Do you want to start an appliance repair business? If YES, here is a complete guide to starting an appliance repair business with NO money and no experience.
Okay, so we have provided you an in-depth sample appliance repair business plan template. We also took it further by analyzing and drafting a sample appliance repair marketing plan backed up by actionable guerrilla marketing ideas for appliance repair companies. In this article, we will be considering all the requirements for starting an appliance repair business. So put on your entrepreneurial hat and let’s proceed.
Why Start an Appliance Repair Business?
If you have found yourself repairing little appliances in your apartment, for your friends, family members and neighbors, then it is high time you think of starting an appliance repair business. One thing with appliances is that anyone regardless of how much they earn can own one, and while some people do not mind replacing their faulty appliances with a new one, most people would prefer to repair their appliances in a bid to save money.
The appliance repair business is one that does not require any form of training or licensing to start, however if you will be working with refrigerants, then you will need to pass a test by the U.S Environmental Protection Agency (EPA).
Even though this is not a business that requires any sort of formal training before one can start it, having experience from either a vocational training or an apprentice program will help you have an edge over your competitors.
Another thing that you will require to stand out is getting certain certifications from reputable organizations such as the Professional Service Association (PSA) and the International Society Certified Electronics (ISCET). While these certifications are not regarded as compulsory, they help boost the confidence of your customers and allow them trust you with their appliances.
While this sort of business might be deemed very lucrative due to the fact that appliances in households and in businesses are on the increase, you should know that the business will require you to be fit as you will be engaged in heavy labor especially when lifting appliances that are heavy.
Asides from injuries that might be associated with lifting and repairing appliances, you should also be prepared for incidents such as gas leaks and electric shocks. This is why it is necessary for you to conduct a thorough survey into the business you are going into so as to know all what you will require.
One thing you cannot afford to overlook when starting your appliance repair business is to write a comprehensive business plan.
Starting an Appliance Repair Business – A Complete Guide
- Industry Overview
The market condition in the United States is said to be sluggish and this has caused a decline in real estate sales and this decline is expected to continue for a significant period of time. This of course will affect all those who have to buy appliances for their homes. In the United States, there are close to 9,000 appliance sale and repair service businesses.
All these businesses usually generate billions of dollars while also providing jobs for a large number of people. The annual growth revenue of the industry has been at par with population growth in the United States and is expected to continue that way for sometime.
The appliance repair industry in the United States generates $4 billion annually and has experienced a 1.6 percent growth between 2011 and 2016. There are close to 59,500 appliance repair businesses in the United States employing close to 72,000 people.
The close ratio means that most of the appliance repair businesses have one or two people working for them as only few are employing from 5 employees and above. The industry has a few dominant companies; however, these companies do not have a major share market as local and independent appliance repair businesses are holding sway in their various regions.
The majority of appliance repair companies in the United States not only provide repair services but they also help customers to install and maintain the various appliances they own either in the house or at the workplace. The majority of revenue in the industry comes from those that service household appliances.
Other revenue is generated from providing services for other appliances as well as selling merchandise. Manufacturers, dealers or retailers usually help push the growth of the industry by outsourcing repairs to appliance repair stores.
The period between 2006 and 2011 has been very rough on the industry, as the low entry barrier has increased competition, thereby forcing the industry to experience a decline in revenue. Asides from internal competition, external factors are also responsible for the sluggishness experienced in the industry.
However, it is expected that per capita disposable income will grow, which will allow consumers to be able to have more purchasing power and will therefore look to purchase new appliances rather than repair them.
The industry has also had to deal with negative pressure from the slump in real estate as well as the economic downturn experienced in the country. However, even though revenue in this industry has increased slightly between 2011 and 2016, the industry is still experiencing a decline as the slight increase is seen as temporary.
The home appliance industry is divided into two categories; the major domestic and the small domestic appliances. Sale of major appliances in 2016 was at $190 billion. These major appliances include freezers, stoves, refrigerators and washing machines.
The home appliance industry is already having a growing sub-market which is referred to as the smart appliance market. It is expected that by 2020, China will be the major market for smart appliances and will account for almost half the market globally at this period.
Starting an Appliance Repair Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those that require the services of an appliance repair company ranges from young adults to the middle aged and senior citizens. Also, executives, government workers and business people who own appliances will at one time or the other have their appliances break down and will need someone to repair them.
Therefore if you are looking to define the demographics for your appliance repair business, you should strive to make it all encompassing from those that earn low and the middle class, to those that earn high wages.
List of Niche ideas Within the Starting an Appliance Repair Business – A Complete Guide That You Can Specialize in
In a business setting, entrepreneurs looking to go into niche businesses are seeking for ways to stand out, get a certain segment of the target market and still generate revenue in a bid to maximize profit. In the appliance repair business, going into a niche or two would mean that you are able to focus on a particular area and offer specialized services to your customers.
If you are going to be starting your business on a small scale, then you might need to focus on just one or two niches; if however, you are going to employ people or run a medium or large scale business, then you can offer as many niches as you want;
Below are some of the niches areas that you might need to look into if you are looking to start your appliance repair business;
- Appliance Repair Services
- Home and Garden Equipment Repair Services
- Electronic and Precision Repair Services
- Sale of spare parts
- Other personal household goods repair services
The Level of Competition in the Appliance Repair Industry
The level of competition in the appliance repair business industry is one that is totally dependent on the location of your business. This is because you have to physically meet with customers in order to help them repair their faulty appliances.
When it comes to the repair of appliances, what most customers are on the lookout for is that they get quick and excellent service for their appliances. Once they are able to get this, customers are ready to remain loyal to a brand than leave that for another.
Therefore, if you are looking to start your appliance repair business in the United States of America, you should be prepared to meet with stiff competition amongst other appliance repair businesses in your area by ensuring that you offer quality services.
List of Well – Known Brands in the Appliance Repair Industry
In every industry, there are always brands that stand out and the appliance repair industry is no different. There are several reasons why some brands are more popular than others and this might be due to the fact that these brands have deployed several strategies such as intense marketing and publicity strategies, their length of time in the industry, their customer service relationship, the quality of their service and their rates.
Below are some of the well-known appliance repair brands in the United States of America;
- Best Buy
- Sears Holding
- Lee Company
- Complete Appliance Repair
- Melvin’s Appliances
- Famous Appliance Service
Within a decade and a half, the appliance repair industry has undergone tremendous changes. The industry has seen a lot of consolidations which has brought about a number of new appliances in the market. These new appliances do experience frequent problems even though they are more expensive, leading the owners to want to repair them rather than buy a new one.
Even though the numbers of appliances that are being sold are increasing, the numbers of qualified appliance repair businesses are not, and so the few available are not able to keep up with demand.
Because qualified technicians are hard to come by, it is far easier for local appliance repair businesses to be able to compete with large companies especially as these local companies are able to offer personalized services to their customers.
The federal government in 2014 spent nearly $91,000 on the repair and maintenance of appliances. It also awarded more than 1,200 contracts to 163 companies.
Starting Your Appliance Repair Company from Scratch vs Buying a Franchise
Buying a franchise can help you overcome the challenges that new businesses face when they have to create a name for themselves in a bid to get the attention of their intended target market. When buying a franchise, you also buy mentorship, which is why it is important to make a thorough research on the available franchises so that you do not end up buying what will not be favorable to your business.
Starting a business from scratch is one of the fastest ways for an entrepreneur to thoroughly know and understand the business he or she is going into. This is why it is essential to have a comprehensive business plan at hand because not only does your business plan provide a theoretical view of your business, but it will help influence your decisions and actions and also help you overcome certain challenges that you are going to face during the course of starting and running your business.
Possible Threats and Challenges You Will Face When Starting an Appliance Repair Company
As an entrepreneur starting any business anywhere in the world, it is important that you know that threats and challenges are going to crop up at any point in time and so you should be ready to handle them when they do. However, you should note that some of these threats and challenges cannot all be handled and when this happens, it is best that you remain optimistic about your chances of growing and remaining in business.
Some of the threats and challenges that you are likely to face during the course of starting your appliance repair business are; having to deal with intense competition from already existing appliance repair businesses, economic boom that might lead to people not wanting to repair their appliances but buying new ones, and competition from new appliance repair businesses in your location.
Starting an Appliance Repair Business – Legal Matters
- Best legal entity to use for this type of business
There are four legal entities that are available for an entrepreneur looking to start a business in the United States and they are; sole proprietorship, partnership, corporation and Limited Liability Company (LLC). In a sole proprietorship, the owner is responsible for all the actions and decisions taken during the course of running the business.
Should the business run into any losses, the owner will be held personally liable? A large number of appliance repair businesses that started in the United States chose this legal entity and later changed to another when the business has grown tremendously.
In the partnership kind of legal entity, two or more people come together and agree to run a business. All partners are bound to any decision or action taken by any of the partners. The advantage of a partnership over a sole proprietorship is that more people bear the liability should anything go wrong during the course of running the business. Another advantage of a partnership kind of legal entity is that there are more people to pool funds with which to run the business.
In a corporation, the business is regarded as a separate legal entity from the owners. This kind of legal entity is not usually easy to set up and so usually require an attorney to handle it. Most appliance repair businesses don’t usually choose this kind of legal entity.
The Limited Liability Company (LLC) has a bit of features from all the other kinds of legal entities and so because of its flexibility; it is very popular for entrepreneurs starting their business or looking to change their legal entities from a sole proprietorship or a partnership kind of legal entity.
Catchy Business Name Ideas Suitable for an Appliance Repair Company
While starting a business with the aim of maximizing profit is a fantastic idea, without a catchy name for your business, you might find that you are not getting as much customers as you should because a business name is very vital to the impact your business will have in its community. When you are choosing a name for your business, it is important that you chose one that is catchy, unique, memorable and indicative of the industry that you are in.
Below therefore are some catchy business names that you should consider when looking to name your appliance repair company;
- Mitch’s Appliance Service
- Dakota Appliance Repairs
- Schum All Appliances Repairs and Maintenance
- Maxi Sure Appliances
- Middas Touch Appliance Center
- Hoty Hoot Appliance Repairs
Having insurance policies for your business is very mandatory in the United States especially as it is to the benefit of your business to have these policies that will protect your business and not make you pay out of your pocket for any unfortunate circumstances that might occur during the process of starting or running your business.
It is necessary that you not only set aside a budget for the insurance policies which you will purchase but to know which would be best for your business. You can engage the services of an insurance agent or broker who will let you know the right insurance policies that you would need for your business.
Below are some of the basic insurance policies that you should consider purchasing should you be looking to start your appliance repair business in the United States of America;
- General Liability Insurance
- Professional Liability Insurance
- Workers’ Compensation Insurance
- Business Owner’s Policy
- Health Insurance
- Property Insurance
- Overhead Expense Disability Insurance
Intellectual Property Protection/Trademark
When starting an appliance repair business, all that is required from you is to ensure that the appliances of your clients are fixed excellently. As this is a service oriented business, you might not need to bother with applying for intellectual property protection.
Some entrepreneurs in the service oriented business however usually apply for intellectual property protection for their company name, logo, slogan, domain name or any other material they deem worthy enough to protect. If you fall under this category, then it is important that you get in touch with a lawyer to help you out.
Is Professional Certification Needed to Run an Appliance Repair Business?
In the United States, if you are looking to start and run a successful appliance repair business, especially if you are going to be repairing appliances such as refrigeration systems, then you might need to make findings via the U.S Environmental Protection Agency (EPA) as the agency has made it mandatory to take certification courses for those that will be offering this niche task.
The tests that are needed to be taken involve small appliances, low-pressure systems and high-pressure systems. Individuals must pass these three tests before they can be given a universal certification. There are also optional certifications offered by professional organizations for those looking to provide a boost to their business. Some of the optional professional certifications include;
- National Appliance Service Technician Certification (NASTeC)
- Master Technician Certification
Even though these certifications are optional, it is to the benefit of your business to have them as it will allow your customers have confidence in your business and also make you stand out from your competitors.
List of Legal Documents You Need to Run an Appliance Repair Company
When choosing to start any business in the United States either from home or from a commercial facility, and regardless of the size or legal structure chosen, it is important that the business has satisfied all the legal requirements.
Not having the right documents might lead you to get into trouble with the law and so if you aren’t sure what is required of you, it is best to seek the services of a lawyer to help get all the documents you will need to run your business successfully. Some of the legal documents that you will need to run your appliance repair business successfully are;
- Certificate of Incorporation
- Operating Agreement
- Business License and Permit
- Professional Certification
- Business Plan
- Employment Agreement
- Insurance Policies
- Sales Tax Permit (For sale of spare parts)
- Employer Identification Number (EIN)
- Federal Tax Identification Number
Financing Your Appliance Repair Company
Even though sourcing for start-up capital might not be so easy, it is not something that an entrepreneur can escape, which is why it is necessary that you have a comprehensive business plan at hand, especially if you are going to be sourcing for funds from private investors or a commercial bank, as your business plan is the only way by which they can take you seriously.
Below are some of the options that are available to you if you are looking for how to finance your appliance repair business;
- Generating part of your start-up capital from your savings or sale of stock
- Sourcing for soft loans from friends and family members
- Applying for loan from a commercial bank
- Approaching a private investor to source for loans for your business
Choosing a Suitable Location for your Appliance Repair Business
Deciding on the appropriate location for your business is very important as the right location could cause your business to grow and boom, while the wrong one could cause your business to totter. When choosing a location, it is important that you choose an area that would be within the hub of your target market as this will allow you to be able to gain the attention of your target market and also be able to compete favorably against your competition.
If you are starting off this business on a small scale and do not have the money with which to run your business from a commercial facility, then you might run your business from home and use your garage as your workshop. However, if you will be running this business from home, you should know that your business will not grow beyond a certain limit and that you will not be able to compete fairly against your competitors.
There are several factors that you would need to consider when looking for a facility to run your appliance repair business and they are; nearness to your target market, easy accessibility, conspicuous and strategically placed and conducive enough for your employees. Also, the facility should be within your budget as you would not want to cause a strain on your overall budget by leasing a facility outside your budget.
When leasing or renting a facility, you should ensure that you sign a lease agreement that has a back-out clause. For instance, if you sign a 3 year lease, you should be able to back-out in a year if the place is not favorable to your business.
Engaging the services of a real estate agent is very important as this will enable you work with someone who knows the area and will help you choose a place that will be very appropriate for your appliance repair business.
Starting an Appliance Repair Business – Technical and Manpower Details
The appliance repair business is one that can be considered very lucrative and this is due to the number of appliances that are being owned by individuals and businesses in the United States of America, and these appliances keep having malfunctions and therefore needing repairs; especially as customers find it more cost effective to fix rather than replace their appliances except for those who would rather buy than fix. It is therefore important that you engage in a bit of research to determine what area will be profitable for you to go into.
However while this business might be one that will bring you a lot of money, you should note that you are prone to injuries, gas leaks and electric shocks during the course of running the business and you should therefore be adequately prepared.
The appliance repair business is one that requires a lot of tools and equipment, and while some of these tools can be bought new, a lot can be gotten as fairly used as long as you get those that are genuine so that you can use them for a long time, especially if you are on a strained budget.
Some of the appliance repair tools and equipment that you will need to run your business include; fuses, thermostats, belts, multimeter, security bits, AC voltage detector pen, telescoping magnetic pick-up tool, fingerless Kevlar gloves, canned air, turkey baster, 8’ test cord, jumper wires, heat gun, generic spanner wrench, drilling hammer, and pliers. Administratively, you would require computer, phones, printer and software to be able to run your business successfully.
Even though the nature of the appliance repair business is one that can allow you the entrepreneur run the business alone and from home; but in order to compete favorably against your competitors, you would need to rent a facility, which means that you would need to employ people to help man the facility too.
If you are therefore looking to build a business that would last for a long period of time, you might need to hire the following people; Chief Executive Officer, Admin and Human Resource Manager, Business Development and Marketing Executive, Appliance Repair Technicians, Accountant, Front Desk Officer, Cleaner and Security Guard. From the above analysis, you will need at least 8 people to be able to run your appliance repair business effectively.
The Service Delivery Process of an Appliance Repair Company
An appliance repair business is one that helps individuals and businesses to repair and maintain their appliances which may fall into different categories such as household, home and garden equipment. Even though almost anyone can become skilled enough to start repairing appliances, some appliances will require you to have professional certification by the EPA as well as other organizations.
Once you have decided to go into an appliance repair business, it is important that you not only get the business properly registered, but also ensure that you acquire the skills needed, and the tools and equipment that will allow you to effectively and efficiently handle whatever tasks your clients ask of you.
When clients bring their faulty appliances to you, it is your duty to check what exactly is wrong with the appliance after listening to your clients describe what went wrong. It is from the description that you can have an idea of what is wrong and also carry out further tests to truly determine what is wrong.
Starting an Appliance Repair Business – The Marketing Plan
- Marketing ideas and strategies
When starting your business, it is essential that you have plans to market your business properly to your intended target market. Marketing is a way to anticipate the needs of your target market and then work to meet up those needs. If you are looking to penetrate your target market, and carve out a fair share for your business whilst also having an edge over your competitors, then it is essential that you market your business.
Before you can however craft the right marketing strategies that would be right for your business, it is necessary that you conduct a thorough market survey first. This market survey is necessary because it allows you to know what niche you intend to go into, who your target market is, understand their characteristics and what it is they want from you. Also, you would be able to study your competitors, what they are doing and how you can exploit their weaknesses to your advantage.
Once you have studied the market you intend offering your services to, you will then be able to create marketing goals and objectives that will be very effective for your business. This will then allow you to streamline your marketing strategies to align with your overall marketing goals and strategies.
In order to have an advantage and stand out from your competitors, you might need to engage the services of a marketing consultant who has experience in the kind of business you are going into, or hire in-house marketing executives who will craft the right marketing ideas and strategies that will align with your marketing goals and objectives.
Below are some of the marketing ideas and strategies that you will need for your appliance repair business;
- Mail brochures displaying your services, contact address and rates to the mailboxes of your prospective customers
- Empower your marketing executives to physically market the services of your appliance repair store
- Place adverts in local newspapers and magazines as well as on radio and television stations
- Use your social media platforms such as Facebook, Twitter, Instagram, YouTube and Snapchat to market your services
- Distribute handbills and fliers in various strategic locations in order to market your services
- Ensure that your appliance repair business is listed in yellow pages as well as in online directories
Strategies to Boost Your Appliance Repair Company Brand Awareness and Create Your Corporate Identity
Most start-up companies, especially those in areas where large companies are dominating and where competition is intense, usually engage the services of a publicity consultant who has the required experience in the field they are going into to craft something that would help them achieve their intended goals and objectives.
The internet has made it very easy for businesses in this age to boost the awareness for their brand and also create a corporate identity for their company. Not only does the internet has far reaching effects, it is also a bit cheaper and is considered more effective by many.
Below therefore are some of the strategies that you can use to boost awareness and create a corporate identity for your appliance repair business;
- Distribute handbills and paste fliers in various strategic locations so as to create awareness for your appliance repair business
- Create a unique website and use this to create publicity about your business. Ensure that you deploy SEO strategies so that your website could rank tops in search engines
- Install flexi banners in strategic and conspicuous locations and also ensure that you have a distinctive signage outside your appliance repair store
- Use your social media platforms such as Facebook, Twitter, Instagram, YouTube and Snapchat to create awareness for your appliance repair business
- Ask satisfied and loyal customers to help refer your business to their friends and colleagues
- Participate in certain community and charity events so as to create the needed awareness for your appliance repair business