Are you a fan of all things automotive? Do you want to turn that passion into a full-time career? Whether you already work in the industry or are looking to enter a brand new field, starting your very own auto repair business can be one of the most exciting endeavours of your life. Auto repair shops provide crucial vehicle maintenance, repairs and custom installations to both businesses and the public. Cars, trucks, motorcycles and other vehicles can be particularly dangerous when not properly maintained, so it is important to note that this is a business that comes with a heavy chunk of responsibility.

Moreover, running an automotive business requires a lot of business savvy, grit, determination and self-confidence. If you are unsure of where to begin, you’ve landed on the perfect article. Today, we share 7 tips on starting your very own auto repair business in Australia.

1. Sign up for your ABN

Before you embark on any plans, signing up for an ABN is key. An ABN is a unique 11 digit number that identifies your business to the government and community. You will need an ABN to register your business name, to claim tax credits, and for invoicing purposes. Thankfully, signing up for one is relatively simple and free when you head to the Australian government’s business registration service page.

It’s important to get off to the best start and consider your legal and tax obligations, as well as your plans for the future. The main structures to choose from when starting your auto repairs business are:

• sole trader
• partnership
• trust (including unit trust, discretionary trust or family trust)
• company
• any combination of the above structures.

Choosing the correct business structure is important to ensure you have the right factors of:

• taxation obligations
• liability limitation
• capital requirements
• cost and complexity to set up and run
• flexibility
• your future plans and exit strategy
• asset protection and control.

Top Tip: If you are unsure of the complexities of setting up your own business or registering for an ABN, we’re here to help you navigate the intricacies of starting and owning a business with our range of business services.

2. Obtain your business licence

Right after signing up for an ABN, the next most important thing is obtaining your business licence. As a starter, you will need a business licence that is valid for three years to open, own, and operate your workshop. Keep in mind that there are a number of prerequisites and conditions that need to be in place before you can apply for your licence.

Depending on where in Australia you want to operate your business, you can find more details about the licensing requirements of each jurisdiction here:

ACT: Office of Regulatory Services

WA:  Department of Commerce 

NSW: Office of Fair Trading 

Tasmania: Consumer Affairs and Fair Trading 

QLD: Office of Fair Trading 

South Australia: Consumer and Business Services 

NT: Consumer Affairs

VIC: Legal requirements of owning and operating an auto repair business in Victoria differ from other states. Find out more here. 

3. Develop a business plan

Now that you have obtained your business licence, it’s time to kick your business plan into gear. A business plan is a vital tool that will help you steer your business as you start and grow. A good business plan will guide you through each stages of starting and managing your business, and a few things to consider include:

• the type of services you will be providing;
• your target market;
• startup and ongoing expenses;
• the number of employees you intend to have; and
• the amount you will be charging your customers.

During the process of developing your business plan, it can be beneficial to conduct some market research. This will help you to understand the industry, set yourself apart from the competition, and create realistic goals.

4. Decide on your location and equipment

Unlike a regular business that may only require a small shop or unit to operate out of, an auto repair business will need to consider operations and logistics when choosing an ideal location. Your ideal space will need to be big enough to not just house a number of vehicles, but also allow customers to pull in and out of the garage without risk of causing any further accidents. In terms of height, your ideal garage will need to be able to house all your equipment and machinery. A good amount of natural light entering your space is also a good idea.

Aside from operations, thinking about where your target market is and how far they are willing to travel is key when choosing the ideal workshop location. You don’t want to be too far from your customers, and ideally, you’ll pick a spot with minimal competition in the area.

Invest In High Quality Tools and Equipment

In order to run a successful auto repair business, investing in high quality tools and equipment for the job is paramount. Some of the essential tools you will need to run your business successfully include:

• Engine hoist for engine inspection and repairs;
• Brake lathe for inspection and replacements;
• Jumper and battery chargers;
• Oil caddy and drainage system for oil change; and
• Vehicle lifts and jacks to raise vehicles.

Additionally, you are also encouraged to consider software for managing tasks such as:

• Invoicing;
• Appointment booking;
• Work orders;
• Payroll;
• Inventory; and
• Customer relationship management (CRM).

We have a variety of accounting software options to best suit every business. Have a chat with us to find the right one for you.

5. Consider insurance

Insurance is another crucial thing you have to consider when starting an automotive repair business. There are a number of risks to mitigate when operating an automotive repair business. Some of these risks include employee injury, theft and equipment breakdown. As such, protecting yourself with the right kind of insurance is key to avoid any mishaps or financial repercussions down the line. To be on the safe side, we recommend looking into the following insurance policies:

• General Liability
• Public Liability
• Workers Compensation
• Theft
• Professional Indemnity
• Customer Vehicle Cover.

6. Set up your legal documents

Amidst the excitement of starting your own business, don’t forget to have all the relevant legal documents in place before you open up your auto mechanic business. Legal documents are a crucial aspect of running your own business and help protect your business in the event that something goes wrong.

Some important documents that you may need for an auto repair business include:

Cancellation Policy – A cancellation policy should be in place within your service agreement to reduce last-minute cancellations.

Employment Agreements – If you intend to hire workers, it is vital for you to prepare employment agreements, it’s likely you will need some help. Employees are covered by both national and state legislation, the main one being the Fair Work Act. Employees have rights and entitlements including:

• minimum wage
• sick, annual, long service, and other leave types
• superannuation guarantee
• protections at work.

Any wages you pay will be subject to PAYG withholding, which will have to be paid to the ATO in your monthly or quarterly activity statement.

Your entity will also be required to register and pay workers compensation insurance for any employees, as this is compulsory in every state in Australia.

Marketing and building your customer base

Lastly all your hard work is rendered futile if you are not able to attract customers to your auto repair shop. This is where marketing comes into play. Thankfully, social media and the internet has made it incredibly easy for business owners to market their services online, and a few simple ways of marketing your auto repair business include:

• creating a Facebook Business Page;
• starting a business Instagram;
• paying for sponsored posts on a variety of social media websites and platforms;
• handing out flyers;
• vehicle signage; and
• reaching out to local towing services in the area for referrals.

And there you have it – everything you need to know when starting your very own auto repair business in Australia. If you’re looking for guidance on how to finance and set up your automotive repair business, give AFS & Associates a call on 03 5443 0344 and speak to our business services experts.