Ever dreamt of running your own auto repair shop? If you love working on cars and want to be your own boss, opening an auto repair shop in Ontario might be your perfect business move.
But where do you even begin? From permits to costs, there’s a lot to consider—but don’t worry, we’ve got you covered! This guide will walk you through every step so you can launch your dream shop with confidence.
Steps to set up an auto repair business in Ontario
1. Create a solid business plan
Before you dive in, you need a game plan. A business plan helps you understand costs, potential earnings, and how to attract customers. Here’s what to include:
- Your services: Will you specialize in oil changes, engine repairs, or general maintenance?
- Target market: Who are your customers? Local drivers, fleet services, or luxury car owners?
- Startup costs and funding: How much do you need, and where will you get the money?
- Marketing strategy: How will people find out about your shop?
- Business structure: Will you operate as a sole proprietorship, partnership, or corporation?
2. Figure out your startup costs
Opening an auto repair shop isn’t cheap, but knowing your expenses upfront will help you plan wisely. Here’s a breakdown of potential costs:
- Garage rental or purchase: $2,000 – $10,000/month (depending on location)
- Equipment and tools: $50,000 – $100,000
- Business registration and permits: $500 – $2,000
- Insurance: $2,000 – $10,000 annually
- Marketing and website setup: $1,000 – $5,000
Total startup costs can range from $100,000 to $500,000, depending on the size and scope of your shop.
3. Register your business in Ontario
To operate legally, you must register your business with the Ontario Business Registry. You’ll need to:
- Choose a business name and check its availability.
- Select a business structure (sole proprietorship, partnership, or corporation).
- Register for a Business Identification Number (BIN).
- Apply for HST/GST registration if your revenue exceeds $30,000 annually.
4. Get business insurance for your mechanic shop
Accidents happen, and having the right insurance can save you from major financial losses. Common insurance policies include:
- Commercial property insurance: Covers damages to your building and equipment.
- General liability insurance: Protects against customer injury or property damage claims.
- Garage keepers insurance: Covers customer vehicles while in your care.
- Workers’ compensation: Required if you have employees.
5. Open a business bank account & get a credit card
Mixing personal and business finances is a no-go. A business bank account makes it easier to manage expenses and file taxes. A business credit card can also help build credit for future loans.
6. Obtain necessary permits & licenses
Ontario has strict regulations for auto repair shops. Some key permits include:
- Motor vehicle inspection station (MVIS) license: Required if you perform safety inspections.
- Environmental compliance approval: Needed if you handle hazardous materials like motor oil.
- Business license: Check with your city for local licensing requirements.
7. Hire skilled auto mechanics
Your shop is only as good as your team. When hiring mechanics, look for those with:
- Automotive Service Technician Certification (310S License)
- Experience working in professional repair shops
- Strong diagnostic and repair skills
- Excellent customer service skills
8. Market your auto repair shop
A great shop won’t make money if no one knows about it. Here’s how to attract customers and build a loyal customer base:
- Claim your Google Business Profile: This helps locals find you easily when searching for car repairs online. Keep it updated with your services, hours, and customer reviews.
- Run social media ads: Platforms like Facebook and Instagram allow you to target car owners in your area with special promotions and updates.
- Offer promotions and discounts: Consider first-time customer discounts, referral programs, or seasonal specials to encourage repeat business.
- Encourage customer reviews: Positive Google and Yelp reviews help build trust and credibility. Offer a small incentive, like a discount on the next service, for customers who leave a review.
- Partner with local businesses: Establish relationships with taxi companies, car dealerships, or insurance agents who can refer customers to your shop.
- Leverage email marketing: Collect emails from customers and send out regular newsletters with maintenance tips, exclusive deals, and service reminders.
- Get involved in the community: Sponsor local events, attend car shows, or offer free vehicle check-ups to create brand awareness and trust.
Final thoughts
Opening an auto repair shop in Ontario takes effort, but with the right planning, it can be a rewarding business. Focus on providing excellent service, getting the right licenses, and marketing your shop effectively. Before you know it, you’ll be the proud owner of a successful auto repair business!
Want to streamline operations from day one? Check out AutoLeap—our software helps auto repair shops run smoothly with scheduling, invoicing, and more.
