of approximately 8% for industry competitors. From this foundation, auto repair shop and mobile mechanic business owners can then deviate from the general industry research to more business-specific statistics that align better with their business models.
The owner and management section for both, and auto repair shops or mobile mechanic businesses, should be similar in structure and quantity of information. Regardless of business type, business owners, when writing the owner and management section of the business plan, should first focus on work experience related to automobiles. A great way to discuss work experience is by including a well-written resume showing previous employers and services performed for these employers. From this foundation, auto repair shop and mobile mechanic business owners can then tie in their educational or vocational activities, like mechanic certifications or management degrees, to better support their experiences and future aspirations.
Funding Request for an Auto Repair Shop or Mobile Mechanic Business Plan
When starting or expanding an auto repair shop or mobile mechanic business, the funding request section is a critical component of the business plan. As most people know, starting this type of business is capital-intensive due to the need for specialized equipment like engine lifts, diagnostic equipment, and for mobile mechanics, the vehicle to transport the specialized items. Further, handtools galore are required as well. Instead of making a laundry list of equipment and tools needed for the funding request section, a better strategy is to categorize equipment into subcategories. For example, an auto repair shop business owner may identify heavy equipment, various lifts, hand tools, etc., as categories related to funding. With each one of these categories, business owners can then assign specific dollar amounts to serve as budgetary restraints for the areas. By following the structure, business owners are able to convey to the reader where funding will be going well still maintaining flexibility for pricing purposes.
The financials and financial projection segments for the auto repair shop and mobile mechanic business plan should be constructed in a similar manner. For some businesses, they prefer to make the business model focused on average prices for popular services performed. However, our business plan writer has found that for this industry, a better strategy is to determine the average dollar amount spent by each customer. From this, business owners are then able to estimate average markups, which would be the starting point for calculating variable cost averages. By following the structure, business owners are able to then focus efforts on attaining specific numbers of customers on a daily basis. By reaching these numbers, they inevitably know with her estimated profits and cost will be. Further, business owners are able to better explain this structure as compared to other more complicated financial model constructs.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author