Starting A Mechanic Business

The consistent demand for automotive repair and services can make a mechanic business a rewarding venture. Last year, there were more than 4 million registered vehicles in all of New Zealand. With that many cars on the road, a lot of people are going to need a good, reliable mechanic. So, if you’re thinking of starting your own mechanic business, you could be at the beginning of something great. Before you pick up any tools though, there’s a number of legal considerations that need to be taken care of.

Should I Have A Business Plan For My Mechanic Business?

Absolutely! In fact, a business plan is one of the first documents you should have prepared before starting any kind of business.

A well thought out business plan can be a helpful roadmap for success, it’s always a good idea to put in the time and effort to create one. Your business plan should outline things like your goals, services, target market, financial planning, marketing strategies and legal considerations. Conduct thorough research to gain a better understanding of your market and industry so you can enter the business world well prepared.

How To Start A Mechanic Business

Starting a mechanic business isn’t just something you can jump into tomorrow- it requires careful consideration and planning. We’ve put together a few elements to think about when starting your mechanic business. It’s important to get these things right, as it will lay the foundations for your business and play a role in its potential success.

Qualifications

In order to become a mechanic, you’ll need to attain the right qualifications. In New Zealand, most mechanics have a National Certificate in Motor Industry (Automotive Heavy Engineering). After getting qualified, there’s usually a training or apprenticeship period that needs to be completed. Along with the certificate we mentioned, there are other automotive courses you can look into if you want to further grow your knowledge and expertise.

Once you’ve gotten the right qualifications, it’s important to make sure you're properly licensed to work on cars- we’ll talk more about that later.

Business Registration

Registering your business is an essential step in getting your mechanic business off the ground and running. You can do this by obtaining a New Zealand Business Number (NZBN) if you plan on operating your business as a sole trader. It’s relatively easy and can be completed online.

If you plan to set up a company, you'll need to register with the New Zealand Companies Office, which involves more legal requirements as the company will be a legal entity on its own. Seeking the help of a legal professional can be beneficial for navigating this process and ensuring compliance with all the rules and regulations. 

Finally, if your business name differs from your personal or company name, formal registration of the business name is necessary. Once the registration is complete, the next step is to make sure you’ve got all the right legal agreements in place.

Legal Documents

Getting qualified and registering your business are necessary steps to setting up your business. However, once your business is up and running, you need to think about ways to protect it. One of the best ways to do this is by having the right legal agreements in place. The exact documents you need will depend on your business but we’ve listed a few you might want to consider:

• Service Agreement- A terms and conditions between you and you customers
• Employment Agreement- A formal contract setting out the rights and expectations between you and your employees
• Supply Agreement- Ordering in equipment and supplies? It’s important to have a written agreement in place with your supplier so you can be covered in case something goes wrong
• Privacy Policy- Having a website for your business can make you more accessible to customers. However, if your collecting their information then you're likely to be legally required to have a well drafted privacy policy in place
• Staff Handbook- Mechanic garages need to follow a lot of safety procedures and instructions to minimise the risks. Having everything set out in a concise and clear handbook can make things easier for you and your staff

Consumer Guarantees Act Obligations

When you provide a service to the community as a business, then you're going to be bound by New Zealand Consumer Guarantees Act obligations. The Act is there to protect consumers from unfair business practices and make sure there is a uniform standard New Zealand wide. You’ll need to look out for things like deceptive conduct, clearly communicating expectations and unfair contract terms. Not complying with Consumer Guarantees Act obligations can lead to expensive fines or other penalties- it’s best to talk to a legal expert about your duties and obligations to make sure you get them right.

Do I Need Any Mechanic Business Licences?

Yes, there’s a good chance you’ll need to get a license before you can start working on a customer's car. The requirements will differ based on the region your business is in however, most regions need all mechanics to have a motor vehicle tradesperson certificate and a motor vehicle repair licence. It’s important to carefully research what certifications and licences you will need, then go through the process of applying for them. Once you’ve officially obtained all the necessary licenses and certificates, you have the green light to start working as a mechanic.

Is It Illegal To Run A Mechanic Business From Home?

You’ll need the right space to run a mechanic business from home. While there’s no clear regulation that directly says you cannot run a mechanic business from home- there’s a lot of factors to consider when opening up a mechanic business. It’s crucial to look at each of those requirements (they're likely to differ based on where you live) as well as any local council or zoning regulations. From there, assess what the best possible space will be for your mechanic business.

Can I Start A Mobile Mechanic Business?

Yes! Mobile mechanic businesses are great not just for the mechanic but for customers that might be stranded or want the convenience of someone coming to them. For a mobile mechanic business, you’ll need to follow the same requirements as a stand still mechanic business. Additionally, it’s important to look into any extra legal requirements such as zoning regulations or any local council laws that may apply. Moreover, you’ll need to make sure you have the right vehicle that is properly equipped (and registered) to be operating as your mobile mechanic vehicle.

Next Steps

Starting your own mechanic business can be a great business opportunity, however it;s important to carefully plan things out and take care of all the legal aspects first. To summarise what we’ve discussed:

• Starting a mechanic business requires obtaining the right qualifications, such as a National Certificate in Motor Industry (Automotive Heavy Engineering)
• Business registration is essential, requiring a NZBN for sole traders and registration with the New Zealand Companies Office for setting up a company
• Legal documents, including service agreements, employment agreements, supply agreements, privacy policies, and staff handbooks, are crucial for protecting the business.
• Mechanics must comply with Consumer Guarantees Act obligations to protect consumers from unfair business practices and maintain a uniform standard
• To start a mechanic business, licenses such as a motor vehicle tradesperson certificate and motor vehicle repair license may be required, varying based on the region
• Opening up your own mechanic business requires consideration of local council and zoning regulations
• Mobile mechanic businesses are practical and convenient- though you will still need to follow the same legal requirements along with additional considerations such as proper equipment and registration of the mobile mechanic vehicle

If you would like a consultation on starting a mechanic business, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.