How to Start Automobile Spare Parts Business
“No matter how good a driver you are, you have to have a good car and the right team behind you, in order to succeed”. While this quote is true for life in general, taking it literally, a good driver along with a good car, requires a great team behind it, thus alluding to a spare part and repair shop business for the automotives.
An auto spare parts retail store along with a workshop allows customers to buy the parts and fix it from the same workshop. Given the large number of vehicles the country has, approximately 253 million were accounted for in 2017, there is a good scope of starting the spare parts business and succeeding in it too.
The prospect of starting an automobile spare parts business is rewarding, considering that India ranked at the fourth position in 2017 in the automotive industry, and more the number of vehicles, equal the number of servicing required and need for spare parts over the years.
However, in order to learn how to start automobile spare parts business, entrepreneurs need to have a concrete plan in place. Planning helps the entrepreneurs consider all aspects of the business and have a meticulously drafted action plan to refer to, thus ensuring that all aspects of the business are considered, and the goals are achieved.
Business planning is a vital step for every business as it ensures that the business starts on a positive note without any glitches. Entrepreneurs can always get business planning and idea validation service to ensure that their business idea is viable and feasible and the service can further assist them to plan and start the business successfully.
How to Start Automobile Spare Parts Business
Decide The Type Of Spare Parts Business
An automobile spare parts business further has various categories. The entrepreneurs therefore need to decide on the exact type of business they want to venture into. Some of the types are elaborated here.
- Only selling spares parts
- This kind of business operates from a shop where the entrepreneur carries out either retail or wholesale selling of automobile spare parts.
- This business can be further specialised by dealing in only car spare parts or heavy vehicle spare parts such as trucks and buses, or only dealing in auto rickshaw spare parts. This helps create a niche business sector.
- Workshop Along With Retail Store
- This includes a shop selling spare parts along with a workshop where the vehicles can be repaired.
- The business can operate as a one shop stop for all the needs of an automotive.
- This type of business will require a spacious premises for taking in the vehicles for repair along with skilled staff to carry out the repairs and servicing.
- Online Shop
- This kind of automobile spare parts business does not require a physical location and can be completely operated via an e-store.
- The entrepreneur can provide spare part solutions to a number of vehicles via a website and provide delivery of the items.
- Entrepreneurs can even provide spare parts of antique cars which are not easily available and/or of luxury cars and vehicles such as Recreational Vehicles (RV), high end cars, etc.
- In this type of business, the entrepreneur selects a franchise model and stocks automobile spare parts only of a particular company or of a selected brand.
- Alternatively, the shop can provide spare parts of a particular vehicle brand only, such as only Hyundai spare parts or only Tata motor vehicle spare parts.
- Only selling spares parts
Making The Business Plan
Once the business owners decide on the type of spare parts business they want to venture into, the next step in figuring out how to start an automobile spare parts business is to have an automobile business plan in place. The business plan will help the entrepreneurs list down the various important essential details related to the business that they must consider or attend to, if they haven’t done so previously.
Some of the basic details that business owners must consider to include in their automobile spare parts business plan can be-
Infographic – Headline – basic details that business owners must consider to include in their automobile spare parts business plan
- Deciding the location and area of the business
- Chalking down the objective of the business and the targeted market.
- Finalising the size of the business
And various other factors. All of these are included in the business plan under specific headings. The headings and structure of the business plan are elaborated here-
- The executive summary of the business is a brief writeup describing the spare parts business, what will the business deal in, what are the long term goals of the business (for instance- to expand, to diversify, to have shops in other cities, etc), how the goals will be achieved and the timeline in which they will be achieved.
- Business Description
- The business description is a more detailed write-up on entrepreneurs vision of xzs
- It will include information regarding the business entity registration (whether a sole proprietorship, a partnership, a company or even a limited liability partnership), stock purchase details, where will the business operate from, the model of operation, research and analysis carried out in order to operate the business, etc.
- An important aspect to be included here is the store location and area details.
- The automobile spare parts business must ideally be located in an industrial area or an urban development area where more number of vehicles ply and require spare parts.
- Management And Operations Description
- The details to be included in the management category of the automobile spare parts business plan include-
- Employee strength- how many employees will be appointed at the shop.
- Operational details- who will manage the shop along with roles and responsibilities of each of the employees.
- Marketing And Sales Plan
- This is vital for the growth and promotion of the business.
- The business plan needs to have a detailed report of the existing competition, the needs of the market, and how the entrepreneur will fulfill the gaps in the business.
- Along with the research the marketing strategy for the business also needs to be discussed in the business plan. It includes the methods to be employed to market and advertise the business.
- Marketing can be done via advertising in automobile magazines, related industries and companies.
- Financial Requirements Summary
- The business plan must also include a financial summary of the business. This can be divided into two parts-
- First is to make a rough estimate of all the expenses and expenditures required to start and operate the business, such as the shop rent, furnishing the shop, procuring the spare parts, salary of the employees, marketing costs, etc.
- The second part includes the ways in which the capital requirement will be fulfilled- loans from banks or non-banking financial companies.
These are just some of the essential elements that need to be mentioned in the automotive spare parts business plan to ensure that all the factors are accounted for. Entrepreneurs can Download Business Planning Checklist to ensure that all the elements are considered and included in the business plan to make a successful start to the business.
Other Essentials To Keep In Mind
Along with deciding the type of automobile spare parts business and creating a business plan, other details to keep in mind while learning how to start an auto parts business includes-
- Obtaining Business Registrations
Permits and registrations are vital for the automobile spare parts business to start on a legally abiding note. The permits required to start the business include-
- Shop Act Registration- A Shop Act is a must for retail establishments that are located within Municipal limits. This Act regulates the standard working conditions for establishments with employees and must be displayed within the shop premises too.
- GST Registration- Every business, including the automobile spare parts business, requires to adhere to the taxation law prevalent and pay their taxes timely. The GST is a uniform tax structure across the country that regulates the taxation structure and eases the process of paying taxes. This registration is also a must for the automobile spare parts business if it’s annual turnover exceeds the stipulated limit.
- Training The Staff
An automobile spare parts business requires knowledge about the various spare parts for different types of vehicles. Therefore, when starting the business, entrepreneurs need to hire staff with requisite knowledge about spare parts and train them too. This is especially needed when the spare parts business combines retail along with repair services.
- Emphasizing On Services
The automobile spare parts business is not a different or unique business idea but one that has tremendous scope given the continuously rising number of automobiles in the country. When an entrepreneur wonders how to start an automobile spare parts business and make it a success, they need to focus on their marketing and service. The business needs to emphasize on providing efficient and reliable service. They can even go a step further and provide services at the doorstep of the customers, or at their industrial site. Also free first servicing on purchase of spare parts or similar promotional services can be offered to build a customer base.
These comprise the majority of the aspects that entrepreneurs need to know and be aware of when getting to know how to start an automobile spare parts business. In case of any further queries or assistance required by the entrepreneurs on their automobile spare parts business venture journey, they can approach the experts at deAsra.