As the owner of a successful auto customization business in Memphis, I consider myself to be extremely lucky.  I’ve got a great bunch of people working for me, my business is expanding, and our business has a stellar reputation in the area.

While it may seem like roses and sunshine now, it wasn’t all that easy getting here.  In fact, in my 25 years of figuring out the auto business, I’ve managed to #1) Go bankrupt – twice  #2) Shutter 4 businesses and… #3)  Hire and fire over 50 people!

While you may argue my business acumen, one thing is for sure:  I’ve earned my stripes.

Sure, starting a custom car shop can be lucrative, fun-filled, and an ideal outlet for those with a passion for vehicles, but always remember:  it’s still hard work!

With 25 years in the rear-view, I wanted to share my thoughts about what it takes to start a custom car shop, the right way…

How Committed Are You?

As with anything in life, but especially so in the automotive business, passion will take you a long way.  If your passion is STRONG enough, it can get you over the inevitable highs and lows that come with running a business.

Going bankrupt and making mistakes sucks, but if you’re really committed to the craft, you will be able to pick yourself up when things go wrong, learn from your mistakes and move forward.

Customization Businesses Cost $$

Running a successful customization business requires the tools of the trade, and the tools ain’t cheap.  Be prepared to spend at least $50,000 to get going and a few years to reinvest.  About 10% is going to go into rental space and utilities while the rest will be for equipment.

Buying new equipment can be expensive, so keep your eyes and ears peeled for auctions on businesses that have gone defunct.  Craigslist is a great place to start, but you’d be surprised at the number of auto shop auctions that come up in most major cities in the US.

While not comprehensive, here’s a list of the equipment we recommend to get you started on the right foot…

1) Refrigerated Evaporating System
2) Rebuilding Counters
3) HVLP Guns
4) Jitter Bugs/Sanders
5) Cabinets
6) Air Compressor
7) Electrical Tools
8) Parts Washer
9) Woodworking Tools
10) Diagnostic Machine
11) Air Tools
12) Lift

Get Legal

Yes, you want to account for the legal side of things in your state.

This can include how you are going to set up the custom car shop and how it will be registered federally. The moment you don’t do this is when you are taking a risk and that is not the kind of setup you want to have!

This should be thought of as soon as the planning process begins because it is the only way to stay on the right side of the law. The moment you take a risk is when you will end up paying the price and that is not worth it at all.

Business Accounting

Along with the law, you also want to think about the financial side of things because that’s just as important. The idea is to mull over who is going to take care of the funds, where the financial details will be recorded, and how you are going to pay taxes.

You may be the expert in sheetmetal, but that doesn’t necessarily make you a great accountant.

All of these details come into play and you should be setting up a business bank account as soon as possible while thinking about this. The financial side of your custom car shop is essential and the heartbeat of your setup.

Insurance

A lot of business owners think they can get away without insurance but that is a risk no one should be taking. It is best to have insurance in place so you are not dealing with unnecessary costs that cannot be managed.

Imagine having to deal with an accident in the shop and then not having the funds to manage it. This is an emergency that can happen to anyone even if you are super careful. Think of it is as a simple safety net and you should take your time to find a good coverage option that will account for your shop’s needs.

Branding

As soon as you have taken the time to focus on the groundwork, it will be time to move towards what the customers will see. The first thing they will notice is the branding and that is the impression you want to get spot on as soon as you are ready.

Look at some of the finest custom car shops and other related businesses to pinpoint what works. The target market is specific about where it goes and that has a lot to do with your branding. It should fit the niche and it should look professional.

Get Online

In this day and age, a business isn’t going to last long if it doesn’t have an online presence.

The market is hard on those that don’t think it is important to have a good website because too many people interact with their smartphones/tablets/laptops. If you are not the one that shows up with a good website, they will ignore you and it won’t be pretty.

You want to make sure you are establishing a website that is easy to manage, fast, and offers a boatload of quality information to those who are interested in bringing their car to the shop.

Marketing Your Auto Business

As soon as you have laid down the groundwork and are sure about the tools that are in place, you can work on the marketing setup. Now there are multiple ways of cracking this and a custom car shop has to be aware of them. One of the modern solutions is Internet marketing (SEO, Social Media) and it is important to dabble in this as soon as possible. If not, you can hire an SEO agency to take care of it because most people do head online when they look for custom car shops.

These are the steps on how to set up a custom car shop and make sure you build something that is credible. People that are going to be in this target market don’t want to deal with someone that is unprofessional or doesn’t look the part. They only want someone that is experienced to come anywhere near their car as it is a major asset for them. To make sure you are setting the right trend, it’s time to think about these details and then move forward. These are the fundamentals that matter a lot.