The activity of a car repair shop in the Czech Republic is a craft trade, which requires proper specialization (education and/or work experience) in the field.
A car repair shop can be opened as a sole proprietorship (OSVČ) or any type of legal entity in the Czech Republic.
In the context of taxation, it should be noted that the activity “Repair of road vehicles” (Oprava silničních vozidel) allows for an 80% lump-sum expense ratio on revenue. Consequently, in most cases, it will be more advantageous to run this type of business as a sole proprietorship than as an s.r.o. (limited liability company), where you would have to report actual business expenses.
The tax rate for a sole proprietorship is 15%; for an s.r.o., it is 19%.
In any legal form of activity, an entrepreneur is obliged to register for VAT upon reaching a turnover of 1 million CZK (over the last 12 months, regardless of the calendar year).*
Marketing: The main sales channel for a car repair shop is recommendations from satisfied clients (word-of-mouth). But before a good reputation brings you enough clients for 100% capacity, you should consider what other sales channels to use.
The best options would be the following:
- A website with a description of services, a price list, and a contact form, and if possible, a booking system for standard services. This is not a sales channel, but a necessity.
- Registration on various Czech service portals. For example, nejremeslnici.cz.
- If your resources allow working with the B2B segment, you should prepare an individual commercial offer, propose advantageous services for partners, and offer cooperation to companies that have their own small vehicle fleet.
- Local advertising is an excellent way to make yourself known. A banner, an ad in local district newspapers that are delivered to residents for free. Such an ad is inexpensive but can bring you target customers quite quickly.
- Paid advertising on Google or Seznam, especially “in season.” If you offer a tire changing service, the ads should be run for a month before and throughout the entire season.
- Working with regular clients. Very few repair shops have even a simple CRM that would store and sort client data, allowing you to send out newsletters about your services. If you have a website, it will do this work for you almost automatically. Remember – acquiring a new client is three times more expensive than retaining an old one!