Starting a repair business can be a rewarding venture, blending your technical know-how with sharp business savvy. The demand for reliable repairs is constant, and you can often start with a modest investment. That accessibility, however, doesn't guarantee success.
This guide will take you through the practical steps of validating your business concept, obtaining necessary licenses, acquiring equipment, and building supplier relationships to help you launch a successful repair business in the U.S.
Step 1: Validate your business idea and plan your budget
Research your local market
First, confirm there is a real need for your service. You can survey potential customers in local online groups or talk to 20-30 people in your area. Ask what they struggle to get repaired and what they would pay for that service.
Next, analyze your competition. Use Google Maps and Yelp to find every repair shop within a 10-mile radius. Note their specialties, read customer reviews, and check their pricing if available. This helps you find a market gap to fill.
Estimate your startup costs
Your initial investment will vary, but a clear budget is vital. Many new owners underestimate inventory needs or buy low-quality tools. You might want to invest in durable equipment upfront to avoid future replacement costs and downtime.
Here is a typical breakdown for a small shop:
- Tools and Diagnostic Equipment: $3,000 - $10,000
- Business Registration and Insurance: $500 - $2,000
- Initial Parts Inventory: $2,000 - $5,000
- Marketing and Website Setup: $500 - $1,500
This brings your initial startup range to between $6,000 and $18,500, not including rent. Planning for this range helps you secure adequate funding without early financial stress.
Here are 3 immediate steps to take:
- Survey at least 20 local residents or businesses about their repair needs.
- Create a spreadsheet of all competitors in a 10-mile radius, noting their services and reviews.
- Draft a detailed startup budget based on the cost categories above.
Step 2: Establish your legal structure and get licensed
Choose your business structure
You might want to start as a Limited Liability Company (LLC). This structure protects your personal assets, like your home and car, if the business faces a lawsuit. It also simplifies taxes by letting profits pass through to your personal tax return.
A frequent mistake is to mix personal and business money. Once your LLC is formed, open a separate business bank account immediately. This action preserves your liability protection and makes accounting much easier.
Secure federal, state, and local licenses
First, apply for a free Employer Identification Number (EIN) on the IRS website. You will need an EIN to open your business bank account. The online application takes less than 15 minutes to complete.
You will also need a seller’s permit from your state’s tax authority. This permit allows you to purchase parts for resale without paying sales tax. In addition, check with your city or county clerk for a general business license, which typically costs $50 to $150 annually.
Here are 3 immediate steps to take:
- File LLC formation documents with your state's Secretary of State.
- Apply for a free Employer Identification Number (EIN) directly from the IRS website.
- Contact your state's tax agency to get a seller's permit application.
Step 3: Secure your insurance and manage risk
Get the right insurance coverage
Protecting your new business is a high priority. You will want to look into General Liability insurance, which covers customer injuries or property damage in your shop. A typical policy with $1 million in coverage might cost between $400 and $900 annually.
Many new owners forget Professional Liability insurance, also known as Errors & Omissions. This covers you if a repair fails and causes further damage. Without it, one bad job could put you out of business. This coverage often adds $300 to $1,000 per year to your premium.
If you have a physical shop, you will also need Commercial Property insurance for your equipment and inventory. If you plan to hire employees, Workers' Compensation is legally required in most states. Consider providers like Hiscox, The Hartford, or Next Insurance that specialize in small business policies.
Here are 3 immediate steps to take:
- Request quotes for General and Professional Liability insurance from at least two providers.
- Evaluate if you need Workers' Compensation or Commercial Auto insurance for your business plan.
- List your tools and inventory to get an accurate quote for Commercial Property insurance.
Step 4: Set up your location and buy equipment
Find your physical space
You should look for a space between 500 and 1,000 square feet. This provides enough room for a workbench, parts storage, and a small customer-facing area. Make sure any potential property has "Commercial" or "Light Industrial" zoning with your local planning department.
When you review a lease, pay close attention to the electrical system. A mistake some owners make is to sign a lease and then discover they need more outlets or higher amperage. This can become an expensive, unexpected upgrade, so confirm the capacity upfront.
Purchase your gear and find suppliers
You can build a solid workbench without a huge outlay. A quality soldering station runs $150-$400, while a reliable digital multimeter costs about $50-$200. You will also need precision hand implements and any diagnostic software specific to your repair focus.
For electronic components, you might want to open accounts with suppliers like Digi-Key or Mouser. For device-specific parts, look into vendors like MobileSentrix. Many new owners over-order inventory at first, so start small and only stock what you need for the most common jobs.
Here are 3 immediate steps to take:
- Identify three potential commercial properties and verify their zoning classification.
- Create a shopping list for your initial equipment and price it with two different vendors.
- Open accounts with two parts suppliers relevant to your repair specialty.
Step 5: Set up your payment and invoicing systems
Choose your payment processor
Most repair shops require payment upon completion. For larger jobs that need expensive parts, you might want to ask for a 50% deposit upfront. This practice protects your cash flow and ensures the customer is committed.
When you look for a payment solution, focus on transaction fees and ease of use. Many new owners get locked into systems with high monthly costs or clunky hardware. Average commission rates from other providers often range from 2.5% to 3.5% plus additional fees.
For repair businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. The process is simple, just tap and done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for mobile repair calls. Here is how it works:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.
Here are 3 immediate steps to take:
- Decide on your payment terms, such as payment on completion or a 50% deposit for large jobs.
- Compare the 1.99% transaction rate from JIM with other payment processors.
- Download the JIM app to explore its features on your phone.
Step 6: Fund your business and manage finances
Secure your startup funding
The SBA Microloan program is a solid option for repair shops. It provides up to $50,000, and lenders often have more flexible requirements than big banks. Expect interest rates between 8% and 13%.
You can also look into equipment financing. This is a loan specifically for your tools and diagnostics gear. Some new owners use personal credit cards, but you might want to avoid that route. The high interest can quickly drain your early profits.
Plan your working capital
With funding in mind, you need to plan for your first six months. You should have at least $8,000 to $15,000 in working capital. This covers rent, utilities, and marketing before you have a steady stream of customers.
A frequent misstep is to underestimate these operational costs. This cash buffer keeps you from scrambling during a slow week. It ensures you can pay suppliers on time and maintain a good reputation from day one.
Here are 3 immediate steps to take:
- Research the SBA Microloan program on the official SBA website.
- Calculate your estimated operating costs for the first six months.
- Find your local Small Business Development Center (SBDC) for free guidance on loan applications.
Step 7: Hire your team and set up operations
Hire your first technician
Your first hire will likely be a Repair Technician. This person handles diagnostics, performs the actual repairs, and communicates with customers. Expect to offer a salary between $45,000 and $65,000, based on their experience level.
While certifications like CompTIA A+ or CET are a bonus, hands-on skill is what matters most. A mistake some owners make is hiring too fast. You should ask candidates to diagnose a faulty device during the interview to test their practical abilities.
Streamline your workflow
Once you have a technician, you need a system to manage jobs. You might want to use repair shop software like RepairShopr or Jobber. These platforms help you create work orders, track repair status, and manage your parts inventory from one place.
This efficiency helps you scale. A good target to aim for is $100,000 to $150,000 in annual revenue per technician. When you consistently exceed this, it is a strong signal that it is time to hire another person.
Here are 3 immediate steps to take:
- Write a job description for a Repair Technician, focusing on practical skills and customer service abilities.
- Sign up for a free trial of a management software like RepairShopr to see how it fits your workflow.
- Calculate your revenue-per-employee target to help you decide when to expand your team.
Step 8: Market your business and get customers
Build your online foundation
Your first marketing move should be to create a Google Business Profile. This is free and puts your shop on Google Maps. Fill out every section with photos, hours, and services. Aim to get your first 10 five-star reviews within two months to build trust quickly.
You should also claim your business pages on Yelp and Nextdoor. A mistake many new owners make is to ignore negative reviews. You should respond professionally to all feedback, as this shows you care about customer service and can turn a bad experience around.
Launch targeted local ads
Once your profiles are set, you can explore paid ads. Google Local Services Ads are a good starting point. You pay per lead, not per click, with costs often between $20 and $60 per qualified contact. This is often more efficient than traditional search ads.
You can also run small campaigns on Facebook, targeting users within a 5-10 mile radius of your shop. A small budget of $100-$200 per month can generate initial traffic. This helps you keep your Customer Acquisition Cost (CAC) under a target of $75.
Here are 3 immediate steps to take:
- Create and completely fill out your Google Business Profile.
- Claim your business listings on Yelp and Nextdoor.
- Set a starting monthly ad budget, even if it is just $100.
Step 9: Price your services and manage profit
Choose your pricing model
Most shops use a flat-rate model for common jobs, like $120 for a specific screen repair. For unknown issues, an hourly rate of $60-$90 is standard. You might want to charge a non-refundable diagnostic fee of $30-$50, which you can apply to the final repair cost.
Some new owners perform diagnostics for free. This can lead to wasted time if the customer decides against the repair. The diagnostic fee ensures you are compensated for your initial assessment work.
Calculate your parts markup
For parts, a 50% to 100% markup is typical. If a component costs you $30, you should charge the customer between $45 and $60 for that part. This margin covers your inventory costs and contributes to profit.
It can be tempting to compete on price alone, but this is rarely a sustainable path. Instead, research what local competitors charge by calling them for a quote on a standard repair. Price yourself competitively, but value your expertise.
Here are 3 immediate steps to take:
- Decide if you will use flat-rate, hourly, or a hybrid pricing model.
- Call three local competitors to get a price quote for a common repair.
- Set your standard parts markup percentage, aiming for 50% or higher.
Step 10: Establish quality control and scale your operations
Set your quality standards
You will want to create a standard checklist for every job. This could be a 10-point inspection you perform before returning a device to a customer. It ensures every repair meets the same high bar and builds trust.
A key metric to watch is your comeback rate. Many new shops fail to track this. If more than 5% of your repairs return for the same issue within 30 days, you may have a problem with your process or parts quality.
Plan your growth
With quality standards in place, you can look toward growth. A solid benchmark is revenue per technician. Once you consistently pass $150,000 in annual revenue for each technician, it is a strong signal that it is time to hire again.
As your team grows, you will need software to manage the extra complexity. A platform like RepairDesk can help you handle ticketing, inventory, and invoicing across multiple technicians without letting things slip through the cracks.
Here are 3 immediate steps to take:
- Create a 10-point post-repair inspection checklist for your technicians to use.
- Set up a system to track your repair comeback rate, with a goal of keeping it under 5%.
- Establish a revenue-per-technician goal to know when it is time to hire your next employee.
You now have a clear path to launch your repair shop. Remember that your reputation is built on trust just as much as technical skill. Every great repair strengthens that bond with your community. You have the plan, so go make it happen.
As you start to complete jobs, getting paid should be simple. A solution like JIM lets you accept card payments directly on your phone for a flat 1.99% fee, with no extra hardware. Download JIM and you are ready for your first customer.
