Small Engines, Big Profits: Starting Your Small Engine Repair Shop

Starting your small engine repair business? Here are the most vital considerations:

1. Skills — You should be mechanically inclined and enjoy troubleshooting and fixing problems. You’ll need to understand how small engines work and be able to diagnose and repair a variety of issues.
2. Tools and equipment — You’ll need a variety of tools and equipment to diagnose and repair small engines. This can be a significant investment, so you’ll want to carefully consider what you’ll need to get started.
3. Workspace — Decide whether you’ll run the business from a dedicated shop or operate from a home garage or van. 
4. Certification — Get the Equipment & Engine Training Council (EETC) Principles of Small Engine Technology Certification to enhance your credibility. 
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Experience — While certifications demonstrate knowledge, many employers value hands-on experience. Look for opportunities to gain practical repair experience alongside any certification path you choose.

You May Also Wonder:

Can a small engine repair business be profitable?

A small engine repair business can be very profitable. You just need the skills to do great work, and a passion for what you do, and success will follow.

How can I learn to be a small engine mechanic?

You can go through an online small engine repair program at a place like Penn Foster. The program costs about $900 and it takes five to nine months.

What is the most common problem with small engines?

The most common problem with small engines is often related to fuel-related issues. This includes problems with fuel quality, fuel filters, carburetor clogs, or fuel line blockages. Other common issues may include spark plug problems, ignition system malfunctions, or issues with the air filter.

How can I establish a reliable and trustworthy reputation for my small engine repair services?

To establish a reliable and trustworthy reputation for your small engine repair services, focus on providing high-quality work and excellent customer service. Ensure that your technicians are experienced and properly trained in small engine repairs. Communicate clearly with customers, explain the repairs needed, and provide accurate estimates. Use quality parts and equipment for repairs. Offer warranties on repairs to instill confidence in your customers. Collect and share positive customer reviews and testimonials. 

How can I differentiate my small engine repair business from competitors in the market?

Specialize in specific types of small engines, such as lawn mowers, generators, or chainsaws, to establish expertise in a niche market. Offer additional services such as equipment maintenance, tune-ups, or preventative maintenance programs. Provide pick-up and delivery services for larger equipment or offer mobile repair services for on-site repairs. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a small engine repair business has pros and cons to consider before deciding if it’s right for you. 

Small engine repair industry trends

Industry size and growth

There is no information available about the small engine repair industry since most small engine repair businesses are small, private companies. However, this will detail employment information in the industry. 

• Industry size and past growth – From 2010 to 2020, employment opportunities for small engine mechanics increased 20%.((https://www.statista.com/statistics/255679/employment-of-small-engine-mechanics-in-the-united-states/))
• Growth forecast – From 2020 to 2030, small engine mechanic employment opportunities are expected to increase 9%.((https://www.bls.gov/ooh/installation-maintenance-and-repair/small-engine-mechanics.htm)) 

Trends and challenges

Trends in the small engine repair industry include:

• Small engine equipment rentals are on the rise, presenting an opportunity for small engine repair businesses to service equipment rental companies.
• Small engines are increasingly being used in industrial settings, which presents another potential customer base for small engine repair firms. This might include electric motors used in robotics. 

Challenges in the small engine repair industry include:

• The availability of countless instructional videos on YouTube may curb demand for small engine repair mechanics.
• The evolving technology of small engines creates a need for small engine repair mechanics to update their skills. 

Demand hotspots

• Most popular states – The most popular states for small engine mechanics are Alaska, Louisiana, and Arizona.((https://www.zippia.com/small-engine-mechanic-jobs/best-states/#colorado))
• Least popular states – The least popular states for small engine mechanics are Illinois, Kansas, and Colorado. 

What kind of people work in small engine repair?

• Gender – 4% of small engine mechanics are female, while 96% are male.((https://www.zippia.com/small-engine-mechanic-jobs/demographics/))
• Average level of education – The average small engine mechanic is high school educated.
• Average age – The average small engine mechanic in the US is 45.1 years old.

How much does it cost to start a small engine repair business?

Startup costs for a small engine repair business range from $1,800 to $4,600. The largest cost is for a website to market your business. You also need a handful of tools. 

You’ll need a handful of items to successfully launch your small engine repair business, including: 

• Basic hand tools
• Impact drill
• Voltmeter
• Socket set
• Spare parts including spark plugs

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100 - $300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Tools	$300 - $500	$400
Total	$1,850 - $4,600	$3,225

How much can you earn from a small engine repair business?

Small engine repair rates range from $40 to $100 per hour, for an average of $70. Your profit margin should be about 90%. 

In your first year or two, you could work 15 hours per week, bringing in $54,000 in annual revenue. This would mean $49,000 in profit, assuming that 90% margin. As your business gains traction, you could work up to 25 hours per week. With annual revenue of $91,000, you’d make a sweet profit of nearly $82,000.

What barriers to entry are there?

There are a few barriers to entry for a small engine repair business. Your biggest challenges will be:

• Having the specialized skills to repair all types of small engines
• Intense competition to stand out in a crowded market

Step 2: Hone Your Idea

Now that you know what’s involved in starting a small engine repair business it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research small engine repair businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a repair business for outdoor power equipment or a business that repairs small gasoline engines.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

Your services will depend on your skills, but your best bet is to repair a variety of items so that you have a larger market of customers. 

How much should you charge for small engine repair?

Prices for small engine repair will depend on the item and range from $40 to $100 per hour. You should aim for a profit margin of about 90%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be broad, so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook. You can also try to connect with manufacturers and equipment rental firms on LinkedIn.

Where? Choose a location from your small engine repair shop

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you might need to hire workers for various roles and may need to rent out a shop space. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Small Engine Repair Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “small engine repair” or “mobile repair”, boosts SEO
• Name should allow for expansion, for ex: “MotorMedic Small Engine Shop” over “Mower Mechanics” or “Carburetor Care Shop”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Small Engine Repair Business Plan

Here are the key components of a business plan:

• Executive Summary: Present an overview of your small engine repair business, highlighting the types of engines you’ll service, your target market, and your strategy for providing high-quality and efficient repair services.
• Business Overview: Describe the scope of your business, focusing on repairing and maintaining small engines such as lawn mowers, snow blowers, and garden equipment.
• Product and Services: Detail the range of services, including engine diagnostics, repairs, routine maintenance, and part replacements.
• Market Analysis: Assess the demand for small engine repair in your area, considering factors like the prevalence of garden equipment and seasonal machinery.
• Competitive Analysis: Compare your business to other local repair services, highlighting your unique offerings like specialized expertise or mobile repair services.
• Sales and Marketing: Outline your strategy for attracting customers, which could include local advertising, partnerships with hardware stores, or an online booking system.
• Management Team: Highlight the experience and qualifications of your team, especially in mechanics and customer service.
• Operations Plan: Describe the day-to-day operations, including the workflow of repairs, customer service processes, and inventory management.
• Financial Plan: Provide an overview of startup costs, pricing strategy, expected revenues, and profitability forecasts.
• Appendix: Include supplementary documents such as certifications, service agreements, or detailed market research that support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

 Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to small engine repair businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your small engine repair business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a small engine repair business. 

Step 8: Apply for Small Engine Repair Business Licenses and Permits

Starting a small engine repair business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your small engine repair business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as RepairShopr, Orderry, or RepairTRAX, to manage your estimates, repair projects, invoicing, and payments. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using different website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Clients are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Website Optimization: Tailor your website’s content with relevant keywords to improve search engine rankings and attract organic traffic.
• Facebook & Instagram Advertising: Utilize these platforms for targeted ads, adapting your approach to resonate with the specific user demographics of each site.
• Google Business & Yelp Listings: Ensure your business is listed and maintain an active presence with updated information and responses to reviews.
• Expert Content Creation: Craft informative and engaging blog posts about small engine maintenance and repair to establish authority in the field.
• Video Tutorials: Create instructional videos or webinars that provide value and showcase your expertise in small engine repair.
• Local Flyering: Canvas local neighborhoods and businesses with flyers, offering discounts or free service assessments to attract new customers.
• Industry Events: Attend or sponsor local events to build professional relationships and gain referrals.
• Word-of-Mouth Incentives: Implement a referral program that rewards customers for bringing in new business.
• Targeted Social Ads: Run campaigns on platforms like Facebook and Instagram, tailoring ads based on user interests and behaviors.
• Google AdWords: Invest in pay-per-click marketing to appear in search results for queries specific to small engine repair services.
• Discounts and Deals: Introduce time-sensitive discounts or bundle deals to incentivize new customers to try your services.
• Branding: Create a strong, recognizable brand image with a memorable logo, slogan, and company colors.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your small engine repair business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your small engine repair business could be:

• Lawnmower died? We’ll come fix it in a jiffy. 
• Guaranteed repair! We only charge you if we fix your broken gadget
• Top-notch motorcycle and small engine repair at your home

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a small engine repair business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in small engine repair for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in small engine repair. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a small engine repair business include:

• Small Engine Mechanics – engine repairs
• General Manager – scheduling, parts ordering, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Small Engine Repair Business – Start Making Money!

Looking to tinker with engines and make a good living at the same time? It’s totally doable. Small engine repair is a growing industry seeing increased demand, and you can make good money while helping people out of a domestic jam. Being successful will just require some skills, hard work, and a passion for what you do. 

You’ve honed your business skills, so now it’s time to get your small engine repair business off the ground and reap the rewards!