The world's largest tire producers make billions of dollars every year. Goodyear's revenue, for example, reached $14.6 billion in 2017. Financial experts predict that tire sales will hit $258 billion in 2019. Whether you want to quit your day job or make some extra money, you can start a tire business in a few steps.
Craft a Business Plan
Many entrepreneurs open tire shops without really knowing what to expect. Soon after, they wonder what went wrong. That's why it's important to analyze the market and your competitors, identify opportunities and threats and come up with a business plan.
First of all, decide what kind of tire business you want to start. Do you plan to become a tire distributor, open a tire repair shop or launch a tire recycling business? Are you going to sell new or used tires? Research the market, set realistic goals and make a decision accordingly.
Your business plan should include a brief description of your mission and values, product information, financial projections and other key aspects. Determine your startup costs, perform a risk analysis and see who your competition is. Also, think about how you'll promote your business and what your ideal customers look like.
Choose a Business Model
There is more than one way to run a tire shop. You can start a tire franchise, a dealership, a retail store or a tire repair center. Decide whether you're going to sell tires, provide tire repair services or both. Used tire stores, for instance, usually sell, install and repair these car parts.
Your startup costs will be higher if you plan to offer brand-new tires. Plus, you'll have to find a reliable supplier, negotiate the price and pay for shipping. Brand-name tires can exceed $400 per unit. Michelin, Bridgestone, Continental and Goodyear are among the most popular tire producers, but you can find more affordable options on Alibaba and eBay.
Decide what types of tires you're going to sell. This will determine who your target customers are. For example, you could sell new or used tires for medium- and heavy-duty trucks, passenger vehicles, motorcycles and so on. To increase your revenue, consider offering vulcanizing services as well.
Comply With the Law
Each state has its own legal requirements for tire shops. You must first choose a business name and structure, find a location and register your company with the Secretary of State. For example, California residents who plan to form a limited liability company must download, fill out and print Form LLC-1, pay a $70 filing fee and then submit it to the Secretary of State or send it by mail.
The next step is to apply for an employer identification number online. This service is available on the IRS website. You can apply by mail or fax too. After you obtain an EIN, find out what licenses and permits are needed to start a tire business in your state.
Texas residents, for instance, must submit an annual application to the Department of Building Safety in order to get licensed. Expect to pay $50 to $100 depending on the size of your shop. Depending on your state's requirements, you may also need a zoning permit, an alarm permit and other documents.
Secure Financing for Your Business
After your business is formed, it's time to search for investors or apply for a loan. Let's say you find a tire shop for sale in a central area. Try to get a bank loan or apply for SBA-backed loans to receive the money you need. Other financing options include microloans and crowdfunding.
You may also use a credit card to fund your startup. This option is risky, though. If you don't pay on time, your credit score will drop. A bank loan or a microloan is a better choice, but it will take some time to get your application approved.
Start a Tire Business Today
When your tire shop is up and running, let customers know about it. Set up a Facebook business page and share updates every few days. List your business in local directories, review sites and social networks. Build a website or blog and post industry-related content along with a brief description of your products and services.
Optimize your website and social media pages for the search engines. Use relevant keywords, such as "open tire places + your city's name" or "tire shop + your city's name." This will increase your rankings in search results and boost your online exposure.
Also, advertise your tire shop in local newspapers. Partner up with other businesses, such as car wash services. Distribute flyers and brochures to spread the word about your products.