My plan

Start a Auto repair Business in Minnesota

Auto repair runs on trust, accurate diagnosis and repeat customers. You can start as a mobile mechanic with a well-equipped van or lease a bay with a lift. Environmental rules for refrigerant, used oil and other fluids apply either way, so plan for them from day one.

Reviewed November 5, 2026 · Sources linked inline

Minnesota requirements for this business

  • In Minnesota, auto body and automotive repair labor is not taxable when it is separately stated from repair parts on the invoice. [source]
  • Parts used to repair or service a vehicle are taxable to the customer; shops can buy those parts tax-free by giving suppliers Form ST3 claiming the resale exemption. [source]
  • Tools and equipment used on multiple vehicles are taxable to the repair shop. [source]
  • Rustproofing and undercoating, and motor vehicle washing, waxing and cleaning services, are taxable in Minnesota. [source]

Statewide steps for every Minnesota business — forming an LLC or registering a business name with the Minnesota Secretary of State — are on our state licensing directory.

FirstBizGuide is not a government agency: any license or registration fees are paid directly to the agency named in each source. These are the Minnesota facts we have verified so far, not a complete list. City and county rules vary — check with your local government before opening.

Startup costs

We haven't found a reliable published cost range for this business, so we don't show one. Costs vary widely by market, equipment and whether you buy new or used. Plug your own quotes into the worksheet:

Open the auto repair cost worksheet →

SBA 7(a) loans in this industry

General Automotive Repair (NAICS 811111): 2,616 loans approved in FY2024–FY2026. Median loan $184,400; middle half $50,000–$620,250.

Loan size is not startup cost — these loans also fund acquisitions, real estate and working capital. Full breakdown and caveats →

How much competition is there?

Census industry: General Automotive Repair (NAICS 811111)

In Minnesota: 1,730 employer establishments (2023) and 2,856 businesses without employees (2024). Nationwide: 84,859 employer establishments (2023) and 225,471 businesses without employees (2024).

The count of businesses without employees is for the broader Census group “Automotive Mechanical and Electrical Repair and Maintenance” (NAICS 81111), so it includes related businesses, not only this one.

See counts for your county → Counts aren't a measure of saturation — see the caveats on the tool page.

Equipment and supplies

  • Vehicle lift (shop) or floor jack and stands (mobile)
  • Professional hand and power tool sets
  • Diagnostic scan tool with current software
  • Refrigerant recovery and recharge machine
  • Labeled used oil containers and spill kit
  • Air compressor and impact tools
  • Shop management software for estimates and invoices

Licenses and registration

  • Anyone who repairs or services a motor vehicle air conditioning system for payment or bartering must be trained and certified under Section 609 of the Clean Air Act by an EPA-approved program. [source]
  • Under EPA used oil rules, businesses should label used oil containers and tanks "Used Oil," keep them in good condition, take steps to prevent leaks and spills, and keep used oil separate from solvents and other hazardous waste. [source]
  • Used oil shipped off site must go with a transporter that has an EPA ID number, and state rules may be stricter than federal standards. [source]
  • Some states register or license auto repair shops or require written estimates before work starts — check with your state consumer protection or motor vehicle agency.
  • Check your city or county for a business license, zoning for automotive use, and any fire or environmental permits for the shop.
  • Mobile mechanics should ask whether local rules limit doing repairs at customer homes or in parking lots.
  • Get a free Employer Identification Number (EIN) from the IRS if you will hire employees or form an LLC or corporation. Beware of sites that charge for this. [source]
  • To find your state's business registration office, use the SBA's state-by-state registration lookup. [source]

Insurance to consider

  • General liability
  • Garagekeepers coverage for customer vehicles in your care
  • Commercial auto for service vehicles
  • Business property and tool coverage
  • Workers' compensation once you hire

Get quotes from several carriers or an independent agent; coverage needs depend on your contracts, state and staff.

Financing options

  • SBA 7(a) loans — the SBA's main guaranteed loan program, made through participating lenders. [source]
  • SBA Microloans — smaller loans delivered through nonprofit intermediary lenders. [source]
  • SBA Lender Match — a free tool that connects you with interested SBA lenders. [source]
  • Free counseling from your local SBDC or SCORE chapter can help you build the business plan lenders ask for. [source]

Estimate payments with the loan calculator, then check runway with the cash flow projection.

Ongoing operating expenses

  • Rent and utilities
  • Parts and supplies
  • Technician wages
  • Diagnostic software subscriptions
  • Fluid and waste disposal
  • Insurance
  • Marketing

Use the break-even calculator to see how many jobs or sales cover them, and the employee cost calculator for staffing.

Common mistakes

  • Starting work without a signed estimate
  • Underpricing labor compared with local book rates
  • No plan for storing and recycling used oil and fluids
  • Skipping garagekeepers coverage
  • Buying every specialty tool before you know your niche

Finding customers

  • Google Business Profile with reviews
  • Fleet and small-business maintenance accounts
  • Referrals from tire shops, detailers and dealers
  • Maintenance reminders to past customers

Startup checklist

Ticks are saved on this device and appear on My plan.

Compare with other businesses

Sources