10 myths from the field of opening your own car service centre
Have you been nurturing the business idea of opening your own car repair shop for a long time and constantly postponing its realisation for various reasons? And this is despite the fact that you've probably collected a lot of useful information and listened to a thousand tips. We will try to help you make the right decision by debunking the main myths surrounding the topic of opening a service station.
What it's all about
In a narrow sense, a car service – is a system for restoring and maintaining a vehicle throughout its lifetime. Its main components include:
- diagnostics of motor transport;
- vehicle maintenance and repair;
- sale of spare parts;
- sale of materials and equipment;
- inventory management;
- customer service.
Today's car service in Russia – intensively developing and prestigious business. The constantly growing demand for its services due to the annual growth of the car fleet. And yet, despite the significant pace of development of the car service, it is still too early to claim that the demand for its services has been satisfied.
For those who want to enter this business and avoid mistakes in the process of its formation it will be useful to get acquainted with the misconceptions associated with opening a car service centre.
Autoservice Mythology
Every community is born with its own myths. The community of people with an interest in setting up their own car service business is no exception.
Myth #1. You can start an auto repair shop from scratch – with no start-up capital.
Development without initial capital investment is impossible. And if you don't have the money and you plan to open a shop that is not a cottage industry – you will have to borrow money or apply for a loan from the bank.
Why do you need these funds? At a minimum – it is the rent of the premises, the purchase of tools and equipment, payment of utility bills, salaries of employees, advertising costs.
At the very least.
Myth No. 2. At the initial stage, an ordinary garage is suitable as the premises for car service.
In a standard garage you will only be able to service one car. This approach will limit the amount of work you can do and what you can do if you want to expand. It will also discourage customers who don't have time to queue for long periods of time.
A standard garage will only allow you to service one car.
A small station with 3-4 employees will need about 100-150 metres2, and a multi-functional workshop will need 300-400 metres2. The premises must comply with the norms and requirements of the State Fire Inspectorate and the State Sanitary and Epidemiological Service.
Myth No. 3. To conduct business activities in the field of repair and maintenance of motor vehicles, it is enough to undergo state registration as an individual entrepreneur or legal entity.
In addition to state registration and tax registration, you will need permits from the sanitary and epidemiological service and fire safety inspectors to start work.
The suitability of your staff must be confirmed by appropriate documents. You will have to conclude a contract with an organisation that carries out rubbish removal and waste disposal.
Accordingly, you will have to sign a contract with a waste disposal organisation.
Myth No. 4. The main thing when recruiting staff for a service station –find experienced and qualified craftsmen.
Based on these selection criteria alone, you may find yourself an «specialist» who also has professional knowledge and skills in hiding earnings from the owner or stealing logistics.
Therefore, in addition to professional, attention should be paid to the candidate's personal qualities. Positive references and references from previous employment are welcome.
Please note that the candidate's personal qualities should be considered in addition to professional qualities.
Myth #5. One type of service is enough to start a car service.
Suppose that only starter and alternator repair will gradually increase the number of customers and your earnings over time.
Any one service is enough to get you started.
But the additional purchase of an oil changer, tyre changer and balancer will increase your profits many times over and shorten your payback time.
Myth #6. You need a lot of money to run a successful car business.
In fact, the range of standard workshop services is vast enough to choose the most financially affordable option and give your car business a good start.
- Lubrication and refuelling operations;
- adjustment and check-diagnostic services;
- bodywork and painting;
- pre-sale preparation;
- glass installation;
- repair of gearboxes, engines, chassis, steering, electrical system, brake system;
- replacement of parts, assemblies, units;
- installation of additional equipment for service stations, etc.
Myth #7. Car service – stable income at any time of the year.
The flow of car service customers is usually about the same in spring and autumn. In winter there is a strong decline, and in summer – a significant rise. In addition, the fluctuation of profitability throughout the year depends on the range of services provided by your service station.
Myth #8. Increasing the number of customers of a new car service station is achieved by high quality of services.
Quality of work – mandatory, but not the only component of the success of a new service station. We should not forget about the successful location of the service, intelligent staff, competent organisation and convenient working hours, a wide range of services and their price.
Myth #9. There is a lot of competition in the car business and its organisation – a very risky step.
What business today has no competition? Opening a service station is not a spontaneous decision. It must be preceded, among other things, by a study of the competitive environment.
You need to know your main competitors, correctly assess their weaknesses and strengths, to analyse consumer preferences. This way you will identify the competitors that you can move or avoid. By correctly assessing your competitive advantages, you will minimise your initial risks.
Myth #10. Investing in a car service centre pays for itself very quickly.
Depending on what is meant by the term «quickly». If it is a 6-month period – unlikely. If it is 1 year, it is quite realistic if the business is run properly. On average, investments, for example, in equipment for a service station pay off in 2-3 years.
In general, the car business is characterised not only by a high threshold of entry, but also a good profitability of 20 to 50%. It can be increased by increasing the number of additional services.
Closure
Practice shows that those who can count money and adequately assess the prospects of their promotion in the car business are able to make progress in the development of car service.
Conclusion
If you are such a person, not inclined to overestimate your managerial talents, ready to lead your business past all «pitfalls» – any problem on the way to success will turn out to be a myth for you.