Starting an Automotive Business: 6 Things You Need to Know - Tread Connection Starting an Automotive Business: 6 Things You Need to Know (2023)

There is a lot to consider when it comes to starting your own business. This is especially true when starting an automotive business. Embarking on your journey to entrepreneurship is an exciting time. It can also be a stressful one if you’re unprepared.

If you want to start a business in an uncertain economic climate, then an auto shop is a great place to look. Automotive repair and tire retail businesses are both thought of as recession-resistant. Even in the worst economic conditions, people still need their cars.

Pretty much everyone needs reliable transportation to commute to work, run errands, and go about their lives. Because cars are so essential to the daily lives of Americans, auto repair services historically perform well even during an economic downturn. As of 2018 there were an estimated 230,600 auto repair and maintenance shops in the United States. And the industry is expected to continue growing.

There’s never been a better time to get in on the auto industry. Of course, as with any new business, prior preparation is the key to future success. Here is what you need to know about starting an automotive business and how you can set your auto shop up for success.

The first step to starting an automotive business is to lay out a clear vision for what your business does. You should know exactly what sort of auto shop you’re opening and your available services. There are all kinds of different auto shops, and each one is a little different.

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It’s not uncommon for many auto shops to specialize in specific types of repair. Depending on the kind of shop you open, the necessary equipment can also change. Some of the specialty auto shops you’ll come across include the following.

Body Shops

Body shops provide auto body repair specific to your car’s exterior. These services may include fixing dents and scratches or replacing damaged body panels after a collision. A traditional auto mechanic is going to make sure everything looks great under the hood, but they might not be able to help with a new bumper.

Transmission Shops

Like the name suggests, a transmission shop focuses solely on your vehicle’s transmission. This includes transmission service, maintenance, and repair. The transmission is an indispensable and complex part of your vehicle. Because of this, there are transmission problems that a mechanic who is not a specialist may not be prepared to fix.

Tire Repair and Tire Retail Shops

Everybody eventually needs new tires. This makes tire repair and retail stores particularly popular with people starting automotive businesses. A steady stream of customers and a product that is always in demand are both great reasons to specialize in tire services.

These are only a few of the many types of auto shops available. There are many others, including those that focus on inspections or shops that specialize in auto glass repair or brake services. Take the time to research the different options and determine the kind of business you want to open.

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2. Put Together a Business Plan

Starting an Automotive Business: 6 Things You Need to Know - Tread Connection Starting an Automotive Business: 6 Things You Need to Know (1)

The next step in opening your auto shop is to have a business plan in place. Your business plan is the roadmap for the success of your business. Your business plan should clearly define the following so that anyone who reads it clearly understands the fundamentals of your company.

  • What is your business?
  • What does your business do?
  • Who are your competitors?
  • Who are your customers?
  • How does your business operate?
  • How do your finances work?

Building a business plan isn’t a step to take lightly. Many entrepreneurs work with a consultant to ensure their business plan covers all the bases. Once your plan is in place, you should be ready to take the next step in starting your business.

3. Decide on a Location

Now that you know what kind of business you’re starting and you have a plan, it’s time to decide where that business is going to go. Finding the right location is a fundamental element of any successful auto repair shop, it can also be one of the most expensive.

It takes time and money to find the right location, and it costs even more to maintain it. Brick and mortar locations are costly endeavors where you must pay rent, utilities, and more in addition to other overhead expenses.

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As more customers want to avoid waiting rooms and the inconvenience of visiting a garage, savvy entrepreneurs are taking the tire shop directly to the customer. Tread Connection’s mobile tire service vans have a much lower overhead than traditional brick-and-mortar locations. With a wide range of customers including both retail and corporate clients, a mobile tire service is a convenient and cost-effective option for starting your automotive business.

4. Secure Financing for Your Business

You know what your business should look like. You’ve put together a comprehensive business plan. You’ve scouted potential locations. But how are you going to pay for it all? Unless you’re prepared to finance your business yourself, there’s a good chance you’ll need to be approved for a loan.

This is where that business plan comes in handy. You’ll need to present your plan to potential investors, including banks, to secure a loan to cover the cost of equipment, the location, payroll, insurance, and other expenses. Many entrepreneurs seek out Small Business Administration (SBA) loans to help get their dreams of business ownership off the ground.

5. Hire the Right Employees

Starting an Automotive Business: 6 Things You Need to Know - Tread Connection Starting an Automotive Business: 6 Things You Need to Know (2)

Running a business is rarely a one-person show. This is especially true when it comes to an auto shop. Your business can only be as good as its people. That’s why finding and hiring the right employees is one of the most important things you can do when starting an automotive business.

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Reputation is everything when it comes to the success of an auto shop. Your employees and the work they do is a representation of you as both a company and a business owner.

When customers like your employees and trust them to do good work, they’re going to come back, and they’re going to tell their friends. The same can be said for a negative experience. Make sure you thoroughly vet your employees and hire the right people to represent your business.

6. Start Marketing and Attracting Customers

Once everything in place, you’re ready to get down to business. It’s time to start marketing and bringing in customers. You’ll need a website where customers can find your business online and schedule their auto services. You’ll also need to take out advertising online and in print so that your message is being seen by the right people. After the customers start rolling in, it’s time to get down to business!

7. Skip the Steps and Start an Automotive Franchise with Tread Connection

Clearly, there’s a lot that goes into starting a successful automotive business. Between the time, money, and effort it takes to get the doors open, it’s a serious undertaking that requires a lot of work. One thing you may not have considered is purchasing an automotive franchise.

By purchasing an automotive franchise, you’re buying into a proven and established business model that will have already done much of this work for you. An auto franchise has already established the type of shop and put together a thorough business plan that details everything from how much to charge for services to where to source your parts.

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Don’t wait to take advantage of this recession-resistant industry. Learn how you can start your mobile tire retail and repair franchise with Tread Connection today!



What are the steps to starting a car business? ›

How to Start a Car-Building Company
  1. Choose Your Niche. First, decide what types of vehicles you want to build. ...
  2. Make a Business Plan. Launching a car-building business takes a lot of time and money. ...
  3. Comply With the Law. ...
  4. Grow Your Car-Building Company.

What are the 3 skills you should be able to do as an auto mechanic? ›

Auto mechanics must develop skills in areas like problem-solving, communication, and attention to detail. Mechanics don't need a postsecondary degree, but many complete non-degree training programs at a technical school. Auto mechanics need dexterity to complete their jobs.

What is the most important thing in automotive industry? ›

Electrification. Electric vehicles are one of the most critical trends in the automotive industry, and it is estimated that they will account for more than a third of all new car sales by 2030.

What is the best car business to start? ›

Some of the most profitable car business ideas are:
  • Auto Interior Shop.
  • Lubrication Oil Retail Shop.
  • Car Wash Business.
  • Vehicle Licensing Brokerage Service.
  • Rental and Ride-Sharing Cars.
  • Car Accessories Store.
  • Automobile Repair Service.
  • Driving School.
Dec 17, 2021

How much does it cost to start an automotive company? ›

In the case of a startup car manufacturing company, you need at least $10 million for your startup phase to go smoothly. Research and development can last 2- four years.

What are the 3 C's in automotive? ›

When it comes to finding a reliable auto repair shop, what matters most? According to a recent AAA survey, people said they look for the 3 C's – confidence, cost and convenience – when deciding where to go for routine car maintenance.

What are the 5S in automotive principles? ›

The process of 5S was coined and made popular by Toyota. It is based on 5 principles starting with the letter “S”. In Japanese, Seiri (Sort), Seiton (Systematize), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain).

What five 5 features do you need in a vehicle? ›

Top 5 Vehicle Safety Features, According to California Personal Injury Attorneys
  • #1 – Airbags. ...
  • #2 – Forward Collision Warning and Braking. ...
  • #3 – Blind spot monitoring. ...
  • #4 – Lane Keep Assist. ...
  • #5 – Inattentive driving monitor.
Jul 20, 2021

What are 5 responsibilities of a mechanic? ›

  • Build and assemble machines or mechanical components according to requirements.
  • Inspect machines, engines, transmissions etc. ...
  • Conduct repairs aiming for maximum reliability.
  • Troubleshoot reported problems and resolve them in a timely manner.
  • Perform thorough maintenance on machinery, equipment and systems.

What kind of math do auto mechanics use? ›

Tools and components routinely measure less than an inch, which makes it essential to have a firm grasp on basic arithmetic involving fractions. Most automotive technicians should also be able to conduct quick conversions between metric and imperial units.

How can I teach myself auto mechanics? ›

But here are some tips to learn the basics of car repairs:
  1. Tinker on an Old Clunker. Pop the hood and get your hands dirty! ...
  2. Meet Car Enthusiasts. Cars are a hobby for some people. ...
  3. Visit the Auto Parts Store. ...
  4. Watch Car Repair Tutorials. ...
  5. Pick Up a Car Manual. ...
  6. Take Classes to Become an Auto Mechanic.
Sep 16, 2020

What are the 7 major components of an automobile? ›

(i) A steel frame, which is a major part. body and other accessories, which are not involved in the movement of the vehicle. (iii) Other major components include engine, transmission system, front and rear axle, steering system, suspension system, wheels, tyres and brakes.

What are the 10 major automotive systems? ›

Vehicle Systems Overview
  • Batteries.
  • Belts & Hoses.
  • Brake System.
  • Emission System.
  • Engine Cooling.
  • Exhaust System.
  • Filters & Fluids.
  • Fuel System.

What are the 10 most important pieces of a vehicle? ›

Top 10 Car Parts You Should Know About
  • Battery. Your car's battery is a critical component; without it your vehicle won't turn on, as it provides the electricity needed to power and start your car's engine. ...
  • Axles. ...
  • Brakes. ...
  • Pistons. ...
  • Radiator. ...
  • Shock Absorbers. ...
  • Air Filters. ...
  • Muffler.
Apr 19, 2022

Which business is best for dealership? ›

Some of the best profitable business in India in respect to dealership business are:
  • Automobile Dealership Business. ...
  • Food Dealership Business. ...
  • Organic Food Dealership Business. ...
  • Health Care and Beauty Products Dealership Business. ...
  • Jewellery Dealership Business. ...
  • Furniture Dealership Business.
Nov 15, 2021

What business can I do with my own car? ›

On This Page
  • Use a rideshare app.
  • Work with a food delivery service.
  • Shop for groceries.
  • Wrap your car with advertising.
  • Help move large objects.
  • Rent your vehicle out.
  • Deliver for Amazon.
  • Operate as a shuttle service for children.
Jul 20, 2022

How can I grow my car business? ›

The Road to Success: Tips for Growing Your Car Dealership Business
  1. Develop Your Marketing Strategy. On average, people keep their cars for about seven years. ...
  2. Build Your Reputation. ...
  3. Be Efficient. ...
  4. Know Your Cars. ...
  5. Know Your Buyers. ...
  6. Provide the Best Customer Service. ...
  7. Recruit Well. ...
  8. Take Your Dealership Business to the Next Level.
Oct 3, 2019

Do auto shops make a lot of money? ›

Generally, larger auto repair shops can earn up to $100,000 per annum, and your mechanics may earn between $30,000 and $50,000. However, your profit may depend on where your auto repair shop is located and your area of expertise.

What is the average profit on a car? ›

Average profit per new or used car

The National Automobile Dealers Association (NADA) reports that the average gross profit for a used car is $2,337. That same data set puts the average gross profit for new cars at $1,959.

How do car companies make money? ›

Car dealers make money in many ways besides loans: off the vehicle itself, from your trade-in, from warranty sales and service work. Profit from one area of the sale may subsidize a discount in another. The dealership leverages that fact to maximize its overall profit.

What does a C mean in automotive? ›

The air-conditioning system in a car works by manipulating refrigerant between a liquid and a gaseous state. As the refrigerant changes states, it absorbs heat and humidity from the vehicle and allows the system to give off cool, dry air.

What does CS mean on a car? ›

CS finance, also known as a Conditional Sale agreement, is a type of vehicle finance that means you will automatically own the car once you've made your final payment. Get a quote. CS finance stands for Conditional Sale agreement.

What does Code 3 mean in cars? ›

Code 3 – Permanently Unfit For Use

To the insurance company the cost of fixing the damage would amount to more than the car's value at that particular time. Code 3 vehicles are usually sold for a lot less than Codes 1 and 2 cars.

Which of the following are 5 lean principles? ›

According to Womack and Jones, there are five key lean principles: value, value stream, flow, pull, and perfection.

What is lean 6S? ›

6S (otherwise known as 5S + Safety) is a system that aims to promote and sustain a high level of productivity and safety throughout a workspace. While adhering to the 5S principle of Sort, Set in order, Shine, Standardize, and Sustain, the 6S method adds the concept of Safety.

What are the 5S in Lean Six Sigma? ›

The five words in 5S represent the five steps to accomplish this goal. They are sort, set, shine, standardize and sustain. Lean bases the words on the original Japanese: seiri, seiton, seiso, seiketsu and shitsuke. 5S is a key component in eliminating the eight wastes of Lean when setting up a workstation.

What are the 4 basic safety features in all the vehicles? ›

Here's a rundown of some basic safety gear.
  • Airbags. Front airbags have been standard on all new cars since 1998 and light trucks since 1999. ...
  • Antilock brakes (ABS) ...
  • Traction control. ...
  • Electronic stability control. ...
  • Safety-belt features. ...
  • Newer safety features - accident avoidance systems. ...
  • Tire-pressure monitors. ...
  • Telematics.

What are the 4 things you need to start a car? ›

In order to start running under its own power, an engine needs four essential things: air, fuel, compression and spark.

Is selling cars a profitable business? ›

In fact, many people have earned a good income just by selling their cars. You don't have to be an experienced salesman to be able to sell their car for profit. If you like cars and have a sound knowledge of their technicalities, earning money by selling them is not difficult.

How can I make money in the car business? ›

Make Money with Your Car
  1. Corporate Car Service. You can still offer on-demand transportation service without driving for Uber or Lyft. ...
  2. Airport Shuttle Service. ...
  3. Car Rental Service. ...
  4. Medical Transportation Service. ...
  5. Child Pickup Service. ...
  6. Equipment Transportation Service. ...
  7. Mobile Advertising Service. ...
  8. Mobile Detailing Service.
Jan 30, 2019

How do I start my own business from scratch? ›

How to Start a Startup
  1. Make a business plan.
  2. Secure funding.
  3. Surround yourself with the right people.
  4. Follow the right legal procedures.
  5. Establish a location.
  6. Develop a marketing plan.
  7. Build your customer base.
  8. Plan to change.

How do small dealerships make money? ›

Car dealers make money in many ways besides loans: off the vehicle itself, from your trade-in, from warranty sales and service work. Profit from one area of the sale may subsidize a discount in another. The dealership leverages that fact to maximize its overall profit.

Do car dealership owners make a lot of money? ›

The salaries of Car Dealership Owners in the US range from $18,902 to $495,413 , with a median salary of $90,593 .

How do I become a successful car dealer? ›

The Road to Success: Tips for Growing Your Car Dealership Business
  1. Develop Your Marketing Strategy. On average, people keep their cars for about seven years. ...
  2. Build Your Reputation. ...
  3. Be Efficient. ...
  4. Know Your Cars. ...
  5. Know Your Buyers. ...
  6. Provide the Best Customer Service. ...
  7. Recruit Well. ...
  8. Take Your Dealership Business to the Next Level.
Oct 3, 2019

What is flipping cars? ›

What is Car Flipping? Similar to real estate, car flipping is the process of buying a used car at a low price with the express intention of selling it quickly for a higher price. Both sides of the transaction — the buying and the selling — are usually done privately and not through a dealership.

How many cars can I sell in a year? ›

Generally, you are allowed to sell no more than four vehicles per year without having an auto dealers license under Department of Licensing (DOL) guidelines. However, you are not allowed to title these vehicles in your name without paying either sales tax or use tax.

Can I make money renting my car? ›

You can make some extra money with online services that let you rent out your car to other drivers when you're not using it. Renting your car online could be a quick way to make extra money on the side, and you really don't have to do anything extra in your day-to-day life.

How can I make money fast with no job or car? ›

11 ways to make money without a real job
  1. Get paid to test websites. Many companies aim to deliver an excellent customer experience through their websites. ...
  2. Become a crowdworker. ...
  3. Design and sell t-shirts. ...
  4. Work as a transcriber. ...
  5. Shop for others. ...
  6. Sell crafts online. ...
  7. Get paid to pet sit. ...
  8. Sell your photos online.
Feb 8, 2022

What are the 10 steps to starting a business? ›

  1. Conduct market research. Market research will tell you if there's an opportunity to turn your idea into a successful business. ...
  2. Write your business plan. ...
  3. Fund your business. ...
  4. Pick your business location. ...
  5. Choose a business structure. ...
  6. Choose your business name. ...
  7. Register your business. ...
  8. Get federal and state tax IDs.

What are the 4 basics to a start up business? ›

Requirements for Starting a Business

An ownership or business structure. A business registration certificate. A legal license or seller's permit (as well as other legal documents) A source of funding.


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