Dr. Paul Borosky, DBA, MBA
Business Plan Writer & Financial Projections
How to Write an Auto Repair Shop Business Plan
Bays Do Not Make Money. Billed Hours Do.
An auto repair shop can have every bay full and still struggle if techs sit waiting on parts or approvals. Business plan writer Dr. Paul Borosky, DBA, MBA, shows you how to plan car count, average repair order, labor rate, and bay use so the numbers hold up for a lender.
Last Updated: 11/09/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Version
What Does an Auto Repair Business Plan Need to Show?
Short Answer
An auto repair plan needs to show car count, average repair order, parts and labor margin, and how many billed hours each tech produces. Lenders want proof that your bays and techs will be busy enough to cover rent, payroll, and equipment payments.
Gross profit = labor sales + parts sales − parts cost − tech pay
Doctor Owl, in Plain English
“A bay with a car in it and nobody working is a parking spot.”
How This Guide Works
Each question covers one section of a shop plan and what a lender checks in it. Ruben the Rhino, a garage owner from the world of Dr. Paul’s Fabled Forest Business School Series, appears in short gold notes. The bay math sits in one marked section.
Opening or Buying an Auto Repair Shop?
Have Dr. Paul write the plan, adapt an industry template, or get help with your shop numbers.
Business Plan Writing
FeaturedA lender-ready shop plan with car count, labor rate, parts margin, and equipment, written by Dr. Paul.
Start your plan →Auto Repair Template
Industry Word plans and Excel models you can adapt to a repair shop.
See the template →Business Consulting
Busy shop, thin profit? Dr. Paul reviews your labor rate, parts pricing, and tech productivity.
See consulting options →Small Business Education
Free guides, videos, and the Fabled Forest books on operations and numbers.
Start learning →From Dr. Paul’s Fabled Forest
Meet Ruben: Charging Ahead Toward a Fourth Bay
On the savanna, Ruben the Rhino runs Ruben’s Four Bay Garage. He is strong, loyal, and fixes anything with wheels. His shop motto: “Push it in, we’ll find it.”
Ruben just added a fourth bay and a fourth tech. He is not sure why the bank account looks the same. Doctor Owl pulls up a stool.
Section 1
How Do You Describe the Shop?
State the services you will offer: general repair, diagnostics, brakes, tires, fleet work, or a specialty like European cars or diesel. Describe the location, number of bays, lifts, and equipment. List licenses, environmental permits for fluids and tires, and insurance including garagekeepers coverage. If you are buying a shop, name its history and customer base.
In the Fabled Forest
Ruben fixes tractors, carts, and once, a hot-air balloon basket. Doctor Owl asks which job he would do every day if he could. “Brakes,” says Ruben, without a pause.
Section 2
Who Are Your Customers and Competitors?
Describe your trade area and the cars in it: older vehicles past warranty, work trucks, local fleets, or a commuter crowd. Map dealers, chains, and independent shops nearby. Explain why drivers will choose you: trust, warranty, convenience, speed, or a specialty. Fleet accounts can steady the schedule, so say if you will pursue them. The target market guide shows how to define the customer.
In the Fabled Forest
Half of Ruben’s customers are the farm co-op’s wagons. Doctor Owl suggests a fleet deal. Ruben had never thought of the co-op as one customer.
Section 3
How Do You Plan Techs and Bay Use?
Show the number of techs, pay plan (hourly or flat rate), and how many billed hours each should produce in a day. Explain how a service writer will keep work moving: estimates, approvals, and parts ordered before the car comes in. Bays only pay when billed hours are high, so show the plan to keep them that way.
In the Fabled Forest
Ruben’s fourth tech spends half the day waiting for parts. Doctor Owl asks who orders them. “Whoever remembers,” says Ruben.
Section 4
How Do You Price Labor and Parts?
Set your labor rate from local rates and your cost per tech hour, not from what the shop down the street charges. Explain parts pricing with a markup that changes by part cost. Describe how you will present estimates, offer warranty, and follow up on recommended work. A steady average repair order beats a busy day of oil changes.
In the Fabled Forest
Ruben charges the same labor rate he did ten years ago. Doctor Owl asks if the lifts got cheaper. Ruben laughs, then stops laughing.
Section 5
How Do You Build the Numbers and the Loan Request?
Build revenue from car count times average repair order, then split labor and parts. Show tech pay, parts cost, rent, a service writer, utilities, insurance, software, and equipment payments. Include startup costs for lifts, diagnostic tools, shop software, inventory, and working capital. For buyers, attach the seller’s financials. The funding request guide explains the ask.
In the Fabled Forest
Doctor Owl adds up the fourth bay. More cars, more pay, same profit. Ruben finally sees it: the bay was never the problem.
The Numbers
What Does a Four-Bay Shop Make per Month?
Example numbers only. Assumptions: 4 bays, 26 days, 1.5 repair orders per bay a day, $420 average repair order, parts at 40% of sales with a 62% cost, 4 techs paid $30 an hour for 8 hours plus 12% payroll costs.
| Line | How it is figured | Monthly |
|---|---|---|
| Repair orders | 4 × 26 × 1.5 | 156 |
| Sales | 156 × $420 | $65,520 |
| Parts cost | $65,520 × 40% × 62% | $16,249 |
| Tech pay | 4 × 26 × 8 × $30 × 1.12 | $27,955 |
| Gross profit | Sales minus parts and techs | $21,316 |
| Fixed costs | Rent, service writer, utilities, insurance, software, other | $18,500 |
| Profit before owner pay | Gross profit minus fixed costs | $2,816 |
Step 1: Tech cost per car. $27,955 ÷ 156 orders = about $179 per car, before parts
Step 2: The problem. Four techs paid for eight hours, but only 1.5 cars per bay a day
Step 3: The fix. At 2 orders per bay a day, sales rise to $87,360 with the same tech pay
Step 4: Your version. Plan billed hours per tech first. Add a bay only when the current ones stay full
Illustrative numbers. Labor rates, parts margins, and wages vary by market.
In the Fabled Forest
Ruben’s fourth bay was full of cars and empty of billed hours. Doctor Owl writes one word on the whiteboard: approvals.
Watch
Watch: How to Write an Auto Repair Shop Business Plan
Dr. Paul covers each part of an auto repair shop plan in this video.
Step by Step
How Do You Write a Shop Plan, Step by Step?
Six steps, from bays to bank.
Define your services.
General, specialty, fleet, or a mix.
Study your trade area.
Cars, competitors, and fleet prospects.
Plan techs and billed hours.
Pay plan and hours per tech per day.
Set labor rate and parts markup.
From your costs, not the shop next door.
Build the numbers.
Car count, repair order, costs, and break-even.
Write the request and summary.
Equipment, working capital, then the summary.
In the Fabled Forest
Doctor Owl’s note to Ruben, taped to the lift: fill the hours before you fill the bays.
Go Deeper
Where Can You Learn to Run a Smoother Shop?
Parts delays, approvals, and idle techs are operations problems. Dr. Paul’s Fabled Forest Business School teaches operations through Doctor Owl and the forest’s owners, with fixes you can try the same week.
Each chapter includes a short story, the idea behind it, and a one-page worksheet.
A Business Consultant’s View
Where Do Auto Repair Plans Go Wrong?
Dr. Paul Borosky, DBA, MBA · Business Plan Writer
In shop plans, Dr. Paul most often sees a labor rate copied from a competitor and a forecast built on bays instead of billed hours. Lenders want tech productivity, a parts margin, and real equipment costs. His method follows Organize-Plan-Grow™: organize the shop’s true cost per tech hour, plan pricing and workflow around it, then grow with another bay or tech only when the numbers say so.
FAQ
What Do Shop Owners Ask About Their Business Plan?
How many cars does an auto repair shop need per day?
Should I pay techs hourly or flat rate?
What equipment costs should I include?
Can I get an SBA loan to buy a repair shop?
Keep Going
What Other Vehicle and Transport Plans Work the Same Way?
Want Dr. Paul to Write Your Auto Repair Shop Plan?
Dr. Paul writes repair shop plans with car count, labor and parts margins, equipment, and three years of projections, ready for SBA lenders.
Written by Dr. Paul Borosky, DBA, MBA, business plan writer.
Education only. Not legal, tax, or financial advice. Figures are examples. Fabled Forest characters are fictional. Check licensing and environmental rules where you operate.