Starting an Appliance Repair Business on a Shoestring

When I started in appliance repair, I had very little money, so I’m going to tell you the absolute minimum I think you need to get started running service calls.

THE SERVICE VEHICLE:

Although it is a big advantage to have a traditional service vehicle like a truck, van, or even SUV, I will tell you it is not absolutely necessary. If you don’t have a truck or van already, you may not need to buy one right away.

As I said, I was really broke when I first started.  I didn’t have a truck and could not afford it, so I worried about this, but I had no choice.  I originally ran service calls right out of my four door sedan. I know it doesn’t look as established as a truck, but I never had a single customer doubt my abilities once I got inside the door.

I filled my trunk with tools and inventory (as shown in the photo) and I also neatly filled my back seat with stuff. I think it looked to them like I was a subcontracted technician who worked on overflow business for the company. No one ever said anything negative to me or to the office about it, and by the time I was done with the repair, they always wanted extra business cards to stay in touch and share with others.

If you already have one, the advantage of a nice truck or van is obvious, and will certainly help establish a professional image. Adding magnetic door signs at about $100 is a very effective way to help promote and brand your image, well worth the money and will also get you extra business.

Be sure to declare a portion your car or truck as used for business purposes with you insurance company. If you have a claim and they investigate and find you were out on a service call, they will deny your claim. I was able to add my vehicle to my existing policy with no increase in premium. Results will vary from state to state.

INVENTORY:

Inventory is a whole subject unto itself, but I started out with about $250 worth of the most basic parts and tools mainly based on the list from Uncle Harry.

I tried to carry the common things that the customer would expect me to have on hand like, fuses, thermostats, belts and switches, with a few other frequently needed items peppered in like motor couplers, universal inlet valves, and defrost timers.

Depending on the appliance parts vendors in your area, and turnaround times ordering online, you will be surprised how little you need to stock at first. Let the local parts house or online supplier hold your inventory for you until you get more established.

You will eventually get tired of running to the parts house or waiting for online parts to be shipped for your most frequent repairs, and making two trips to the customer’s home, and start holding more inventory yourself.

OFFICE SUPPLIES:

I started out with 500 nice, glossy, full color, two sided business cards from nextdayflyers.com for around $30 shipped, 500 carbonless invoices from carbonlessondemand.com for around $50 shipped, and self sticking magnetic business card blanks (in bulk) at about 30 cents each.

I also use an HP Netbook with mobile broadband for an on-site library of technical manuals and online support (any laptop or portable will do), and mobile broadband costs $50 per month.

I can’t imagine going out on calls without being able to read full sized manuals and wiring diagrams and geting on the internet for downloads. A must have, in my opinion.

MARKETING AND ADVERTISING:

All of my marketing and advertising is via the internet using free search site business listings (Google, Bing, Yahoo, etc.) (Check out this article for more information.).

I do not buy local print advertising, phone book advertising (which is expensive and considered not worth the money by most service technicians), door hangers or signage.  I’m not saying that there are not some viable things to do to get your name out there, I just don’t use them in my business. A strong internet presence is all that I have found necessary to get things going.

My wife is skilled at website design and internet marketing (that’s how I have this nice blog site!). If you feel you want to try doing your own website design and management, Lunarpages.com has some great deals for annual hosting, domain name registration, email, and website design templates.  If not, it’s a tricky one for me to answer because, luckily, I have never shopped for website design or SEO (search engine optimization).

Good SEO is essential to drive traffic to your website, but free reviews from your satisfied customers are worth their weight in gold, and get you better search rank than anything else you can do!

LEGAL STUFF:

Three important items are license, insurance, and business entity. I would not recommend attempting this business without all three. Get a business license from your local government – mine cost about $50. I have a business owner’s policy for $1,000,000 per occurrence in general business liability insurance which costs me $450 annually.

You will need to decide if you want to be a corporation or LLC (not all states offer this choice).  My LLC cost $100 to set up, and I did it online in one day by going to the Secretary of State website for my state.

Carefully consider before choosing a corporation over an LLC. The paperwork and additional accounting services at tax time made this an unattractive choice for me.

I would suggest you NOT choose to operate as a DBA (doing business as). Spend the money and set up a corporation or LLC to protect your family from the direct consequences of events within your business. Remember you are going into other people’s homes, best to be on the safe side!

BOTTOM LINE:

I spent, bare bones, around $1,000 to set up my business and don’t regret any of the choices I made in the process. Good luck and let us know how it’s going!

24 Replies to “Starting an Appliance Repair Business on a Shoestring”

  1. I would very much like to know how you acquired the Warranty calls >? are you referring to service contracts with manufactures or Home Warranty companies .. would you have a list of contact info for these thank you for your time Rob

  2. Hey I am just wanting to know what the list is for most common parts you need on your can just a basic inventory. I am a tech for Hobart which repairs commercial appliances so I don’t need to buy uncle Harry’s plan I just want to know what must have common stock would be for your van starting out?

  3. These days learning any trade is easier than what is was in the old days. You can find everything online without much searching. Great blog by the way, full of good information.

    1. Hi Nico – Thanks for the kind words! No kidding – my whole business is internet based, from advertising to parts procurement. Sure glad it’s changed. Good luck to you!

    1. Hi Eric – Good question! At the very start, I had to study for each of my calls beforehand, so I only booked about 3 per day. When I got more experienced, I could comfortably run about 6-8 per day five days a week, any more than that and I couldn’t sustain the pace over a long period of time. Remember, not every call completes on the first visit, so you have to include follow-ups into the schedule. My goal is not to make the most money possible, so I might be different than some techs. My dream is to work when I want and still make my weekly target. Right now, I’ve actually dialed back to 2-3 new calls per day, 1 or 2 follow-ups, and I only work 4 days a week. Wishing you success as well!

  4. Hey, I enjoy your blog. I am wanting to go out on my own I have 9years experience on everything from whirlpool,GE,frig,ect…to subzero,wolf,dacor,Viking,Bosch,ect… Did you find that the calls came quick when you started especially with warr? I don’t have a lot of money to get started so any tips you have would be appreciated. I’m not worried about the experience I know I’m ready I just hope it really takes off. Thanks..

    1. Hi Chris – When I first started, I was in a remote rural area where there was a shortage of technicians, so my customers were just glad to have a warm body! When I moved to the city, I used paid leads and warranty companies to keep the phone ringing while I was waiting for my free leads (Google, Bing, Yahoo, Yelp, etc.), repeat customers and referrals to build up. I did a LOT of home warranty work, which was a ton of free leads but there’s a limit to how much you can charge if you want them to keep calling you and not some other company on their list. I really didn’t worry about that in the early days because I was charging the lowest prices in town anyway just to get business. That works really well too, I converted almost every call that came in just by undercutting my competitors by 10%. It can be scary just hanging your shingle out there, but low prices, warranty co’s and paid lead services are always a safety net until you get established. Good luck with starting your business!

  5. Love your blog!!!!! Just ordered Uncle Harry’s complete course recently to start my own Appliance Repair Business. Just curious if you ever got some appliances to do actual hands-on training before going out on calls? Or did you just do book and video training? THX!

    1. Hi Don – Thanks for the kind words and congratulations on starting your own appliance repair business! Harry’s program will get you running calls as quickly as possible. As far as hands-on goes, at first I considered buying used appliances on Craigslist to practice on, but then I asked a couple of used appliance shops if they needed repair help free of charge, and I found one that said yes. This appliance shop had a 1 year warranty on units he sold, which I fixed for him for free, but he didn’t service units he didn’t sell, so I got all his referrals. Whenever I had a repair to do, I just studied Harry’s materials and the service manual for the particular appliance. When I moved to another city a few months later, I hung my own shingle, and my business took off from there. I wish you the very best of luck!

  6. I really appreciate your site and I’ve learned a lot from reading your posts. But I have been wondering, do you accept credit card payments in your appliance repair business? If so, how do you do it? What card reader do you use?

    1. Hi James – Good question – yes I accept all major credit cards, including Discover and American Express because I’ve found that I lose far more money in sales by not making payment easy and immediate than any service fees. I use Authorize.net online payment processing gateway and no card reader is required, you just input card number, expiration date, and some other customer info into an online form. Goes right into you bank account you setup with the service. Another tip, I don’t keep customer credit card info on file for security reasons, I just ask them for it each time. Hope this helps – best of luck!

  7. Appliance Repair Startup, I have tried to click the link for the beginer parts list and it doesnt show it. can you share with us what at the parts you would carry with you, ie belts and elements.

    1. Hi Derrick – I got my basic inventory list from Uncle Harry’s course, but I believe you can buy that manual separately. Click on “Home Study Course” and ask Harry which manual he recommends for stocking inventory. Hope this helps!

  8. Which uncle Harrys course did u use. I’ve been doing appliance repair for about 8-10 years now. I’m already in the process of getting my llc and insurance going. Do u use an online program like Marcone for all your parts needs? Also what computer program are u using?

    1. Hi Chris – Good questions! I bought the biggest package Harry had at the time, which included all the videos and manuals, the Nephew Club and his support network of technicians. My city doesn’t have Marcone locally, but I have commercial accounts with my local parts houses, and with all of my online suppliers (Appliance Parts Pros, Sears, GE, RepairClinic, etc.). For scheduling service calls, I just use Microsoft Outlook because it’s quick and easy. I tried keeping my customer database in Microsoft Access, but when I’m out in the field running calls I found I hate to boot up my laptop to do data entry, so I switched to a spiral-bound notebook, and believe it or not it works better for me. Congratulations on starting out on your own – with your experience you will have a real leg up, and Harry can also help you with running the business side.

  9. Now more than ever before consumers are concerned about repairing their appliances rather than replacing them. You can quickly learn this business and begin making money within a short period of time.

    1. Hi Mike – Nice to hear from someone who has done it too. The key phrase is “short period of time.” It can take years to apprentice in HVAC, and licensing is required for trades like electrical or plumbing. I started from zero, with no technical background, and was making money in appliance repair within 30 days. Thanks for the comment!

  10. Thanks for this great website and blog! Your success has inspired us….we opened MaRs Appliance Repair in September of 2011 and are generally doing OK. We also took Uncle Harry’s A.P. Course and signed up for the Wizard and have been very, very pleased. We agree, we could not have started without it. We have one question: You say in #6 of your blog (“How to Start an Appliance Repair Business”) that you charge a flat service call fee of $79 plus a 15% mark-up on parts….what does this mean? Do you mean that every service call whether it is an igniter or a door gasket or whatever, you have a flat fee of $79? Do you use the Blue Book Job Rate Guide? Also, where are you located? We are in Los Angeles in the Pasadena area. Thanks again for the wealth of information you have provided for those of us who are newbies! Fred

    1. Hi Fred, thanks for the kind words – good to hear from another person who understands it would have been very hard to accomplish so much so quickly without Uncle Harry’s course. In response to your question, yes my flat fee never changes regardless of the time it takes to complete the repair. Customers do like the flat fee pricing because it assures them that things won’t escalate once I have started the work. I actually use a two tiered pricing model according to the complexity of the repair, $79 for low/medium complexity and $99 for high complexity, but most repairs fall in the first category. Before I moved to the city, I was working in a small, rural area with a slow economy, and I used to waive my diagnostic fee of $39 if the customer went forward with the repair. Now that I have moved to a small metro area in the south, way bigger than where I was before, I am able to charge the diagnostic fee in addition to the repair. I know my rates are below what Uncle Harry recommends, but you can only charge what your market will bear. You should be able to get top rates in Pasadena, California. I wish you the best, and continued success to your business!

      1. Hi my names Ken and I to am taking Uncle Harry’s course. I love your blog it has alot of good information, but I to was wondering where you are located and what the name of your business is.

        1. Hi Ken – I’ve thought about revealing my identity because it would certainly add proof of my success to the blog, but I have decided against it for now because I still only have a couple years experience in the appliance repair business. When I have a few more years under my belt it won’t matter if my customers, but especially my competitors, know when I got started. I can tell you I’m located in a city with a metro population of about 1.5 million people, average cost of living, and about 6-8 serious local competitors, most of whom I know personally and get along great with. Congratulations on hooking up with Harry – you couldn’t have chosen a faster way to get into the appliance repair business!

  11. Hi there, I went through the company you advised for liab. Insurance and it was more than twice 450 per year? And that’s for 500,000. I understand rates can be different from area to area but can you explain how you are able to get such a low rate? Thanx

    1. To be honest, I really can’t tell you why that is specificaly because so many factors affect an insurance quote for each individual situation. I am surprised that you got such a high quote. My experience has been that insurance rates can be kind of unpredictable. My agent has gotten me great rates on some things and terrible rates on others, so I always have to get multiple quotes – best of luck finding a good deal!

Leave a Reply

Your email address will not be published. Required fields are marked *