How to Start a Dent Repair Business

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Quick Reference

Do you have experience doing vehicle bodywork?  If you’re tired of working for someone else and have dent repair skills, a dent repair business may be a great option for you.   You can utilize your skills and make a good living as your own boss.

Business Overview

A paintless dent removal business repairs dents on vehicles and sometimes other metal items like appliances out of a repair shop or as a mobile service.  Paintless dent repair is very popular because it is inexpensive.

Industry Summary

According to Global Market Insights, the automotive collision repair industry was a $304.9 billion market in 2019 and projected to grow 3.3% per year through 2026.  Increasing traffic and the greater potential for collisions has driven the growth.   The industry is sensitive to economic fluctuations because dent repairs are not a necessary expense, as opposed to mechanical repairs.

 

Industry Trends

Paintless dent repair is very popular because it is inexpensive and effective.  It is used for minor dents where the paint itself has not been damaged from things like hail or door dents.  The industry, in general, will always see demand because vehicle dents are extremely common, caused by a variety of factors, not just collisions.

Target Market

Your target market will be anyone with a motor vehicle, particularly those with disposable income.  Lower-income or owners of older vehicles may be more likely to live with minor dents to avoid the expense of repairs.

Additionally, car dealerships, rental agencies, and company fleets are common accounts for dent repair businesses as well.

Skills, Experience, and Education Useful in Running a Dent Repair Business

There are several specific skills that you will need to open a dent repair business.

  • Experience.  Experience is critical in a dent repair business.  You need to have the right skills to do quality repair work.  You don’t necessarily need to be a certified auto body technician, but it would add to your credibility with customers.
  • Business knowledge and experience.  You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • Customer service. You’ll need to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.

Costs to Start a Dent Repair Business

Here are the typical costs you will face when you open a dent repair business.

  • Setting up a business name and corporation costs approximately $200.
  • Business cards, brochures, postcards for marketing $200 – $300
  • Website setup $100 –$200 for a basic, do it yourself website, $1000 – $2000 for a professional site
  • Dent repair tools $1000
  • A vehicle for a mobile service $10,000 +
  • Shop space $1500 – $3000 per month
  • Liability insurance, worker’s comp, property-casualty insurance $600 – 1,000
  • Initial marketing such as Facebook ads or search engine optimization for your website, flyers, and postcards, $500 -$1000

Steps to Starting a Dent Repair Business

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your dent repair business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

Related:
How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect dent repair business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

Since a dent repair business typically performs the service at the customer’s location, a mobile service can operate out of the home, saving on rent costs.  If you have a shop, consider being located in a convenient location with high visibility.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

While there aren’t specific licensing requirements for a dent removal business, some general local, state, and federal registrations a dent repair business may need includes a sales tax permit and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Outside of a company vehicle, a large investment isn’t necessary for this business. If a loan is needed, the borrower(s) will need to have good credit and invest 15-25% of their money towards the total start-up costs.  Some entrepreneurs use their own funds, a home equity loan, or credit cards, but you are putting your funds at risk and will have payments that may or may not be more than those of a business loan.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A dent repair business will need to set aside a budget to cover promotion costs on a continuous basis. Common marketing techniques for a dent repair business include social media marketing and online advertising, as well as flyers and postcard mailers.  Developing a website can be a significant expense, but it can also give your dent repair business greater visibility online.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A paintless dent repair business needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.  This may be expensive due to the potential for injuries.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You may choose to hire PDR techs to help you run your dent repair business, particularly if you build a large customer base.  Technicians are typically paid a base salary and commission.

In addition to wages, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your dent repair business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a Dent repair Business?

Prices for dent repair can vary greatly depending on the size of the dent.  A mobile service has a much higher profit margin than a shop.  You could make anywhere from $25,000 – $100,000 or much more if you’re very successful.

Things to Consider Before Starting a Dent Repair Business

Running a dent repair business or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Marketing and acquiring clients will be your biggest challenge and an ongoing expense.  It will take some time to get enough clients to cover your marketing costs.

Peak demand is typically during hail season, which runs between April and September in most areas.  While living on the road can be tough, a mobile dent repair business chasing hail storms can be very profitable.

You will face a lot of competition, so you will have to do quality work, get referrals, and continuously work to get new clients.  You need to create awareness of your business,charge competitive prices, and keep your customers happy.  Paintless dent repair will be a critical part of your business because of its popularity.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other dent repair businesses to see what they offer and what prices they charge.

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