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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Automotive Repair Shop SWOT Analysis

 

Strengths

 

Very few people now have the ability to repair their own automobiles. As such, they turn to professional automotive repair shops to have their cars and trucks serviced. Many cars now have complex onboard computers, and the days of an individual fixing their own vehicle in their garage are almost done (except for dedicated hobbyists). The demand for automotive repairs remains strong in any economic climate. Additionally, many people that drive older vehicles have a strong demand for these services on an ongoing basis. The barriers to entry for starting a new automotive repair shop are moderate as startup costs usually range from $50,000 to $250,000 depending on the scope and scale of the location. The gross margins generated from automotive mechanic services are very high as it this is a labor focused business.

 

Weaknesses

 

Competitive issues are generally the biggest weakness faced by automotive repair shops. The other issue faced by these businesses is the continued need to integrate new technology into the operations of these businesses. This is due to the fact that most new vehicles have extensive amounts of computer technology onboard. It is imperative that staff mechanics also receiving ongoing training and education in order to properly service these vehicles. The operating costs, especially payroll, are generally high for automotive and vehicle repair shops.

 

Opportunities

 

For most entrepreneurs in the automotive repair industry, the primary opportunity for growth comes from the ongoing development of new locations. Once established, banks and financial institutions love to provide these companies with large amounts of capital in order to expand their businesses. This is primarily attributed to the large tangible asset base of an automotive repair shop coupled with the highly predictable and economically secure nature of their revenues.

 

Threats

 

Beyond competitive issues, the primary threat faced by automotive repair shops are technological issues. This is because, as cars become more complicated, the demand for competent mechanical services increases. As stated earlier, it will be imperative for an automotive repair shop to continue to invest in technology and continuing education for its staff. Many new vehicle dealers have entered the repair markets.


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