How to Write an Auto Repair Shop Business Plan

How to Write an Auto Repair Shop or Mobile Mechanic Business Plan or Template

The auto repair shop and mobile mechanic business industry has grown continuously over the last several years, elevating the need and demand for auto mechanic business plans, business plan templates, and pro forma financial projections.

The auto repair industry provides essential services such as vehicle diagnostics, maintenance, and repairs for individual and fleet vehicles. In 2023, the U.S. auto repair market was valued at $88 billion and is projected to grow at a compound annual growth rate (CAGR) of 4.3% through 2030, driven by the increasing number of vehicles on the road and the complexity of modern automotive systems. With growing demand for specialized services like electric vehicle (EV) maintenance, the industry offers substantial opportunities for new and existing businesses.

Dr. Paul Borosky, MBA Business Consultant
Dr. Paul Borosky, MBA Business Consultant

Recently, in Denver, Colorado, a small auto repair shop, Precision Auto Care, closed in 2022 due to operational inefficiencies and declining customer retention. Despite having skilled mechanics and modern diagnostic tools, the business struggled with inadequate marketing, an unclear pricing strategy, and financial mismanagement, ultimately leading to its closure.

A well-written auto repair business plan could have significantly improved Precision Auto Care’s success. The plan would have included financial projections to manage costs, marketing strategies to attract repeat customers, and operational plans to streamline service delivery. Initiatives like offering loyalty programs, leveraging social media for promotions, and partnering with local businesses could have enhanced profitability and long-term growth.

Here are some tips and tricks by Dr. Paul Borosky, MBA, business plan writer, and business consultant, for writing an effective auto repair business plan…

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Executive Summary for an Auto Repair Shop or Mobile Mechanic Business Plan.

The executive summary of an auto repair or auto mechanic business plan should commence similarly to conventional business plans.  This involves mentioning the firm's name, address, and typical client services.  Our business plan writer also suggests highlighting one or two unique characteristics that set the repair shop apart.  As an illustration, some auto repair business plans might detail the establishment's mobile services and its usual garage-based operations.  By spotlighting one or two unique features, the business plan writer can swiftly present the reader with novel offerings while demonstrating a firm grasp of standard automotive care services.

Company Information and Location.

Within the company information and location segment, our business plan writer advises detailing not just the interior ambiance of the repair facility but also its closeness to the intended clientele.  For instance, if the auto mechanic establishment primarily mends semi trucks for fleet managers, its position should ideally be near significant roads or holding areas for these large vehicles.  Demonstrating this correlation between the shop's location and its primary customers, entrepreneurs can underscore the strategic significance of their site relative to their desired audience.

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Service Description and Competitive Advantages

When a mechanic decides to start or grow their auto repair shop or mobile mechanic venture, it is essential to outline a primary set of services in a business plan.  Crafting a business plan for such businesses begins by creating a bulleted list that highlights each primary service the mechanics offer.  It is wise to limit this list to about five or six services.  Extending beyond this number in the service description can make this section too lengthy compared to other parts of the plan.  If there are more than six services, include those additional services in an appendix.  After the service description, indicate that supplementary services can be found in the appendix.  This approach enables car repair shop proprietors to highlight their pivotal services while demonstrating their offerings.

Moreover, when organizing your bullet points, it's best to order the services based on expected revenue or popularity.  If your business has a specialty, like domestic engine repair, position that service at the forefront of the list.  This format reinforces your primary services and the core expertise mentioned in the business plan.

Target Market for an Auto Repair Shop or Mobile Mechanic Business Plan Template

Based on our business plan writer's experience, the target audiences for an auto repair shop and mobile mechanic service often differ. Auto repair shops typically cater to routine maintenance and scheduled repairs. In contrast, mobile mechanics often handle emergencies like roadside breakdowns or repairs at homes or offices. Recognizing these distinct client needs allows businesses to correctly define target markets in their plans. With these markets defined, they can mold their business strategies to attract the best and serve these specific audiences.

Industry Research for an Auto Repair Shop or Mobile Mechanic Business Plan

Examining national trends, begin the industry research section for an auto repair or mobile mechanic business.  Both types of businesses fit within the US auto mechanic industry.  Given this overlap, general industry statistics are relevant to both.  A brief online search can yield vital statistics to inform your business plan.  For instance, IBI has reported that the US auto mechanic industry garnered $65.3 billion in the past year.  Revenue growth has declined by about .5% annually over the last five years.  However, projections indicate a 1% growth rate in the coming years, potentially leading to an 8% profit margin for players in the sector.  With this base knowledge, business owners can focus on specific data that better aligns with their business models.

Owner and Management Section

The owner and management section for both auto repair shops and mobile mechanic businesses should be consistent in layout and depth of detail.  Regardless of the business type, when drafting this segment, emphasize any work experience tied to automobiles.  Incorporating a detailed resume that showcases past employers and tasks undertaken can be beneficial.  From there, business proprietors can link their educational or vocational achievements, like mechanic certifications or academic degrees, to further validate their background and future goals.

Funding Request for an Auto Repair Shop or Mobile Mechanic Business Plan

Initiating or growing an auto repair shop or mobile mechanic business necessitates a well-structured funding request section in the business plan.  Many are aware that establishing such a business demands significant capital due to the requirement for specialized apparatus like engine hoists, diagnostic machinery, and, for mobile mechanics, vehicles equipped to transport these specialized tools.  Additionally, a vast assortment of hand tools is essential.  Rather than enumerating every tool and piece of equipment in the funding request section, it is more efficient to group them into subcategories.  For instance, an auto repair shop owner might delineate categories such as heavy machinery, different lifts, hand tools, etc.  Each category can then have specific monetary values attached to them, serving as budgetary guidelines.  This organized approach allows business proprietors to communicate to potential investors or lenders how the funds will be utilized while retaining some leeway for pricing adjustments.

Financials and Financial Projections for an Auto Repair Shop or Mobile Mechanic Business Plan

The sections on financials and projections for an auto repair or mobile mechanic business should adopt a standardized structure.  Some enterprises might base their financial model on the average fees for commonly rendered services.  However, our business plan writer suggests that a more practical approach for this sector is to pinpoint the average expenditure by each customer.  Once this average is determined, business proprietors can deduce typical markups, laying the groundwork for estimating average variable costs.  This method enables business owners to concentrate on attracting a specific number of clients daily.  They can confidently predict their expected profits and expenses upon achieving these target figures.  This streamlined financial model is also simpler to communicate and understand than more intricate financial frameworks.

Hopefully, these insightful tips and tricks for writing a business plan were helpful.  Email or call us if you need help with a business plan or financial projections. 

Author: Dr. Paul Borosky, MBA., Author

Owner of: Quality Business Plan and Quality Business Consultant.

Date: 1/6/2025