How to Open a Tire Shop — Ultimate guide
Craft Your Business Plan
If you are interested in opening your own tire shop, then there are a few steps you are going to have to take. Fortunately, you do not need to have a lot of industry knowledge and/or experience to get a tire shop off the ground. You do, however, have to have good inventory to sell to your clients. Before beginning this journey, it is always recommended that you consult with a business attorney.
A business plan is necessary no matter what field you are in, and no matter if this is your first business or your twenty-first business. Everything that you venture into requires some pre-planning so that you can preempt any hiccups or obstacles along the way.
The main components of a business plan include:
- Executive Summary. Here is where you detail what your tire shop business is all about and what your primary goals are. It’s essentially a declaration of who you are, what you will provide to your clients, and how you will go about doing that. In order to get any type of help from the bank — such as a small business loan — you are going to need a business plan, so use this section as a quick way to present the overview of your company. Discuss here what services you are going to offer as well as any short-term and long-term goals you have.
- Market Analysis. In this section, you will put forth the research you’ve done on your target market as well as the competition for your area. Is the area saturated with this type of industry? Is there only one shop in town for all of the residents? All of these components should be answered as you set forth to grow your business.
- Marketing Plan. You might be the most prepared person in the world, your designs might be flawless and eye-catching, but you are nothing without a steady client base! Your business plan will have to address how you plan on reaching your clientele and what you are going to do to get your name out there.
- Financial Projections. There will be start-up costs and revolving expenses associated with opening up your tire shop. You are going to have to pay for the building (whether you purchase it outright or rent the space); equipment; licensing and permits; taxes; salaries; and other expenses. A wheel alignment machine alone can cost anywhere from $10,000 to $34,000, and if you are looking to rent or purchase a building in a trendy metropolitan area versus a suburban or a more rural area, then the costs per month will increase. It is important to have an honest discussion with yourself about finances before you start this process.
Register Your Business Entity
Once you have crafted your business plan, you will have to decide how you want to register your business. There are a variety of classifications when it comes to this process, known as business entities. These business entities include:
- Sole proprietorship
- Limited Liability Company, or LLC
First, you should choose a name for your business that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another tire shop. One of the best elements to consider is how easy it will be to remember your business name. That way, they can spread your name around more easily and draw you some of that word-of-mouth business.
Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your business be sued, your personal assets would be protected.
Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.
Finally, be sure to secure all of the necessary business licenses that come with starting your own business. Check with your local government to determine what kinds of permits and licensing you will need. To help you navigate this journey, it is always recommended that you consult a business attorney.
Find your Space
The United States is at the top of the list when it comes to annual vehicle sales (as of 2019, we were second in the world to China with 17 million vehicles sold to U.S. drivers). Therefore, tires are in demand. Finding the right space to conduct your business is going to have a huge impact on your success.
If you are looking within a city environment, you more than likely will not have your pick of big spaces. A good majority of people living in cities use public transportation, and some of them don’t have cars at all. These will not be the clients walking through your door. Take a look around the area and try to count how many vehicle and tire shops you see. If it’s a low number, there might be a reason for that.
If you are looking in a more residential area, chances are you will be privy to more space and more clients, since people living outside of the city limits almost always need at least one vehicle per household. To make life easier for your future customers, try to find a spot with a parking lot. People will appreciate the ability to park, and they will not want to drive long distances, or else it will deter them from coming to your tire shop on a regular basis. An easy to find and easily accessible location for them can go a long way.
On your end, a bigger space in general will allow you the opportunity to store more equipment and inventory. If you plan on making repairs in your tire shop, you will need as much space as you can get, both inside and outside of the building.
Get Your Equipment
Finding a trustworthy supplier for your tires is going to be key in securing your necessary equipment. Again, people will return to your shop time and again if you give them a quality product and good service, so make sure that the tires your supplier is providing you are up to par. Check for leaks, check the pressure, and perform frequent checks on the tread depth. It is important to take your time in researching suppliers for this step.
Other equipment you are going to need to open your shop will include:
- Point of Sale system
- Floor jacks and jack stands
- Computerized machine for alignment
- Tools such as wrenches
- Air compressor for the air gun
- Buffers and drills
Expect to spend around $20,000 to properly outfit your tire shop with the necessary garage equipment, plus more with the stands and machines that you’ll also need.
Hire Your Staff
There will be a multitude of positions you will need to fill, so start the hiring process. Develop a job application, figure out the kind of employee you want for each position, and then begin your search. Keep in mind you might have to conduct the interviews yourself, but that means you will know exactly who is coming into your store.
Of course, you will want your staff to have experience or at least be willing to learn. Technicians and mechanics will make up the bulk of your staff, so if they have no prior experience, you will have to do the training.
Yes, even tire shops have to do their fair share of marketing, and with that comes a bit of creativity. It is important to craft a logo to make yourself look legitimate and credible, one that you can put on flyers and business cards to spread around the community. If you have a recognizable logo, then people will be more likely to remember you and get your name out there.
You might also want to invest in a professional website that lists your services. Let them know exactly what your services and offerings are, and have your contact information readily accessible. Also, make them aware of promotions, discounts, and coupons (if you can afford this financially).
Talk to the businesses in town to see if they will let you hang flyers. Restaurants — specifically diners — might have those paper placemats that feature local companies. Newspapers and mailers are also a good option, as you can advertise yourself there.