When starting any business, it is the owner’s hope that it will be profitable. The same goes for an auto repair shop. However, many are not sure how to get there or where to start. Is it the tools? Or maybe the location?
However, you have to look at the big picture to determine if an auto repair shop is going to be profitable. And, there are a few areas that need to look at including:
- Business costs
- Ownership Costs
- “Other” Expenses and Profits/Losses
In this article, we provide information on how to make your auto repair shop more profitable. We will also answer “Is owning an auto repair shop profitable?” as well as “How profitable are auto body shops?”.
So, before spending money on any supplies or locations for your business, read through our guide so you can figure out what it’s going to take. You do not want to start an unprofitable business and lose all of the hard-earned money you put into it.
How can I make my auto repair shop more profitable?
In the 21st century, the profitability of an auto repair shop is determined by marketing efforts. As opposed to decades ago when auto repair shops used traditional marketing efforts, like flyers and information cards, to attract customers; today’s marketing efforts use digital marketing technology.
Digital marketing techniques have gained popularity since the early 2000s. With the rise of smartphones and social media, digital marketing has become increasingly popular, with businesses able to digitally market their products and services 24/7.
With the right marketing efforts in place, an auto body shop will be well-connected with the local community. Thus, making their services in high demand.
Some of the best digital marketing techniques include:
Auto repair SEO, or Search Engine Optimization, uses the proper keywords and phrases to rank a website in search results for keywords and phrases relevant to their industry and products/services offered. SEO is an important digital marketing technique because it targets potential customers looking for businesses like yours through search engines such as Google, Bing, Yahoo! etc. For example, if someone wants to work on their car’s brakes they will likely go to Google and type in something like “[city] auto repair” followed by “brakes.” Check out our full list of the best keywords for auto repair shops.
If your business website ranks higher than other competitors’ websites in the organic results of the search engine you’ll be able to catch your customer before competitors do.
2. Google My Business (GMB)/Maps Listing:
Google My Business is a free service offered by Google that allows business owners to list their businesses on Google Maps and Search, as well as share content and updates about the business on Google+, Facebook and Twitter, etc. By creating a GMB listing, your customers can see directions (in some cases live traffic cams), view photos of your shop, and full information such as hours of operation, website URLs, phone numbers, and more!
GMB listings also appear in Google search results for certain searches like “[your city]’s auto repair.” If you do not already have a GMB listing set up, sign up now. The process takes less thane five minutes to complete and it’s free! If you have already set up a GMB listing make sure that your information is accurate and up-to-date.
3. Social Media:
There are many social media websites but some of the most popular include Facebook, Twitter, Pinterest, Instagram, Linkedin, etc. All of these websites can be used to either connect with customers before they enter your shop or after they leave. For example, on Twitter, you can tweet customers a deal on oil changes if they stop in or offer coupons for customers who post pictures of their repaired cars on Instagram.
4. Google Ads (AdWords):
Another great digital marketing technique is Google Ads. With Google Adwords, you can target potential customers in your local area by showing ads when they search for certain keywords related to auto repair. For example, someone in [city], [state] may type “auto repair” into the search bar at Google.com and this triggers an ad that shows up on the top of the results page for users in that particular region. The ad will include your business’s relevant website URL, phone number, an image of your location, etc.
The above-mentioned digital marketing techniques are just some of the popular efforts that can help boost your auto repair shop’s local visibility and increase customer conversions. With the right tools in place, you will be able to connect with customers before or after they enter your business and steer them into making a smart purchase decision.
What is the average profit margin for auto repair?
There is not really one answer to this question. The profit margin will be different for every auto repair business. You can make between 10% and 50% of your revenue in profits depending on the type of shop you are running, the products/services offered, what % you mark up parts, etc. Your technician wages are usually very similar across the industry. However, your expenses (insurance, liability coverage) will vary by state to state or even city to city.
How profitable are auto body shops?
The average profit margin for auto body shops depends on a number of factors. First, is the shop a non-franchise or franchise location? If it’s a franchise then you’re going to pay royalties and fees out of your sales. A traditional body shop may charge someone $1000 to repair their car from the accident, but the insurance company only pays them $500 so they make $500 and hope to find some add-ons. That’s how some places stay in business even if they have little customer traffic because it’s more about the money/profit you get from each job than how much work you do per job.
Another factor that plays into the profitability of an auto body shop is overhead costs such as rent, equipment, etc. Shop equipment has become very advanced in the past decade making the labor of working on cars much easier and faster when it comes to things like frame repair/straightening, painting, etc. The more high-tech tools you have the more money you are likely to make simply because they are efficient – time is money after all.
An auto body shop’s profitability can vary greatly depending on location as well. Some city areas charge more for everything from rent to insurance than other parts of the country (or even the world). All these factors play into your bottom line and how much money you make per job or month or year.
Is owning an auto repair shop profitable?
The answer could be yes if you are running a successful shop. However, it’s not always the most profitable business in the world because there are so many variables that could affect your profitability. If you have great customer service and utilize digital marketing techniques, well then likely more people will come through your doors and you’ll make more money than someone who doesn’t.
The goal of any type of business is to make money and auto repair shops aren’t any different – it’s just like anything else: the harder you work (and smarter) the more money you can generate.
To make your auto repair shop more profitable you have to take advantage of all the marketing techniques available in today’s world. For example, using Google AdWords can yield great results in terms of driving targeted customers to your website. There are many different digital marketing techniques that you can implement into your business, so pick one or two and begin building your customer base.
It could also be helpful to consult with a reputable digital marketing agency that will help you analyze your business and recommend different strategies based on what they know works!