A business plan is essential to your success if you are considering starting an appliance repair business. Starting a business is an exciting endeavor, but it doesn’t always last if you don’t organize your business correctly.
The good news is that the appliance repair industry is growing at a compound annual growth rate (CAGR) of 5.4%. Becoming an appliance repair business owner can be highly successful if done correctly.
Small businesses are the backbone of many towns but are also more likely to fail than corporations or chains. To avoid this, you should prepare as much as possible before starting a small appliance repair business.
If you are good at fixing machines and want to do business out of it, the first step you should take is to make a business plan. This will ensure that you can stay in business and show you whether starting your own company is viable in the first place.
Eugene Cornelius of the Small Business Administration Discusses Just How Vital a Business Plan is for Your Appliance Repair Business
A business plan is more than just a pitch for your business. While it is helpful to get beginning loans or start your business, a business plan will grow with your business and provide an accurate snapshot of where your business is and where you want it to be.
You can think of a business plan as a resume for your business. With a constantly updating, living document, you will always be able to give investors an idea of where your business stands and how it will grow within the next few years.
Business plans can be used for investors, for new management, and to show where your business is headed. It will continue to change and grow as your business changes, making it a living document and an essential part of your company.
However, the most important part of a business plan is the beginning. If you are creating your own company, you need to ensure that it is viable before investing time, energy, and money into it. Because around 20% of small businesses fail within the first year, a plan can prevent unnecessary failure and help you survive longer.
Of course, the first step to being successful in appliance repair is to create a business plan. However, it’s not as simple as writing down what you want to do (i.e., repair appliances). If you have little to no business experience, you might need to hire a professional to help you write a business plan.
However, there are ways to do it on your own. Because there is no set format, you can choose how you want your business plan to look. As long as it’s organized well and easy to read, your business plan will be successful.
Although you can organize your business plan however you like and change its appearance, it’s crucial to include several pieces of information. You need the reader to know what your business looks like now, your future plan, and how you intend to reach your goals.
Here are some of the essential pieces of an appliance repair business plan. While your business might need some extra sections, these are the basic parts that belong to every business plan.
The first thing on your business plan should be an overview of your business as it is now. If your business is just beginning, this can be an overview of your goal, whether that’s a brick-and-mortar store or a single-employee business. You will likely write this part last, as it overviews the entire plan.
The business overview will tell anyone reading the report where you are now and where you hope to be. It’s a snapshot of your company and gives investors and employees an idea of what the rest of the business plan will look like. This is sometimes called an executive summary and includes details from the whole business plan.
In addition to an overview of your particular company, you should include an industry overview in your business plan. Research how lucrative the appliance repair world is and how much a well-managed business can make in a year. There will be another section for the local competition, but you could include some information on that here.
An industry overview is an excellent section for investors who might not know much about appliance repair. Giving potential partners some basic information on the industry will set them up well for the next parts of the plan.
Like on a resume or curriculum vitae, use this part of the plan to introduce yourself. As a business owner, you want to write your qualifications down early on. It’s also crucial to include any co-owners in this section - whoever plays a part in owning the company should get a short bio here.
These bios play to the strengths of the owners. Make sure that you discuss any previous entrepreneurial experience and appliance repair and plumbing experience. You should use this formula for bios in both the ownership section and the next section of the business plan.
You’ve just introduced the owners, but other employees are also important. If you’re planning on a small company with just a few employees, you can list all of them here and give them full bios. However, if you already have several employees and want to hire more, only write bios for the management.
For businesses just beginning to hire employees, this is an excellent section to outline your goals for company size. Appliance repair companies range from two or three employees to dozens, and giving the reader a good idea of your company’s ideal size will help them get an accurate picture.
Of course, no business is complete without a location. Unlike many other home repair companies, appliance repair doesn’t require many tools or parts. Until you have a brick-and-mortar location, you can buy a utility van and use that as your primary work vehicle and office.
However, you will still need an official business location. This could be your house or an office, but it should be labeled on your business plan, as well as any potential goals to expand or buy real estate. The general location should be included as well because you might be competing with other repair shops in the vicinity.
In most states, a business license or permit isn’t required for appliance repair businesses. However, there may be special permits required for specific types of appliances, such as anything that handles refrigerant.
A relevant example is that the Environmental Protection Agency (EPA) requires special certification through their Section 608 Technician Certification. If you have permits or licenses, you should include them in your business plan.
If you don’t have any licenses, permits, or certificates, make it a plan to get some to make your business look more official. A licensed appliance repair tech is much more likely to get hired than someone who is simply good with machines. Even if you go to a class and use that certificate, it can help you get customers.
Competitive analysis is a huge part of planning a business. It may be your dream to open an appliance repair business, but if there are already several in your town, you might not make it very far.
Look at the competition, research their hours, availability, and prices, and see how you can reasonably offer a wider variety of services. Listing your competition on the business plan and their potential weaknesses will help you understand what you need to do with your business.
How are you going to effectively run your appliance repair company? You’ll need to establish systems and processes for your small business so that you can effectively respond to a customer when they call you to service their household appliances.
You’ll want to consider appliance repair software to track all incoming leads and to track all appliance repair service jobs. You should be able to use software to effectively dispatch an appliance repair technician to perform field service and to track the progress and outcomes of all your team’s appliance repair jobs. You should be able to track all of your repair technicians with a quick glance at your field service management software.
FieldPulse is Just One of Many Field Service Management Software to Help You Stay on Top of Each Service Call
Effective appliance repair marketing is the best way to get your company off the ground and keep it running beyond a few months. If you have no experience in marketing, hiring a marketing specialist might be a good way to ensure that enough people know about your company to become new customers.
Whether you hire an expert or not, include a section on marketing in your business plan. It should include your target market, marketing plan, and promotional strategies. Including this right before or right after listing the competition is best.
Search engine advertising with Google Ads can be extremely effective to bring in new clients, but it may have a higher cost per lead than other marketing tactics like SEO (search engine optimization). You can use email marketing sparingly - you don’t want to spam your potential prospects, but you should be using email to follow up with each existing customer after a job has been completed. This feedback can help you improve your overall appliance service, gather feedback on each appliance technician, and to collect reviews for your appliance repair business.
The most important part of marketing is discovering your target market. As an appliance repair business, your target market is anyone with appliances. However, if you have a specialty - in refrigerators, washers, dryers, or microwaves - you can narrow that down even further.
Once you’ve decided on your target market, you can research how to best reach that group. Include the results of that research, as well as your target demographic, in your business plan. This might change as your business grows.
Finding a promotional strategy is an integral part of marketing. Without a promotional strategy, you won’t be able to tell potential customers about your services. Whether this involves an online ad campaign, television ads, flyers, or a combination effort, you should include your plans in the business plan.
If you’ve done any grassroots or word-of-mouth promotions already, include this. Reviews from friends or neighbors you’ve helped can boost a beginning company and give you the headstart you need.
One of the most essential parts of a business plan is financial statements. Whether your company is an established appliance repair business or you have just started thinking about starting it, money will be the limiting factor in any growth.
While you don’t have to include bank statements or personal details on this business plan, there are three financial statements you should include:
With these three pieces of information, a potential investor can look at the financial state of your business and see whether they are interested in becoming a partner. Often, potential investors will reach the business overview, skim much of the plan, and focus on the financial sections.
If your financial statements are where you are now, financial projections will tell readers where you plan to be at the end of the term. You can calculate these based on current customers, the potential outcomes of your marketing strategies, and monthly costs.
Financial projections will vary every quarter or year (depending on how you decide to divide up terms) and will be different for every company. If you’re looking for investors, you want to show them that you can meet your projections multiple times and even surpass them.
In addition to your financial status and the projections, you want to show investors or potential managers how you plan to get there. A financial strategy section is where you lay out your plans for achieving your financial goals.
If you aren’t sure how to achieve your goals or whether they are feasible, a business partner is an excellent way to split up talents. Many appliance repair companies have a business partner for the financials and business side and a partner who takes care of the appliance repair.
Like any business, your focus will be on sales. If you can make enough repair sales to make up your financial goals and pay the bills, you will be able to stay in business. However, potential investors will want to see how many sales you project for the next business term.
You can calculate this based on your success over the last term or based on marketing strategies. The more sales projections you consistently meet, the more likely an investor is to take an interest in your company.
Although your business plan will mostly involve your plans and the goals you intend to achieve over the next few years, you should include a section on milestones you’ve already achieved. This can convince investors that you are serious about your business.
Beginning milestones can include appliance repair training, apprenticeships, and your plans. With a well-organized business plan, milestones can help you hire great employees or accrue worthy investors.
SCORE has a large variety of business plan and financial statement templates that you can use to help plan the path of your business.
Here are some frequently asked questions about business plans and appliance repair companies. Hopefully, they will answer your questions and help you to plan your new company successfully.
A business plan should be updated as the business grows. Like a resume or CV, you can continue to update a business plan every few months to keep track of your accomplishments and goals for the future. Think of it as a living document and a way to update any newcomers to the company.
Appliance repair can be extremely profitable if you have a good business plan and execute it well. You’ll have to research the local market and what might be necessary for your business to succeed. However, you can make a good living with good reviews and an excellent business with appliance repair.
The best way to grow any small business is through effective marketing. Getting a solid client base will keep you in business much longer than the average family-owned company, and you can do this by advertising well and receiving good reviews. Consult a business manager for tips on how to grow your business properly.
