Spare Parts Business | 6 Step Guide to Start a Successful Business

 

Internal and external parts of cars that have been in use for a long time need to be replaced regularly, depending on the wear and tear of the portion in use. The vehicle spare parts business is profitable and evergreen because of this single reason. 

Our ability to invest determines whether or not we can start an automobile spare component business. However, it is preferable to give it a shot because our commitment is the key to our success.

 

Steps to Start a Spare Parts Business

 

Step 1 - Decide on the type of spare parts business

There are several types of vehicle spare parts businesses. As a result, entrepreneurs must decide on the specific type of business they wish to start and apply for company registration online.

Some of the types are described in greater detail here:-

Only spare components are for sale

• This type of business is run out of a shop where the entrepreneur sells automobile spare parts either retail or wholesale.
• This firm can be further specialised by exclusively dealing in car spare parts, heavy vehicle spare parts like trucks and buses, or auto-rickshaw spare parts. It contributes to the development of a specialised market.

Workshop in addition to the retail store

• It comprises a store that sells replacement components as well as a workshop where automobiles can be repaired.
• The company can function as a one-stop-shop for all automotive needs.
• This type of business will necessitate a large facility for receiving automobiles for repair as well as competent personnel to do the repairs and servicing.

Online Shop

• This type of car parts business does not require a physical location and maybe run entirely through an online site.
• The entrepreneur can use a website to supply spare part solutions for a variety of cars, as well as transport things.
• Entrepreneurs can also provide spare parts for ancient cars that are hard to come by, as well as luxury cars and vehicles such as RVs, high-end cars and so on.

Franchise

• In this form of business, the owner chooses a franchise model and only supplies vehicle spare parts from a specific company or brand.
• Alternatively, the business can specialise in a certain vehicle brand's spare parts, such as Hyundai or Tata motor vehicle spare parts.

 

Step 2 - Developing a Business Plan

The next stage is figuring out how to establish an automotive spare parts business is to have an automobile business plan in place once the business owners have decided on the type of spare parts business they want to start. If the entrepreneurs haven't done so before, the business plan will assist them in listing the numerous crucial essential information relating to the business that they must consider or adhere to.

The following are some of the key details that business owners should think about including in their vehicle spare parts business plan:

Basic aspects that business owners must consider including in their vehicle spare parts business strategy are summarised in this infographic.

• Choosing the business's location and industry
• Chalking a list of the company's goals and the target market.
• determining the company's size

 

Step 3 - Business Registration and Licenses

Along with choosing the type of car spare parts business to start and developing a business strategy, there are a few additional things to consider when learning how to start an auto parts business:

~Getting Business Licenses and Company Registration Online Certificate

Permits and registrations are required for the vehicle spare parts industry to get off to a legal start. The following permits are required to start the business:

• Registration under the Shop Act is required for retail outlets located within municipal limits. This Act establishes minimum working standards for establishments having employees, and it must be posted in the shop as well.
• GST Registration- Every firm, including the vehicle spare parts industry, is required to follow the current taxation laws and pay their taxes on time. The GST is a unified tax structure that governs the taxation structure and simplifies the process of paying taxes across the country. If the yearly revenue of a car spare parts firm surpasses the threshold, this registration is also necessary.

 

Step 4 - Get the Investment for Spare Parts Business

We must determine the start-up capital requirement after gaining expertise and completing the company strategy. 

In general, we must include the cost of renting a retail space, the cost of setting up a store, and the cost of obtaining spare parts from a wholesaler or a manufacturer. 

You will need a minimum investment of Rs.8,00,000 - Rs.15,00,000 to start a spare parts business.

We must also budget and keep track of our expenditures. It aids us in assessing your company's break-even point and estimated return on investment.

 

Step 5 - Set up the Store

We need to correctly set up our store. It entails meticulously inspecting the electrical system, counter space, and merchandise. 

Most importantly, get the advice of an interior designer to create the ideal floor plan. However, to reap the greatest rewards, we must make the best use of every available inch of space.

We will need to obtain the spare parts that we intend to sell after the final settlement of our store. Actually, our company plan plays a big role in determining which things you'll need and where you'll get them.

 

Step 6 - Hire the Team

In any start-up business, the first workers play a critical part in achieving initial success. Employees of various categories, such as welders and mechanics, should be hired based on their abilities and craftsmanship.

 

Conclusion

The vehicle spare parts business is not a novel or unusual business concept. However, it does have a lot of potential given the country's growing number of automobiles. When an entrepreneur is trying to figure out how to establish an automobile spare parts business and make it successful, they should concentrate on marketing and customer service. 

The company should place a premium on offering quick and dependable service. They can even go a step further and deliver services at the customers' doorsteps or their manufacturing facility. 

To establish a customer base, offer free first servicing with the purchase of spare parts or other promotional services.