How to Fund Small Body Shop Business 2018: Tips for Women
As more and more people acquire vehicles to avoid the hassle of commute and make their daily lives as convenient and comfortable as possible, the body shop industry continues to grow. In fact, there has been a steady growth in the industry revenue since 2012.
While auto repair may seem like something only the gents can do, more and more women are rolling up their sleeves to do the tough job and many have proven that they can do the same (if not better) than most men in the auto repair industry.
To succeed in the body shop industry, you need to have good mechanic skills, from the basic ones like painting and glass repair to more complex ones like body collision repair. Apart from the technical skills, you also need to have knowledge on business administration, accounting, organization, logistics, repair estimation, people management, marketing, and other things needed to run a business.
Body Shop Startup Costs
This is the most challenging part of running a body shop. Of course, you will be investing on tools, equipment, and working space where you do the actual repairs. In addition to these, you also need to allocate funds for your employees’ salaries. According to payscale.com, wages of body shop employees range from $11.72 to $22.49 per hour. If you plan to hire a shop manager, that will be additional $32K to $89K annually. Depending on where you plan to launch your auto repair business, expect to shell out $100K to $150K to get shop up and running, according to BPlans.
Where to Get the Fund
Auto repair is among the businesses that usually require a heavy capital, regardless if you’re starting with a few basic services or going all out with major repairs and customizations. Fortunately, you need not break the bank to cover the costs. There are plenty of ways to fund your body shop.
Small Business Grants
Many grants are available for women starting or running a small business. Business grants are a great way to fund your business. Unlike a personal loan, a business grant is “free money”, you don’t have obligation to pay it back. However, it’s not always a guarantee that you will receive one. According to Chron, finding the right grant gives you the best chance of success. Take time to research through the economic development council in your area, and way before you start with the application process, make sure to review the grant's eligibility guidelines.
If you can’t find a grant where you qualify, the Small Business Administration (SBA) has plenty more resources to grow your business. SBA loans are guaranteed by the government. When you are backed by the government, lending companies will consider your business less risky and therefore they are most likely to qualify you for better lending packages. For qualified entrepreneurs, SBA loans provide a low-rate and long-term financing options.
More and more people are able to put up their own business, thanks to the increasing number of companies that offer flexible lending options outside traditional banks. Through alternative financing, entrepreneurs have wider options as to what financial resources they need, from term loans to auto title loans. They can shop for title loan even if they have a bad credit history. Alternative lenders also have a much higher loan approval rate than banks. However, they tend to have slightly higher interest rates.
Business Lines of Credit
Here’s another way to fund your body shop business. Unlike traditional business loans, a line of credit sits in your back pocket, just like a personal credit card. You only pay interests for the money you draw out of your credit line. Once paid, your credit line is refilled to its original amount.
A body shop can be an extremely lucrative opportunity for women like you who have the skills, passion, and determination to succeed and make their business grow. One of the biggest challenges however is where to get the capital. Fortunately, there are plenty of ways to fund your business, from applying a business grant to securing SBA loans, alternative funding, and business line of credit. Depending on where you qualify and what meets your business needs, each of these options gives you more flexibility to finance your business, compared to what traditional banks offer.