Starting an appliance repair business is a rewarding venture that combines technical skill with business savvy. The industry pulls in billions of dollars annually, thanks to steady demand from homeowners, property managers, and small businesses who need their appliances running.
This guide will take you through the practical steps of validating your business concept, obtaining necessary permits, and acquiring equipment to help you launch a successful appliance repair business in the U.S.
Step 1: Create a business plan and validate your concept
First, define your service area. You might want to start with a 15-20 mile radius. A frequent misstep is casting too wide a net, which fills your day with travel time instead of billable hours. Check local forums like Nextdoor to see what customers want from a repair service.
Next, look at your competition on Google Maps and Yelp. Note their services, prices, and what customers say in reviews. This research helps you find a gap. Maybe no one offers same-day service for specific brands or weekend appointments. This is your opportunity to stand out.
Estimate your startup costs
Your initial investment will vary, but planning for these categories helps manage your budget. A reliable used van might cost between $5,000 and $25,000. A comprehensive toolset and diagnostic equipment will likely run from $3,000 to $7,000.
Also, set aside funds for insurance, licenses, and an initial parts inventory. Under-stocking common parts is a mistake that can delay repairs and frustrate customers. A starter inventory might require $1,000 to $3,000. This brings your estimated startup total to between $10,000 and $40,000.
Here are 3 immediate steps to take:
- Define a specific service radius and research customer needs on local forums.
- Analyze at least three local competitors on Yelp or Google Maps.
- Draft a startup budget with line items for a vehicle, tools, and parts.
Step 2: Set up your legal structure and get licensed
You might want to set up a Limited Liability Company (LLC). This structure protects your personal assets, like your house and car, if the business faces a lawsuit. It's a simpler setup than a corporation, with profits that pass through to your personal tax return.
Once your LLC is registered with your state's Secretary of State, get an Employer Identification Number (EIN) from the IRS. It’s free and you can apply online. Think of it as a Social Security number for your business; you need it for taxes and a business bank account.
Secure the right licenses and permits
On the federal level, you must have an EPA Section 608 Technician Certification to work on appliances with refrigerants, like refrigerators and air conditioners. Skipping this can lead to heavy fines. The exam costs around $25 to $120, depending on the provider.
State and local requirements vary. Check with your state's contractor licensing board, as some classify appliance repair under a contractor or home improvement license. You will also need a general business license from your city or county, which can cost between $50 and $400.
Here are 4 immediate steps to take:
- File for an LLC with your state's Secretary of State.
- Apply for a free Employer Identification Number (EIN) on the IRS website.
- Research your state's contractor board for appliance repair licensing rules.
- Find a provider and schedule your EPA Section 608 certification exam.
Step 3: Secure your insurance and manage risk
You will want to get general liability insurance. This covers you if you accidentally cause property damage, like a water leak from a dishwasher repair. A $1 million policy is standard, with annual premiums often between $400 and $900.
Also, you need commercial auto insurance for your work van. Personal auto policies typically will not cover accidents that happen on a job. If you plan to hire help, you will also need workers' compensation insurance, as it is required in most states.
A frequent oversight is skipping professional liability insurance. This protects you if a mistake in your work causes a client financial loss, not just physical damage. It’s a different but important layer of protection for your business.
Find the right insurance provider
Look for insurers who specialize in the trades. Providers like Hiscox, Next Insurance, and The Hartford understand the specific risks you face, from electrical faults to property damage, and can offer tailored policies. A general agent may not grasp these nuances.
Here are 4 immediate steps to take:
- Request quotes for a $1 million general liability policy.
- Get a commercial auto insurance quote for your work vehicle.
- Contact a specialized provider like Hiscox or Next Insurance.
- Ask about adding professional liability coverage to your policy.
Step 4: Secure a workspace and purchase equipment
Many repair businesses start from home. Check your local zoning laws for home-based business regulations. If you need a separate space, a 200-500 square foot unit in a light industrial or commercial zone works well for parts storage and bench work.
When you negotiate a lease, you might propose a shorter 1-2 year term. This gives you flexibility as the business grows. Also, ask if the landlord will offer a tenant improvement allowance to help pay for shelving or a workbench.
Purchase your primary equipment
With a space secured, you can acquire your equipment. A quality multimeter will cost between $50 and $200. A durable hand truck or appliance dolly is another key purchase, typically running from $100 to $300.
If you plan to work on refrigerators or AC units, a refrigerant recovery machine is necessary and costs between $500 and $1,500. This purchase is a notable part of your startup budget, so it requires careful consideration.
For parts, you can open accounts with national suppliers like Marcone Supply or Reliable Parts. They generally do not require large minimum orders. A frequent misstep is to overstock obscure parts. Stick to common failure items for popular brands first.
Here are 4 immediate steps to take:
- Review local zoning ordinances for home-based businesses or light industrial spaces.
- Price out a refrigerant recovery machine if you will service refrigerators.
- Contact suppliers like Marcone Supply to open a trade account.
- When you look at spaces, ask landlords about 1-2 year lease terms.
Step 5: Set up your payment and billing systems
Most clients expect to pay upon completion. You might ask for a deposit, perhaps 50%, if you need to special-order an expensive part. This protects you if the customer cancels. Avoid a cash-only model, as it can deter customers who prefer cards.
You need a way to accept payments on-site. Look for a solution with low transaction fees and no long-term contracts. Many new business owners get locked into systems with high monthly fees or clunky hardware that is not ideal for mobile work.
For appliance 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. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, its rate is competitive against the higher commissions other providers often charge. It is particularly useful for collecting payment right after a repair, without extra equipment.
- Get Started: Download 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, including a policy for deposits on special-order parts.
- Compare mobile payment solutions, focusing on transaction fees and hardware needs.
- Download the JIM app to explore its features for on-site payments.
Step 6: Secure funding and manage your finances
You might want to look into the SBA Microloan program. It offers loans up to $50,000, which is often enough for an appliance repair startup. Lenders typically look for a credit score over 650 and will want to see your business plan.
Another path is equipment financing. This type of loan is specifically for your van or expensive diagnostic tools. Because the equipment acts as collateral, these loans can sometimes be easier to qualify for than a general business loan.
Estimate your working capital
Your startup budget gets you open, but working capital keeps you running. You will need cash for the first three to six months to cover fuel, insurance, and parts before revenue becomes consistent. A common mistake is failing to budget for this period.
Plan for about $15,000 to $25,000 in working capital for your first six months. Also, open a separate business bank account with your EIN as soon as you can. Mixing personal and business funds creates major headaches during tax season.
Here are 4 immediate steps to take:
- Research SBA Microloan lenders in your area on the SBA website.
- Calculate your estimated operating expenses for the first six months.
- Ask your bank about their options for equipment financing.
- Open a dedicated business bank account using your EIN.
Step 7: Hire your first technician and set up operations
When you are ready to expand, your first hire will likely be an Appliance Repair Technician. Expect to pay a salary between $45,000 and $65,000 annually. Their main job is diagnostics and repair, but do not forget customer service skills. Many owners focus only on technical ability and hire technicians who alienate customers.
Your technicians must have an EPA Section 608 certification if they handle refrigerants. While not always required, certifications from manufacturers like Whirlpool or GE can also be a major plus. They show a higher level of expertise and can be a selling point for customers.
Choose your field service software
Manual scheduling leads to mistakes. You might want to use field service software like Jobber or Housecall Pro from day one. These platforms handle scheduling, dispatch, and invoicing. This helps you avoid double-bookings and gives your business a professional feel.
As a benchmark, a single full-time technician can typically generate between $120,000 and $180,000 in annual revenue. This figure helps you decide when it makes financial sense to hire. It keeps your growth aligned with your income.
Here are 4 immediate steps to take:
- Draft a job description for an Appliance Repair Technician, including salary and required skills.
- Confirm your state's requirements for hiring your first employee.
- Sign up for a free trial of a scheduling software like Jobber or Housecall Pro.
- Check that any potential hire has a valid EPA Section 608 certification.
Step 8: Market your business and get customers
Build your online presence
Your first customers will likely find you online. Claim your free Google Business Profile immediately. Fill out every section with your services, service area, and hours. Encourage your first few happy customers to leave reviews, as most consumers use them to evaluate a local business.
Many new owners make the mistake of only relying on one source for leads. You can also run hyper-local Google Ads. Target keywords like "[Your City] refrigerator repair." You might budget $15-$30 per day to start. This can bring in leads right away while you build organic rankings.
Use direct marketing and partnerships
Do not overlook offline methods. A simple door hanger or flyer in targeted neighborhoods can work well. An offer like "10% off your first repair" can prompt calls. Also, introduce yourself to local property managers and real estate agents. They often need reliable technicians.
Track where every customer comes from. This helps you calculate your Customer Acquisition Cost (CAC). In this industry, a CAC between $50 and $150 is common. If a channel costs you $300 per customer, you know to shift your budget elsewhere.
Here are 4 immediate steps to take:
- Claim and complete your Google Business Profile with photos of your van and tools.
- Design and print 500 door hangers with a new-customer discount.
- Contact three local property management companies to introduce your services.
- Create a simple spreadsheet to track the source of every new lead.
Step 9: Set your pricing and profit margins
Choose your pricing model
You have two main options: hourly or flat-rate. An hourly rate, often between $75 and $150, is simple but can make customers nervous about a running clock. A flat-rate model is usually better. You charge a set diagnostic fee, then provide a fixed price for the repair.
For example, you might charge a $95 service call fee. If the customer agrees to the repair, you can waive that fee and charge a flat rate for the job. A frequent misstep is setting this fee too low; it must cover your time and travel if the repair is declined.
Calculate your profit on parts and labor
Your parts markup is a key part of your profit. A 100% to 200% markup is standard. This means a part that costs you $30 would be billed to the customer at $60 to $90. This covers your time to source, order, and warranty the part.
To see what your local market will bear, call a few competitors. Ask for a quote on a common job, like a refrigerator defrost timer replacement. This gives you a direct look at their labor rates and how they price parts, without you having to reveal you are a competitor.
Here are 4 immediate steps to take:
- Decide between a flat-rate or hourly pricing model for your services.
- Set your diagnostic fee, aiming for a range like $85 to $125.
- Establish a standard parts markup, such as 150% over your cost.
- Call three local competitors to get a price quote for a common repair.
Step 10: Set quality standards and scale your operations
Your reputation depends on quality. Track your First-Time Fix Rate (FTFR), which is the percentage of jobs you complete in one visit. A good target to aim for is over 80%. This metric shows your efficiency and diagnostic skill.
Also, measure your callback rate, which should be under 5%. After each job, send a simple email asking the customer to rate their experience. Some owners ignore poor feedback, but it is a free roadmap for improvement and helps you keep service consistent.
Know when to grow
Growth should be data-driven. Once a technician consistently brings in $120,000 to $180,000 in annual revenue, it is time to consider hiring another. This figure confirms you have enough demand to support a new team member and a second van.
Your field service software is key for managing this growth. Platforms like Jobber or ServiceTitan help you dispatch multiple technicians and track performance metrics for each one. This prevents scheduling chaos as your team gets bigger and you take on more work.
Here are 4 immediate steps to take:
- Start tracking your First-Time Fix Rate with a target of 80% or higher.
- Create a simple post-service survey to measure customer satisfaction.
- Calculate if your current revenue supports hiring another technician.
- Review your software's reports to monitor your callback rate.
You now have a clear path to launch your appliance repair business. Remember, your reputation is built on trust, not just technical skill. A happy customer is your best marketing. With this plan, you are well-equipped to start your journey.
And when it is time to collect payment, keep it simple. JIM lets you accept cards right on your smartphone for a 1.99% transaction fee, no hardware needed. This makes getting paid easy after each job. Download JIM and be ready for your first customer.
