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How to Start a Small Engine Repair Business

Engine Repair Business

Do you want to start a small engine repair business? If YES, here is a complete guide to starting a small engine repair business with NO money and no experience plus a sample small engine repair business plan template.

We believe that a small engine repair shop is actually a very lucrative business. Looking around our homes, we can comfortably say that people are always in need of someone who can do repairs on the many tools they have at home. So if you are planning to start this kind of business, you should remember that small engine repair shops need not be created on such a large scale.

Have it in mind that you need only one experienced mechanic to start such enterprise, and you can either establish yourself as someone who repairs a wide range of engines or as a specialist. You might be surprised to know that a small engine repair shop is actually a very lucrative business that you can start easily.

To start this business, you do not really need a small engine repair service manual and whatnot to tell you that people are constantly in need someone who can do repairs on some of the tools they have at home. For example, our lawnmowers are always out of commission, our outdoor generators are always cranky, and that water pump we have regurgitates more air than actual water.

How many people have you actually seen trying to do lawn mower repair with their nose firmly attached to a small engine repair book or small engine repair guide, trying in vain to make sense of the diagrams and the instructions within?

There are of course, small engine repair courses that you can attend if you are not so well versed in this kind of thing, but experienced mechanics are more in demand and they are really hard to come by. Do not be discouraged if you are not that great a mechanic, you can equally hire an expert mechanic or two to perform the services for you.

It is very important that you understand that there are a wide range of products that you, as an entrepreneur can engage in – ATV engines, chainsaws, dirt bike engines, go cart engines, jet ski motors, lawnmowers, leaf blowers, marine vessel engines (i.e. small boats,) mini bike engines, motorcycle engines, outdoor generators, portable heaters, pressure washers, snow mobile engines, snow throwers, tillers, trimmers water pumps and a host of others.

Probably you get to do a lot of minor repairs, but if you can do home services as well, you can even garner more customers. This means that your mechanic should have exposure to a wide range of small motors, engines, makes and models – and the most important element of all, your mechanic should be ready for all the possible repair scenarios.

Steps to Starting a Small Engine Repair Business

1. Understand the Industry

Industry report has it that there were more than 70,000 small engine mechanics with the prediction that this number will increase to more than 75,000 by 2018.

Small engine repair mechanics in Texas alone which numbered about 1,620, made an average of $31,240 in the repair of outdoor equipment. It is also stated that the industry has an annual revenue of $7 billion with a growth that was pegged at 4.1%.

The success in the industry is due to the fact that there has been an improvement in the economy which has led to more spending by customers.

Industry revenue rose between the periods of 2011 and 2016 due to the fact that consumer confidence increased because of an improvement in disposable income and allowed households to increase their spending on stuffs such as lawn and garden tools and also carry out repairs on them.

Experts believe that within the next five years, that the industry will be looking better especially as there will be an increase in consumer confidence that will arise from increasing disposable income which portends good news for industry operators.

It is important to state that the industry has low concentration, is highly fragmented and there are few or no companies controlling a huge share of the market especially as businesses solely concentrated on the regions where they were located and seem to have a higher share in their regions than outside it.

Research has shown that the industry has been booming for business because a majority of American households have one or two power equipment they use especially as the lawns need to be mowed, snow needs to be shoveled and other activities that need to be done regardless of the economy.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic compositions of individuals who need the services of a small engine mechanic are so huge that one wouldn’t know where to start classifying them. Advent in technology has made the use of home equipment and small engine machines in our society something very common.

A lot of our daily activities are centred around these small machines. We all know that almost every family in the United States owns at least one equipment such as:

Lawnmower, water pump and all other kinds of pumps, garden tillers, chainsaws, portable heaters, outdoor generators, go-carts, snowmobiles, forklifts, ATVs, motorcycles, pressure washers, marine vessel engines, jet ski motors, refrigerated trailers on reefer trucks and other such equipment which might go cranky once in a while and would then require a specialist to look into and fix it.

3. Decide Which Niche to Concentrate On

There are individuals who will attempt to do their own engine repairs (often with limited success). But most will seek out a local lawn and garden dealer who does repair work or the local guy who runs a small engine repair business out of his garage or basement.

We believe that clients who typically patronize these types of businesses are usually looking for the least expensive repair – which is often a patch job rather than a complete overhaul.

This brings us to the point where the best opportunities are to be found where the money is. As the cost of the machine that is powered by a small engine goes up, so does the likelihood that the owner will spend money on engine repairs if the engine fails or develops a serious problem.

The motor in a lawn and garden tractor, snowmobile, ATV, motorcycle or personal watercraft is usually worth repairing because the cost of the engine work is much less than what it would cost to replace what the engine powers. A new ATV or motorcycle can cost thousands of dollars versus hundreds of dollars to repair or rebuild the original engine.

In this business, note that you can be a general repairer or you can choose to be a specialist and focus on a particular industry. Niches in this industry may include;

  • Powersports industry
  • Industrial and Agricultural Market
  • Television repairs
  • Phone repairs
  • Home small engine repairs
The Level of Competition in the Industry

In this business, you are competing against backyard DIYers, local powersports and watercraft dealers, small engine repair shops and remanufactured engines from various sources (both local and online). A lot of your local competitors are really nothing more than parts swappers or engine swappers. They can take engines apart and replace worn or damaged parts with new parts, or they can replace the original engine with an engine that has been sourced elsewhere. Note that many mechanics cannot recondition your machine parts because they don’t have the equipment for doing that kind of work.

Indeed they might be able to manually hone a cylinder or drill grind the valve seats, but that’s about it. They can’t bore a cylinder to oversize. We believe they can’t precision hone or plateau hone a cylinder bore. They can’t do a multi-angle valve job or machine a head to accept oversized valves and seats.

They can’t re-machine or repair a damaged engine case or recondition a worn connecting rod or crankshaft. They can’t balance an engine. They probably lack the proper equipment for crack detection or repairs. This is why we believe there are ample opportunities for a full service machine shop that can do all of these things, either for other small engine repair businesses or for the engine owners themselves.

4. Know Your Major Competitors in the Industry

We cannot deny that people are in constant need of the service of small engine repairers. We believe that these small engines are constantly used and in the process they develop one fault or the other. As a focused entrepreneur, you can start making money as a small engine repairer by simply learning the trade. A lot of small engine repair specialists charge as much as $250 to $500 to repair a small engine depending on the fault the engine has.

All you need is determination and zeal to work hard. For you to effectively offer the engine repair services, you will need to open a shop where people can bring their small engines to and pick it up after repairs. Also note that you can make money from focusing on repairs of spoilt small engines.

Some of the machines that fall into the category of small engine include; Cart engines, Water pump, Mini bikes, Lawn mowers, Gas trimmers, Outboard motors, Portable heaters, leaf blowers, Chain saw and many others. But still note that no major companies dominate the industry.

Economic Analysis

In this industry, mechanically inclined entrepreneurs have the opportunity to make fantastic full or part-time cash repairing outdoor power equipment and small engines, right from a fully equipped home based workshop, or from a small commercial storefront.

Note that even if you do not have previous small-engine repair experience, there are numerous schools offering in-class and correspondence small-engine repair training. Without looking too far, the list of equipment you can repair is almost unlimited: lawn mowers, outboard motors, gas trimmers, lawn tractors, snowmobiles, snow blowers, leaf blowers, and chainsaws are only a tip of the iceberg.

Also note that there are additional revenue sources as well. First and foremost, you need to establish a certified-warranty repair depot for outdoor power-equipment manufacturers. While the second is to buy second hand outdoor power equipment in need of repairs at dirt-cheap prices, fix it, and sell it for a profit right from your shop.

Also the third additional revenue source is to rent outdoor power equipment and tools to local homeowners and contractors. Combine the three with the repair side of the business and you can easily generate in excess of $100,000 per year in sales.

5. Decide Whether to Buy a Franchise or Start from Scratch

It is believed that a lot of inexperienced small engine repair business entrepreneurs approach ownership with the mistaken idea that starting from the scratch is their only option when they can also pursue a business franchise. Unless you have compelling reasons to start from the scratch, buying an existing small engine repair business may be the better choice.

An acquired small engine repair business is a known entity; starting from the scratch is less certain because its forecast depends on estimated outcomes. In the best case scenario, you will be able to locate a turnkey operation with proven profitability and a well-oiled Business model.

We believe that your chances of achieving the entrepreneurial goal of being a successful business owner immediately improve when you join the ranks of franchisees rather than going it alone. Have it in mind that if your goal is to start a small engine repair business, you should assess whether there are good franchise opportunities available that might make your life much easier.

6. Know the Possible Threats and Challenges You Will Face

No matter how you look at it, no business idea looks simple; it takes courage and competence to be able to survive. Every business has its own challenges but what makes you an outstanding entrepreneur is your ability to survive and build your business. Possible threats of starting this business may include;

  • Deciding whether to be a specialist or a general repairer
  • Capital and financing your business
  • Finding costumers
  • Dealing with the stress of not having a steady pay check
  • Managing your money, legal protection and taxes
  • Dealing with negative people, loneliness and self-doubt
  • Building a reputation
  • Fighting competition
  • Hiring employees

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

There are four legal structures in the business world; sole proprietorship, partnership, Limited Liability Company (LLC), or a corporation. Each legal entity available in the business world has its own advantages and disadvantages, but you need to carefully examine your options before choosing a legal entity.

When starting a small engine repair business, the LLC is your best legal entity. An LLC is a “pass through” tax entity. This simply means that the LLC itself does not pay tax, you pay tax on the profits you receive. The trick to reducing your tax liability is two-fold: start an LLC but tax it as an S-Corporation.

Then you pay yourself a small but reasonable monthly salary and once per quarter you can take out a chunk of the profits as distribution. Note that you will pay a standard tax on your monthly salary but the quarterly S-Corporation distribution is not looked at as employee wages so you will not have to pay social security or Medicare tax on this distribution amount.

8. Choose a Catchy Business Name

  • Advance engine repair
  • Affordable repair
  • Engine Stop
  • Soft repairs
  • Red Ridge
  • Cascades machines
  • Forefront engines
  • Colonial Auto Centre
  • Everyday Repair
  • Machine experts
  • GIC engine room
  • One time touch
  • Integrity First repairs
  • New Town Automotive
  • Eastwood Service
  • Clean Imports
  • Professional engine services
  • RC Automotive
  • Cool Pro engine Service
  • Skyline repair
  • The Craig shop
  • Kathy engines
  • Suburban engine room
  • Engine Doc

9. Discuss with an Agent to Know the Best Insurance Policies for You

You should be aware of the enormous risk in this business. Just a single mistake in your work and you might completely ruin your clients’ engine– and that could quickly escalate into a lawsuit against your business. Also if the machines are further damaged while in your care, you could be liable for those costs as well. So insurance is needed in this business to protect your business from the high cost of liability lawsuits, property damage and cyber risks, you need a business protection plan that accounts for the nuances in your daily operations.

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

A lot of reports have stated that Intellectual Property theft is committed by half of all employees and competitors. A lot of employees in the repair business routinely transfer company data to the cloud through personal emails and on to their flash drives, as part of the day to day execution of their jobs, and then they never clean the data off their systems.

What is more significant, most employees, despite their non-disclosure agreements, believe that the creative work performed on behalf of their employers remains their own. Note that intellectual property protection is very well needed in the small engine repair business in form of patents protection, trademark and copyright protection, technical data and small engine software protection.

In order not to lose your hard work and time, you have to implement and reinforce non-disclosure agreements, use forensic techniques to monitor your network, maintain privacy and security through key word phrases, and develop a solid relationship with a digital forensics investigator.

We also advice that you should avoid reallocating equipment or information without making a forensic copy, discard the forensic image for at least six months, not allow your workers use personal flash drives, never underestimate the determination of a thief, and always try to do things yourself.

11. Get the Necessary Professional Certification

Small engines power motorcycles, ATVs, chain saws, lawn mowers, weed eaters and outboard motors, and when they malfunction they must be tested, serviced and repaired. Since many people own these types of machines, demand for technicians with small engine repair skills is continuous.

Small engines now are highly advanced and require a great deal of technical knowledge to work on. When you receive a Small Engine Repair Certification, you will be qualified to work on all types of small engines. These certification programs may include;

  • Associate of Applied Science in Marine and Small Engine Technology
  • Associate in Applied Science in Powersports and Small Engine Repair
  • Technical Certificate in Marine and Small Engine Repair
  • Small Engine Repair Certification
  • Small Engine Technician Certification
  • Certified 4-Stroke Engine Technician

12. Get the Necessary Legal Documents You Need to Operate

Knowing and getting the necessary licenses and permits you need for your small engine repair business can be very stressful. Any of the documents need your time, energy and paperwork for you to be able to obtain the proper registrations.

But as stressful as it might be, don’t risk your business shutting down before it fully begins. Starting your business without the proper licensing is a criminal offense in some states, while others hand out hefty fines. Here are some legal documents needed for a Small Engine Repair business.

  • Business license
  • Insurance
  • VAT registration
  • Employment agreement
  • Federal tax identification number

13. Raise the Needed Startup Capital

Not just this business but every business needs fund to be able to stand firm and grow. There is a popular saying that “money is used to make money”, any business that lacks funding is literally dead and doesn’t exist. We believe that one of the huge problems faced by entrepreneurs is not choosing a business niche but the capital and funding for the business.

Note that you need fund to be able start up a small engine repair business, buy tools, rent an office, pay for utilities, pay employees, and also build a corporate identity. Here are ways to source for business fund;

  • Personal savings
  • Loans from friends and family
  • Small business loan
  • Partnership
  • Attract investors
  • Crowdfunding
  • Bank overdrafts
  • Community schemes

14. Choose a Suitable Location for your Business

Deciding on a business location for your small engine repair business should be one of your paramount decisions when starting the business. This is because the location you choose for your small engine repair business has a direct effect on your operation’s costs as well as your ability to serve customers.  Also, location decisions, once made, are difficult and costly to undo.

Have it mind that an excellent location for your small engine repair business should be a well-travelled street where the shop will be seen by many individuals who can easily pull into the lot and patronize your services. So, you have to consider whether your location can benefit your business, and if you are around similar businesses that are already drawing the type of customers that you want. Like starting your repair shop beside a shop that sells small engine accessories.

It is also very important that you go for a location where you can easily afford its rent. Also have it in mind that the location that you choose needs to be legally acceptable for whatever you plan to do there. There is a possibility for a spot to be good for business, but if it is not zoned for what you plan to do, then you are asking for trouble.

We advise that you should never sign a lease without being sure you will be permitted to operate your business in that space. Note that your city planning or zoning board determines what activities are permissible in a given location.

15. Hire Employees for your Technical and Manpower Needs

One of the obvious differences between building automotive engines and small engines is the smaller physical size of the components. The cylinder head and bore finishing equipment and fixturing you currently have may be too large or unsuitable for working on small engines.

A lot of small engines also need special tools for disassembling and reassembling. Special tools may also be required for governor adjustments, valve adjustments or other tasks. Special tools that may be needed for small engine work may include any of the following:

  • Special tools for valve work including a small valve spring compressor, valve seat puller, valve guide remover/driver, valve seat cutters (various sizes), small valve guide reamers (various sizes), and valve guide adjuster tools.
  • Special tools for camshaft work including cam bearing plug gauges (various sizes) for checking wear and clearances, a camshaft bearing puller, camshaft bearing driver, small flywheel puller and flywheel holder, and magneto bearing puller/installer.
  • Special tools for engine bearing work such as main bearing drivers and reamers (various sizes), roll pin drivers, main bearing plug gauges (various sizes), and oil seal driver (various sizes).
  • Special tools for small engine pistons and rings like a ring compressor and expander that can handle small pistons and rings, a piston pin fixture for removing and installing wrist pins, and a bore dial gauge set that will fit inside small cylinders.
  • Other specialty tools you may find necessary or handy might include a governor spring adjustment gauge (such as the one that is recommended for adjusting the secondary governor spring on Briggs & Stratton V-Twin Vanguard engines, and M29, M30, M35, M38 engines for generator applications), and some type of mechanical or electronic tachometer for checking/ adjusting engine speed settings.

Also, to be successful in this business,  you will need access to OEM service information for these engines, including piston, ring and bearing clearances, valve specifications, torque values and similar data. We believe service manuals are available from the engine manufacturers and other sources and typically sell for around $30 to $40 per manual.

But the issue is that you will probably need a lot of different manuals because most small engine manufacturers produce a wide variety of engines. Also the VIN or ID plate, tag or decal on a small engine provides key information about the engine model, specifications and date of manufacturer.

Note that such details are essential for correctly identifying the engine application and for obtaining the correct replacement parts and service information. Have it in mind that this ID plate, tag or decal is often located on or under the engine shroud on small air-cooled engines, or somewhere on the engine block or cylinder head.

If the tag or shroud is missing, it can make the identification process very challenging. Note that accurately identifying an engine is important not only for replacement parts, but also for ignition parts such as spark plugs (which must be the correct heat range and gapped to the correct clearances for the engine to run properly).

The Service Delivery Process of the Business

Indeed small engines can be found everywhere. They power lawn mowers, garden tillers, portable generators, all kinds of pumps, go-carts, ATVs, snowmobiles, motorcycles, forklifts, even refrigerated trailers on reefer trucks. Most of these engines are single-cylinder four-stroke air-cooled motors that range in power from 5 to 15 hp or more. A lot of them have vertical crankshafts and some have horizontal crankshafts.

There are also V-twins, three-cylinder and four-cylinder small displacement engines, some capable of producing up to 75 hp or more. Many of these are four-strokes, some are two-strokes and some run on diesel, propane or natural gas. In this business, your daily activities will centre on the following;

  • Attending workshops and participating in webinars to stay on the cutting edge of new technology
  • Testing small engines with diagnostic tools to determine which parts require replacement
  • Changing engines and testing them
  • Attending to your customers

16. Write a Marketing Plan Packed with ideas & Strategies

We believe the very first step in successfully promoting your business is thoroughly researching the local competition. Note that this research will enable you to create the right business logo and offer specialized services that aren’t offered elsewhere. While the second step in promoting and marketing a new small engine repair business is creating opportunities to demonstrate your superior knowledge and skills to the local community.

Also note that the lack of marketing experience can sometimes be overcome through persistence and innovation, the two key features of small engines repair business marketing success. Things you should note for you to successfully market your business may include;

  • Competitive Awareness

In the business world, competitive awareness is the starting point for creativity in marketing. There is nothing wrong with creativity, but if it precludes your messaging from being represented alongside other small engines repair businesses, it could be a sign that you are out of touch with the marketplace. Sometimes you might be convinced that a new strategy will give your company an edge, we recommend you consult with a professional marketer before you leverage on that strategy.

  • Using Marketing Collateral

Have it in mind that brochures, business cards, folders, direct mail pieces, and other types of promotional materials are called marketing collateral. For small engines repair businesses, we advise that you make sure every piece of marketing collateral reinforces your brand and value proposition. Note for you to squeeze the most impact from your collateral; it needs to be targeted toward its recipients.

When it is delivered to the wrong person, a valuable piece of collateral will collect dust. Because collateral distributed through direct mail channels realizes its highest return when it is combined with an updated mailing list from a top mailing list vendor.

  • Leveraging on Newsletters

Even with the unrelenting demands of generating content on a monthly or quarterly basis, a company newsletter has promising potentials as a marketing device. We believe that blatant marketing messages aren’t appropriate in newsletters because they don’t communicate informational value to your customers. Make sure that your newsletter contains industry news, product use tips, and other contents that capture your customers’ attention.

17. Develop Iron-clad Competitive Strategies to Help You Win

The best plan to win your competitors in this business should be plans that increase your referral business through word of mouth. Note that you can spend money on TV ads, SEO and PPC campaigns, and even direct mail, but you are investing a small fortune on marketing channels that don’t grow your word-of-mouth business.

In this business, you need to invest in low-cost marketing ideas that target past and present customers. Keep your business in their minds, and you will increase your new customer referrals. Other ways may include;

  • Show them the money
  • Diversify your income
  • Make it look easy
  • Know Your engines and parts
  • Offer Referral Credits
  • Be a thought leader in your industry

18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Indeed top quality work is a must for building a good reputation – especially in the powersports and industrial small engine markets. We believe that individuals will spend serious money on a highly modified Briggs & Stratton engine for a go-cart or a Junior Dragster if you can deliver reliable, race-winning engines.

Building a solid reputation takes time, so don’t expect customers to come flocking to your door after you have produced one or two engines. But as long are you are doing top quality work and your customers are happy, word will get around and you will start to build your small engine customer base.

Also note that the powersports market needs specialized expertise and experience. Know that it takes time to figure out what works and what doesn’t if you are new to this niche. But you can copy what others are already doing, or you can develop your own tricks and techniques that give your engines an edge over the competition.

We believe that much of the know-how that goes into building performance automotive engines translates directly into building small powersports engines – things like porting, valve and seat modifications, flow bench testing, balancing, etc. Then if all of your experience has been with large displacement four-stroke engines and start doing small engines or two-stroke performance work, there’s going to be a learning curve before you can reach the top of your game.