Costs to Start A Diesel Repair Shop

Cost To Start Up A Diesel Repair Shop

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A diesel repair shop can be a lucrative business. People will always need trucks to deliver things and trucks will always need fixing. There are also school and transit buses as another source of revenue. However, starting a diesel repair shop takes a considerable amount of investment. 

The costs to start a diesel repair shop are around $18,000-$30,000. Your investments will include education and training ($1,500-$8,000), getting the property ($1,500-$15,000), acquiring equipment and tools ($9,500), insurance and other administrative expenses ($5,000 or more), employees( $23 per hour per employee plus benefits), and advertising ($500-$2,000).

Education and Training

Costs to Start A Diesel Repair Shop

Unless you grew up in a repair shop and learned the ins and outs all your life, you’ll need training if you want to repair vehicles properly, Repairing vehicles, big or small, can be dangerous to both you and the owner if you don’t have the proper training. Vehicles are complex machines and knowledge is required to repair them. Knowledge is also often required to get the necessary licenses needed to open your shop. While it is certainly plausible to get around this by hiring staff with the knowledge and certifications, you may end up having to do some of the work yourself. Truckers are a no-nonsense group of people and word spreads in that community you have to turn down work because your employees were out and you weren’t trained to do the work the trucker needed you to do, it will reflect badly on your business.

Luckily, the training shouldn’t take too long if you’re committed. You have a few options. The conventional option is to get an associate’s degree, which can take two years. You can also get a diesel mechanic certificate which takes six months. It may take some monetary investment, around $5,000-$10,000 but there are scholarships and grants available.

Another certification that you’ll need is a commercial driver’s license.  If you want to operate these vehicles, you’ll need to know how to drive them. Many people who own diesel vehicles won’t trust anyone who doesn’t know how to drive them. Plus, you might want to test drive a vehicle you just repaired before you return it to a customer. Getting this training can take a few hundred dollars and six months of classes that can cost around $1,500-$8,000

The final certification is the Certificate of Automotive Excellence. While it’s not technically required, it will help you in certain aspects of your business. A CSE helps you market your business. A lot of truckers, whose livelihood relies on their vehicles, won’t trust a shop without a CSE. If you’re looking to get government contracts to repair their vehicles, having a CSE will help your chances. Plus, it will help you gain investors. It takes two years to get this certification, one of which requires working in a shop. 

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Getting a Property

You need a property to open a repair shop. The kind of property matters. Starting a diesel repair shop is not like starting a normal repair shop. A lot of roads don’t allow large vehicles like trucks or buses. Having a shop where your clients can’t go is a bad business plan, to say the least. 

Get a property on a trucking route or a major industrial area. Diesel vehicles are allowed to go through those areas and if you set up a shop near a trucking route, that can increase your business as sometimes, trucks need emergency repairs and they don’t want to go too far off of their intended route.

 The cost of the property will depend on your area. A more crowded area like the coasts will be more expensive. Areas that are less populated like the Midwest, can have cheaper properties. The other factor is whether or not you’re buying a property that is already a diesel shop or if you’re converting one or building one from scratch. The latter two are far more expensive and buying a pre-existing shop is a big expense too. A diesel repair shop needs a lot of space, typically around 3,000 square feet or more. Depending on where you are, you’ll be paying $1,500-$15,000 a month. This is the cost of space and doesn’t include things like utilities. Since you’re dealing with large commercial vehicles rather than cars, you won’t have the option to run the shop out of your home. It is possible to run a mobile repair service truck that can help stranded truckers for roughly the same price but you won’t be able to offer the more sophisticated services that you can offer in a shop.

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Equipment and Tools

Running a diesel repair shop takes a lot of tools, big and small. You can’t repair trucks without them and you’ll need good tools too. You can’t have tools breaking in the middle of a job. A set of small tools, that includes things like wrenches, screwdrivers, welding torches, etc. can cost around $1,500. You will probably need to buy some extra tools if you plan to have extra employees so they aren’t passing tools around. It’s more efficient that way which is important since truckers don’t like to wait. You should also get some things like first aid kits for your garage.

Your medium-sized tools will include things like workbenches, jacks, and most importantly and expensively, a diagnostics machine. Since vehicles have gotten more complex, your shop will need a diagnostics machine to find and repair problems. This necessary machine will cost around $4,000. You’ll also need to be prepared to upgrade and repair it from time to time so have that in your budget.

Your large tools will be your most expensive to buy and maintain. A hydraulic lift, which you’ll want to get new can cost around $3,000. You’ll also want to have some tools to repair it just in case. An engine crane will cost around $500.

Have a stock of basic replacement parts on hand before you open your shop  You don’t want to have to tell all your customers that you need to order replacement parts on your first day.

Administrative Expenses

Costs to Start A Diesel Repair Shop

Insurance is important for a garage. A lot of things can go wrong and you’re legally required to have certain kinds of insurance. You’ll need general liability insurance to handle the most basic things that can go wrong like customer injury or property damage but you’ll also want to get a few other kinds specific to the repair business. Garage keeper’s insurance includes things like legal liability (in case of negligence or accidents), direct primary coverage (in case of catastrophe or crime), and direct excess (covers fees from other policies).  Errors and omissions coverage is needed in case there is an error in your or your employee’s work or a part turns out to be bad. Commercial property insurance covers your tools and equipment in case it gets damaged or stolen. You’re legally required to have Worker’s Comp insurance but how comprehensive it has to be will depend on your state. The various types of insurance will cost around $5,000 per year.

You will want a lawyer to handle the various legal things involved in setting up your business like setting up a legal entity and helping you with loan/investor contracts. If possible, you may want to hire someone who can handle your accounting unless you can do it yourself. The prices for these can vary wildly.

Employees

Having a well-trained and motivated staff is essential. You can’t do everything on your own and you’d be giving your customers a poor experience if you tried. However, your staff, particularly the mechanics, will have the same experience and certifications you do. You need to value and pay them accordingly, lest you lose them to a competitor or they decide to become your competitor. Pay ranges vary by state, but in general, you’ll be paying your mechanics around $23 an hour. If you’re adding benefits, you’ll be adding around $18 more per employee. This can be steep but mechanics work a lot and this job is competitive. You can get away with paying your general staff (receptionists, advertising team) slightly less but if you’re offering benefits to your mechanics, you should offer benefits to the rest of your team.

Advertising

Advertising as a small business can be a bit tricky, especially when your target market is always on the road. You should invest in basics like a functional website, social media pages, and getting pages on review sites as well as Google. The latter part is free but getting a good website can cost a few hundred dollars. If your priority is serving truckers, you may also want to look into getting local radio advertising which can cost anywhere from $200 to $5,000/

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Frequently Asked Questions

How Much Insurance Do You Need For Your Accounting and Payroll Business?
  • What are some other benefits of getting certifications?

Investors and loan officers will be more willing to work with you. You’ll also attract better talent. Employees want to work with a boss that is as competent as they are.

  • What benefits would employees want?

They’ll want things like health insurance coverage and pensions.

To learn more on how to plan your own Diesel Repair business click here!

Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.