How Much Do Auto Body Shop Owners Make Per Year?

Adam Huber

The Need For Diversification

As profitable an endeavor as auto body repair is, fewer vehicles on the road during the global pandemic meant not only fewer crashes, as most people worked from home, but also reduced revenue for auto body shops. Add in the fact that innovations like AI and advanced tech offer drivers more safety provisions, leading to fewer collisions. 

Thankfully, as more states continue to ease up Covid-19 restrictions and lockdowns, people continue to return to offices, schools, and travel. And with the overall dependence on automobiles for transport almost back to pre-pandemic levels, auto body franchises are flourishing and thriving once more. As a result, the car body shop industry anticipates relatively steady gains moving forward. 

But before tossing your feet into the world of auto body repairs, you will want to know how much auto body shop owner makes per year. Having a rough figure will help you evaluate how financially viable the business opportunity is and invest right.

So, How Much Do Auto Body Shop Owners Make Per Year?

After conducting proper market research, our team established that a more extensive auto body shop with four or more mechanics could earn upwards of $100,000 per year. Meanwhile, a smaller body shop owner with a small team of mechanics will take home between $30,000 and $60,000 per year. However, these figures vary depending on the: 

  • Expertise and quality of your services 
  • Location of the shop
  • Expenses
  • Type of marketing strategy

Yet, in making your auto body shop the moneymaker you envision, nothing is more critical than diversifying the products and service lines you offer and adding complementary businesses. As a result, larger auto body shops have learned to diversify and spread their capital amongst a variety of services. Examples of complementary goods and services auto body shops owners can offer include:

  • Paint touch-up  
  • A peelable paint product like ClarityCoat
  • Window Tint.
  • Glass shops (repair and place)
  • Windshield chip repairs
  • Paintless dent repair
  • Auto detailing
  • Rustproofing
  • Antique and vintage car restorations.

More Reasons Why Auto Body Shop Owners Need to Diversify

As much as diversifying your auto body repair shop may cost you a hefty amount, it is well worth the investment for the following reasons:

  • Increases Revenue

By adding other natural extensions of the goods and services they already offer, auto shop owners can tap into more revenue streams, increase turnover, and make for higher sales volume from the new services and products. The sales proceeds of the extra income channels increase the inflow of revenue and boost profitability.

  • Expands Customer Base

Introducing additional service means appealing to a larger market than the one you currently serve and attracting new customers besides your loyal customer. New products and services mean more need for a market to sell them. And studies show that customers are more inclined to auto franchises that offer a variety of services and products. Variety saves clients the hassle and time of hopping from one auto shop to another to access different services. So, diversification does not only draw in new clientele but also increases the loyalty of existing customers.

  • Additional Upsell

When you have various products and services offered in your auto body repair shops, it's easy to upsell, cross-sell and convince customers to try out another complimentary service after attending to them. Case in point, a customer who has driven in for a paint touch-up, is primed for additional services you can offer, like getting their car detailed. Consider offering discounts for the second service.

  • Regulate Cash Flow All Year Round

The demand for different services varies based on the time of the year and the state of the economy. For example, the demand for window tint services is likely to soar during the summer and crumble during the winter. Along with that, some industries may experience a downturn in some regions. For example, rustproofing may only be viable in coastal areas or cold regions where salt is used to melt snow.

Nevertheless, auto body shops owners who offer a variety of services and products are seldom reliant upon a single revenue stream for their returns. So, diversification helps them mitigate adverse market cycles and risks of specializing in one service and protects them even in economic decline.

  • Enhances Business Growth

Tapping into new market segments means increasing your business's visibility to a broader audience and expanding your shops operations.

  • Protection From Competition

As with any other market, the auto repair world is very competitive, with hundreds of new franchises popping up every day. Nevertheless, auto shop owners can employ diversification as a defensive strategy against harsh competition. By increasing the variety, collision repair shops can broaden their hold on the market. On top of that, this strategy can stave off competitors and mitigate competition-related challenges.

In a Nutshell

Appropriately approached, an auto body shop is a lucrative venture that can earn you a fortune. And auto body garages can significantly increase their bottom line by diversifying and offering other related services like window tint, detailing, and rust proofing. However, diversifying without operating and managing your auto body shop correctly is a waste of time and effort. You will also need competent management, practical and high-yielding strategy, and a result-oriented, customer-friendly team. 

But if you are convinced that your collision repair business has all it takes, then you should not think twice about diversifying. Just note that there will be added demand on the existing floor space, personnel, and capital. More than that, always strive to cut costs to a minimum and utilize resources at your disposal.