How to Open an Automobile Service Station Business

One can start an automobile service station business in an urban or semi-urban city with also a stock of spare parts. The increase in sales of vehicles has created an opportunity in the automotive sector for starting a profitable automobile service station business.

The most interesting part of this business is that you will not need to have a retail place in a high-traffic destination at a higher price. One can set this type of business establishment home-based or in an area that is not too far from the central city area.

Here are the 10 Steps to Start an Automobile Service Station Business

1. Get Experience and Skill

These two are the most important aspects of this business. If you don’t have any previous experience then we will recommend you to work with a service station first. You must know the nitty-gritty of the business before investing your own money. Every industry has its trick of trade. And you must know. You can also think about doing a short course in automobile engineering.

2. Market Research

Do extensive market research before launching your service station in the locality where you want to establish an automobile service station. Do an extensive survey on service stations to try to find out the gap of opportunity. Which service is missing there? You can focus your business on that specific service.

Find out what are the most demanded services that customers need. And check the rates of other service centres for those services. Also, check what type of equipment and tools they are using. It matters in this business.

It is also important in selecting the location. Your location must have a certain distance from the nearest service center.

3. Arrange Finance

The automobile service station is a cost-intensive business. On average, you will be required to invest in crores to start it in India.

Opening an automobile service station needs three basic types of investment. These are infrastructure, equipment, and manpower. The volume or quantity depends on several aspects like services you want to provide, the number of vehicles you want to accommodate at a time, etc. Also, it depends on the projected business volume you expect from the service center.

Read: Best Business Loans for Small Businesses

Regardless, of whether you are investing your own money or taking a loan, you will need to be very careful about financial planning. Calculate the expected break-even and ROI both before investing a single money in your business.

4. Select the Type 

Various kinds of services include automobile service station business.

• Car wash
• Mechanical jobs like the engine, gear, accelerator, shock absorber, etc.
• Electrical jobs like horn, light, etc
• Car air conditioner service
• Wheel balancing and alignment
• Several oil change services like engine oil, gear oil, steering oil, etc
• Car body repair services like painting and denting
• Battery service
• Car body polish service

5. Create an Automobile Service Station Business Plan

Create a detailed business plan for your automobile service station business. What are the services you will be going to offer to your customers? What will be the equipment needed? And what kind of manpower to have? How much area is required for the setup? Calculate the start-up budget with manpower cost and some stock of spare parts, oils, etc.

6. Register your Business

It is essential to register your automobile service station for hassle-free operation. There are various types of business formations one can choose based on their size and scale of operation. Some of the popular ones are sole proprietorship, partnership, and private limited company. Select the one that fits you best.

7. Procure Licenses and Permits

It is advised to talk to an expert or local competent authority and learn more about the set of licenses needed to run an automobile service business in the desired locality. It is worth mentioning that at present, you must have a GST registration number to run this business in India.

8. Buy Equipment For Automobile Service Station

As per requirement search about the equipment and machinery, you will need to have it. For a car wash, you will need to have a hydraulic lift with a pneumatic wash gun. For every specific service, you will need to have updated technology equipment to give your clients the best service.

Obtain software for record-keeping. This tailor-made software will help you to track your customers properly. Also, you can give them a reminder when the time comes for the next service of their vehicles.

Go for some storage of spare parts that are regularly needed. It helps in generating an extra margin from there. You can also keep some common auto accessories like seat covers, perfumes, etc. You can decorate one of the corners by placing this and also you will gate extra revenue out of that.

9. Hire Manpower

Two different types of manpower are required to start the automobile service station business. Keep technically sound, skilled manpower for mechanical jobs. As per requirement check their experience and certificates. It is always advisable to keep an automobile engineer to overview the entire operations.

Hire some personnel for office work like job card preparation, billing, cash payment, etc. You can also have a customer care executive who can interact with the customer post-service about their experience with the workshop. As this is a service industry, and customer satisfaction is the only criterion, it will give you enormous value addition in your automobile service station business.

10. Promote Your Automobile Service Station

Start advertising your automobile service station business locally.  Give some advertisements in the local newspaper, Yellow Pages, and auto magazines. You can circulate some flyers or leaflets also. Just keep the leaflets on the windshield wiper of the cars standing in a parking zone.

Create a website. Explain the detailed services you are offering and the advantages of your services there. You can add some special benefits like a pick-up and delivery facility on your client’s doorstep.

Frequently Asked Questions

How Much Does it Cost to Open a Car Service Center?

The investment and area requirements will depend on the location and the size of the service station. The cost to start a new automobile service center service business will be a minimum of Rs. 1 Cr. Additionally, an area of around 5000 sq. ft is essential to open a car service center business.

Are Car Service Centers Profitable?

Yes, it is without saying car service is a highly profitable business. As more and more people show interest in buying cars, the car service industry is poised to grow in the coming days. However, the degree of success in the automobile service station business will hugely depend on the location and how you plan it.