How to Start a Mechanic Business (Step-by-Step)

How to Start a Mechanic Business (Step-by-Step)
A step-by-step guide on how to start a mechanic business and the requirements to start a mechanic shop. Visit Square to know more.
by Square Mar 02, 2022 — 4 min read
How to Start a Mechanic Business (Step-by-Step)

Are you a fan of all things automotive? Do you want to turn that interest into a full-time career? Do you have an entrepreneurial mindset? If the answer to these questions is yes, yes and yes, it might be time to consider starting a mechanic business.

Mechanics provide all-important vehicle maintenance, repairs and custom installations to businesses and members of the public. Cars, trucks, motorbikes and other vehicles can be particularly dangerous if not properly maintained, so this is a business that comes with a lot of responsibility. That said, the opportunity to work in an area you find fun and that you’re genuinely passionate about can be an alluring prospect for entrepreneurs.

If you’re considering this path, the question then becomes how to start your own mechanic shop – which is exactly what we’ll be answering below.

Owning a mechanic shop vs a mobile mechanic business

Before we dive into how to start an auto repair shop, we should first consider whether you need a shop at all.

Mechanic businesses can be grouped into two categories: garages and mobile mechanics. If you own a garage or workshop, your customers come to you. If you own a mobile mechanic business, you go to your customers.

Garages and workshops have higher costs – renting a workspace obviously costs more than leasing a vehicle – but they also have greater earning potential. You can work on multiple cars at once, you can employ more mechanics, and you can invest in tools that can handle a wider variety of work and make that work far more efficient.

Mobile mechanic businesses have their perks, like the ability to largely set your own schedule and the freedom of life on the road. The path you choose will be an entirely personal decision, though in this article we’ll focus on how to open a mechanic shop or garage, so some of the below may not apply if you choose to go mobile.

Requirements to start a mechanic shop

What skills, qualifications, permits and licences will you need to start your mechanic business? Let’s take a look at the main considerations.

Mechanic qualification

Every mechanic business must have at least one certified mechanic. There are four main mechanic courses in Australia, each of which takes 12-24 months to complete:

A number of other qualifications are required for more specific work, such as examining second-hand vehicles, modifying vehicles and installing gas systems.

Motor vehicle repairer’s licence

On top of these qualifications, all states except Victoria require the mechanic shop owner to hold a motor vehicle repairer’s licence, which lasts for three years. The authorities in charge of distributing these licences change from state to state, but the links to each can be found below:

Business registration

Like any business owner, you’ll need to register your enterprise by obtaining an Australian Business Number (ABN) or an Australian Company Number (ACN). Because a company structure will help you to shield yourself from liabilities associated with your business, most mechanic shop owners will obtain an ACN.

A garage or workspace

The final requirement is space to do your work! Vehicle maintenance and repair requires a unique space – ideally one that is built for the purpose. You’ll need plenty of room to fit vehicles, good ceiling clearance and ideally a vehicle inspection pit or two (although you can alternatively invest in a car hoist.)

Well-designed garages don’t come up for lease often and are very expensive to build or buy, so this can form a major hurdle for those considering starting their own shop.

Insurance for an auto mechanic business

Insurance is a key consideration in a mechanic business, as working in the automotive industry brings inherent risk. You need to think about public liability, worker injuries, equipment damage, theft, fire, and a wealth of other potential issues.

Many insurers offer motor trades-specific coverage, which tends to insure against the following:

Essential equipment needed to start a mechanic shop

Speaking of equipment, what gear do you need to buy to kit out your new business? The answer will depend on the type of work you plan to undertake, but here is a basic list:

Market your business

Qualified, insured and equipped, it’s time for you to open. But the automotive industry is competitive, so you’ll have to conduct some savvy marketing in order to get customers through your garage doors:

How much can you charge customers?

How much will you charge for your services? Mechanics make money in two main ways: through labour and through mark-ups on products and parts. Your rates should be set at a level that customers feel is fair, but that also ensures you can cover your costs comfortably – which means that an inner-city mechanic will generally charge more than a country mechanic.

An hourly rate of $70-$120 is around the mark for most independent mechanics, though what you charge is up to you.

Payment solutions for automotive businesses

That, in basic terms, is how you start a mechanic business – what you do with this information is entirely up to you. If you decide to take the leap into the automotive world, know that Square will be there with all the tech you need to make your new venture as smooth and enjoyable as possible.

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The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.

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