While for some this may not sound like the most lucrative of business opportunities, entrepreneur mechanics and self-employed mechanics often stand to make a small fortune. First of all, auto repair produces a great income, it has a limited cash outlay, a positive competitive landscape and a lower than average purchase price. However, one deciding to tread down this road needs to ask themselves one important question — is it better to start a business of your own or buy a franchise? With that in mind, here are several reasons why franchising is a great option for mechanics.
A ready-made business model
As a mechanic, chances are that you’ll want to jump into the business right away. After all, you have the skills, have all the tools and have the will to start making a name for yourself. However, running a mechanic shop is not the same thing as being a mechanic. This also requires you to be a businessman, and one of the toughest requirements here is to develop your own business model. By buying a franchise, you get a ready-made business model and have the privilege of jumping into the business world right away.
The vast majority of franchisors offer at least some degree of training in order to secure the success of the franchise in question. Sure, this is not free training, due to the fact that this service (as well as all other benefits that you get from your franchisor) is included in the price. Nonetheless, when you try to compare the price of training (which, honestly, may be a tad harder to figure out as a stand-alone), you’ll see just how cost-effective it is. We’re of course naming a scenario in which you’re comparing this service to various courses (both entrepreneurial and mechanical).
Joining a thriving business
When starting a business of your own, you’re virtually tossing a coin in order to see whether it’ll be lucrative or not. When buying a franchise, however, what you’re essentially doing is — joining the winning team. Sure, just because every other franchise out there is making money, this doesn’t necessarily mean that you’re going to do so, as well. On the other hand, franchises do have a somewhat higher success rate, which is a factor that you definitely need to consider.
All the support you can get
Previously, we’ve discussed the issue of business models and training that you’re bound to receive from your franchisor, but this is far from all the help that you’ll get. You see, unlike in the scenario with the startup where you’re on your own and no one (other than your employees, friends and family) cares if you succeed or fail, your franchisor has direct benefits from your success. This makes them motivated to provide help. It’s even possible to find a prestigious mechanic business for sale that is willing to offer a 2-year income guarantee for the business system that they’re selling.
Obtaining financing becomes somewhat easier
In one of the previous sections, we’ve mentioned that franchises, in general, have a higher survival rate, which is something that banks, credit unions and independent lenders are aware of, as well. What this also means is that getting a business loan suddenly becomes much easier. It gets even better, seeing as how there are some franchises that are willing to offer in-house financing. For a mechanic business, this can be game-changing, seeing as how there are so many expenses to cover. A good set of tools alone costs around $15,000, while the average insurance is somewhere in the $4,000 range.
Getting your own turf
Lastly, if you do decide to start your own business, you risk someone else in your vicinity buying the franchise that you previously had an interest in. Now think about this fictional scenario and consider the odds of your business to triumph against such a powerful brand. If you buy a franchise, you also get a guarantee that you’ll be the only franchise in that area, which is an important reassurance. Also, if a franchise belonging to another brand opens up in your neighborhood, you’ll stand much better odds against them. All in all, you get to provide yourself with a substantial competitive edge.
Sure, franchising has a couple of downsides, as well. First of all, you’re not as independent seeing as how you still have to follow certain rules set by the franchisor, and doing otherwise may make the franchisor refuse to prolong your contract. Still, this seldom ever happens. In other words, this is only something that poses a problem in theory, while in practice you’ll hardly even be able to tell a difference between owning a franchise and owning an independent business.