According to IBS World, the appliance industry ranks 22nd by market size among other services except for public administration and is the 605th biggest in the US. People heavily depend on appliances today. The cost of replacement when they are damaged is higher compared to just repairing them. It’s more viable to repair an appliance about 50% through its lifespan than buy a new one.
With the 2022 market size value at USD 55.34 billion, the appliance market is expected to reach USD 93.04 billion by 2030. To enjoy unlimited earning potential, here’s our guide for anyone wishing to start an appliance service.
Create The Business Plan
A business plan describes your business in various aspects, including services, how it will earn, leadership, staffing, financing, and operational model. An appliance repair business plan is essential when thinking of how to start an appliance repair business. Potential investors rely on the plan to evaluate the feasibility of a business before funding it.
Other compelling reasons to have a business plan for your appliance repair business include the following:
- Clarifies ideas and scope of your business
- Allows focusing energy and time on ideas with the highest potential
- Allows researching customers and competitors for strategic decision making
- Communicates your vision to potential hires
- Lays out your thoughts and ideas
To help you get started, here are the components that you shouldn’t miss in your appliance repair business plan.
The executive summary includes a short description of your business, usually one to two pages long. Elements that should be in your repair business executive summary include:
- What your business does
- Your business goals and vision
- The current financial state of your business
- Projected revenue for the coming five years
- Your management team and their competencies
Description Of Your Business
This section describes who you’re and what you plan to do. Anyone reading your description will be able to understand why you’re in business, what makes you different, and to invest in your business. A description allows putting down some of the intangible facets of your business, including:
- Business structure
- Business model
- Mission, vision, and value proposition
- Background information and its history
- Short and long-term objectives
- Members on your team and salaries
The potential market can break or make your appliance repair business. Your ideal market must include people with appliances who need repair to have a headstart for success. Market analysis and research are essential.
It must include the estimated potential of your target market, your position in that market, and the competitive landscape. Thorough research validates your assumptions while working through your business plan.
Your research must consider the following:
- size of your potential market
- understanding customer profile
- industry trends and trajectory
SWOT analysis considers your strengths, weaknesses, opportunities, and threats. It includes breaking down what you’re best at, what you’re not good at, and opportunities to take advantage of in the market.
Appliance repair services are always in demand since it’s cheaper than replacement. Gross margins are usually high, and your business can generate additional revenue from selling parts used during repair. Another strength is the low barriers to entry.
Read More: Appliance Repair Business Owner Salary
Various companies provide appliance repair services. Your business must have a broad-based marketing strategy. You must also develop relationships with service contract providers to generate income immediately.
There are various ways to grow your appliance repair startup since you can hire additional technicians to serve more clients. You can also set up locations in other locations to widen your market. There’s also an opportunity to acquire existing repair services already operating.
The only threats to an appliance repair business are competition from other businesses and when customers choose to replace instead of repair. The good thing is that even the replacements aren’t prone to damages that require your services. The decline in purchasing power lowers the chances of getting new appliances and increases the potential for appliance repair technicians,
There are three considerations when differentiating your business from the competition. Offering lower prices can maximize profits. Offering different services makes you stand out from the competition. You must also segment the market and focus on a niche to build traction with a smaller audience than struggling to capture a broader market.
Management and Organization
The section highlights who’s in charge of managing your business and its legal structure. You must include an organizational chart portraying your management team and their roles. The chart must communicate how every individual will contribute to the success of your appliance repair business.
This section highlights the services you offer. Do you repair, install, or maintain malfunctioning appliances? Does the customer need to bring the item to your workshop or do you work on-site?? Do you sell appropriate parts for repairing appliances? You must also include your certifications in handling particular appliance brands.
The marketing plan for your appliance repair business must include your current and future marketing strategy. These must focus on your ideal customers. Your marketing plan must include the price for your services, the unique services you offer, how you intend to put your services in front of customers, and your service locations.
The financial condition of your business determines whether it dies or lives. People want to work with a business that has a foreseeable future. A financial plan must include an income statement, balance sheet, and cash flow statement.
You must also consider adding financial data and projections. Forecast your cash-flow statement to identify gaps or cash outflow so you can adjust operations where necessary.
Register Your Appliance Repair Company
Before getting a license, you must first choose a legal structure for your business. The options include a sole proprietor, partnership, LLC, or corporation. Federal law requires everyone handling refrigeration systems to have certification from the Environmental Protection Agency (EPA). Most appliance repair businesses handling small appliances with refrigerants obtain Type 1 certification.
In some states, you must obtain a contractor or mechanical license to handle commercial equipment. You may also obtain a license at the local or county level. Getting this may require submitting a recent passport photo, proof of residence, and business location. You must get a seller’s permit if you wish to sell parts.
An Employer Identification Number (EIN) is mandatory after registering with the Internal Revenue Service (IRS). This is necessary when having employees or wishing to establish a partnership. Obtaining the EIN is easy on the IRS website and takes only a few minutes.
Get License And Permits
Each state, country, and the city has particular laws, rules, and ordinances regarding appliance repair businesses. It’s best to find out what applies in your state when you begin operating. After discovering the requirements for how do I start my own appliance repair business, you’ll have to fill out paperwork and submit it to the relevant authorities.
In Texas, residential appliance installation contractors need a license to do their work, including pool-related installation and maintenance. Contractors must employ someone with a Residential Appliance Installer license. The license may be assigned to one contractor unless you own more than 50% of the installation business contracting business.
Independent appliance repair contractors need a California Bureau of Electronic and Appliance Repair license. The license protects consumers from inexperienced, dishonest, and disreputable companies. These may prey on unsuspecting homeowners in vulnerable situations.
Read more: How to start a certified appliance repair business.
Get Business Insurance
Owners of appliance repair businesses must be prepared for common hazards such as physical injury, property damage, or unforeseen disasters. Having the right insurance cover will keep your business safe from these risks.
Insurance policies for appliance repair businesses include:
Commercial Property Insurance
Whether you rent or own your workspace, you need specialized equipment for appliance repairs. Recovery is difficult and costly if an unexpected disaster strikes and destroys your tools.
Commercial property insurance protects the value of your business equipment by replacing or repairing them in case of a fire, explosion, storm, or other covered risks. The insurance also covers the following:
- Property on the premises
- Leased or owned premises
- Property of others under your care
General Liability Insurance
This is necessary for all businesses, especially if you repair appliances at customers’ homes or business premises or have a workshop accessible to the public. General liability insurance covers third-party bodily injury and property damage claims. The insurance also covers slander, libel, and copyright infringement.
General liability insurance includes cover for completed operations and products. It also includes property damage and bodily injury away from your premises caused by your completed work. This may result from a technician using the wrong part to fix an appliance, damaging the customer’s property.
Commercial Auto Insurance
You need this insurance if you offer a pick-and-drop service or send technicians to perform repairs at clients’ locations. Commercial auto insurance is also essential if you have or lease vehicles for business use. It covers bodily injury and property damage when your driver is at fault during the accident. The cover also includes the vehicle value if damaged during a collision.
Inland Marine Insurance
This policy covers your equipment that doesn’t remain at a fixed location and is not covered by commercial insurance. The insurance protects tools and equipment you need to move periodically or store at the clients’ location. Inland marine insurance is essential since you may regularly move equipment to clients’ premises, especially when handling large projects.
Appliance repair business owners need this policy since they take customers’ items into their possession to repair them from their workshops. Customers expect to return their items safely, and you’re liable for any damage. You must protect customers’ appliances from thieves, damage, or getting destroyed. Balle’s insurance policy is essential to protect you from such risks.
Commercial Crime Insurance
You also need protection in case of burglary, fraud, forgery, theft, or other crime leading to losing customers’ appliances. Commercial crime insurance covers internal or external crime. Working at various locations increases the chances of having equipment stolen or employees contributing to a loss of clients’ items. The crime insurance policy will cover you for such losses.
Workers’ Compensation Insurance
Lastly, you need cover for your employees. Every business with a team needs worker’s comp insurance/ it covers medical expenses, rehabilitation after injury, and lost income. The policy also offers benefits after death and funeral costs.
Appliance repair businesses need this insurance since the job may require handling large commercial equipment. Even working from clients’ premises increases the chances of risks. The regulation for this insurance varies by state, so ensure to know the requirements in your service location.
There are many risks in your industry and having appropriate insurance is essential. Consider your business needs to buy the right policies to protect you from common liabilities. This will give you peace of mind even during unexpected disasters.
Open a Business Bank Account
You must open a bank account when ready to spend or accept money in your appliance repair business. The business account makes you comply with legal requirements and benefits your customers too. You may get a savings account, merchant account, checking account, or credit card account.
The benefits of a business bank account include the following:
- Separates business funds from personal funds
- Merchant accounts secure customers’ information
- Allows paying using credit cards and checks
- Makes authorizing employees to handle payments safer
- Prepares you to get a line of credit
- Credit card accounts establish a credit history
When selecting an account for your business, mind their introductory offers. How much is the interest for a checking or saving account? How much are the transaction fees for using the account? What is the acceptable minimum balance on the account?
You need an EIN, business formation documents, a license, and ownership agreements to open a bank account for your business.
The success of your appliance repair business depends on your team. You need to find the right people to help repair, install, and maintain customer items. There are various platforms where you can let people know that you’re hiring, including:
- Your website
- social media channels
- Ads in newspapers, radio, and TV
- Hiring agencies
- Online job boards
- Local training institutions
- Apprenticeship programs
When you receive applications, you must be keen to choose the best ones for the job during the selection process. You must do a background check since you’re to entrust the technician with your clients’ appliances.
Additionally, you must ask the right questions before hiring, including:
- What appliance/brands do you work on?
- Do you have experience in installation and repairs?
- What is your last place of employment?
- Do you have a driver’s license?
- Do you have an EPA license to undertake sealed system work?
- What is your nearest area?
Ideal Skills For Appliance Repair Technicians
Your team can make or break your appliance repair business. Therefore, you must understand the ideal skills your technicians must have. These include:
Expertise in Handling Various Appliances
Great technicians have vast knowledge in handling various appliances, including dishwashers, micro ovens, driers, washing machines, and more. These can be backed with certifications in handling particular appliance brands that potential customers are likely to have.
The technicians must understand the parts and components required to repair various appliances. It allows for locating the cause of the problem and recommending a solution. This knowledge is helpful since some customers may ask the technicians for the cause of the problem and tips on how to avoid it.
Plumbing and Electrical Knowledge
Repairing and installing appliances is a complex field that requires the possession of some technical skills. Although plumber or electrical certification isn’t necessary, your technicians must have the skills to open and fix any plumbing or electrical appliance. Understanding wiring helps connect various components. It requires identification of how they work and any issues that may arise.
Handling Various Tools
Appliance technicians may encounter various issues on the job. So, they must understand how to use the right tools for each job. The technician must understand how to troubleshoot and fix a problem using the right tools. Knowledge of electrical and plumbing systems is handy in determining an appropriate solution.
Your appliance repair must pride themselves in possessing more than technical skills. They must be tech-savvy to use appliance repair software to make the job easier. Computer skills are essential since the technicians will regularly have to search for replacement parts on manufacturer’s websites or technical information.
Managing customer relationships is essential for appliance repair technicians. Your technicians must have stellar customer service skills and ensure each task is completed beyond the customer’s expectations. This encourages low customers who may recommend their friends and family to your business.
Understanding Safety Procedures
Safety is essential, especially when handling electrical systems. Your appliance repair technicians must be familiar with safety procedures while handling each task. It keeps them safe from injury and the customer’s item from damage.
Marketing Your Appliance Repair Business
Being confident about your services and having a great team isn’t enough to grow an appliance repair business startup. You must make an effort to reach a broader market and convince potential customers to use your services.
Here are some ideas to market your appliance repair business.
Have A Website
You need a website to make customers find you easily. It must be mobile-friendly with a blow where you share helpful tips. The website will improve your rankings in Google and establish your online presence. Ensure to keep your website and blog regularly updated to increase the chances of getting noticed by customers. This is essential since 46% of Google searches bring results for services near customers.
The site must include your opening and closing hours, address, and repairs you do. Other things to include on your website include:
- Calls to action
- Industry-specific organizations where you have membership
- Live chat feature
- Your achievements
- Big clients
Use Social Media
With over 302.35 million on social media today, leveraging it to market your appliance repair business is a great idea. A Facebook page allows for sharing tips, images, and guides with followers. You can also invest in sponsored ads to rank for various services.
Your page will become a source of reference for appliance issues and solutions. You can also use the page to ask people needing your services to get in touch. Videos are highly influential today, and having a presence on YouTube and TikTok allows sharing tips and your work process with potential customers.
Collaboration With Other Business Owners
Close relationships with industry people can help grow your appliance repair business startup. Collaborate with people selling appliances for referrals when customers need installation, repair, and maintenance. Other business owners can call you when overwhelmed with work.
Using a mix of marketing strategies can help grow your appliance repair business. The good thing is that you’re not limited to the number of strategies you can use.
Starting an appliance repair business is a viable idea today. The market is lucrative, given the growing reliance on appliances that need repair at some time. Apart from having a solid team and top-notch customer service, appliance repair software such as Field Complete is essential to the success of your business. It streamlines dispatching, invoicing, reporting, communication, and estimation. Sign up today to see how this software will drive more profit to your appliance repair business.