Independent tire dealers have agreements with tire manufacturers to purchase tires at wholesale prices. According to Jeff Mobley, owner of Carolina Tire and Service, independent dealers are struggling to compete with big store chains such as Wal-Mart. Becoming an independent tire dealer requires some business and tire knowledge, and in many ways it is similar to starting any other business. You will need a solid and clear business plan, a marketing strategy, a good location to distribute your product, business licenses and local permits.
Create a business plan. Write up a general idea of how you plan to distribute tires. Include a proposed location, average prices and a description of your target market. Describe how you plan to succeed as a tire dealer. If you have a special insight into the tire market or if you know the key players in the area include these details in your business plan. Also include financial projections and how much money you will need to make to break even. Devote a large part of your business plan to describing the competition in the area. The tire business is highly dependent on price and availability. If you have a big chain such as Wal-Mart nearby, describe how you will compete with them based on price, quality and accessibility.
Get financing. Determine how much you will need to operate your tire dealership for one year assuming you won't make any profit. A one-year cost buffer will help you stay focused on growing your dealership without worrying about cutting costs from the start. Your biggest initial expense will be stocking up a good tire selection. Other operating costs will be rent, employee salary, insurance, utilities and marketing expenses. Contact your local branch of the Small Business Association (SBA) to help you polish your business plan for free and get it ready to present to investors. Present your idea to local banks and independent investors to get funding.
Register your business. File articles of incorporation with the secretary of state in your state. Often the office will have sample forms to assist your through the filing process, and sometimes online business registration portals through its website. Get a reseller's permit from your local county courthouse to be able to sell tires.
Set up a location. Choose a location with a lot of vehicle traffic. Ideally, your location should be near residential and commercial areas, and far away from other independent tire dealers. Avoid setting up near a big store chain like Wal-Mart; you will have a very tough time competing against them. Check with the local zoning board about regulations regarding tire dealerships in your county. Some local zoning boards may require a certain size storage facility for the tires.
Buy equipment and inventory. Make deals with tire manufacturers such as Goodyear, Michelin Group, Pirelli and Bridgestone. Contact them for wholesale prices on their tires. You will also need equipment to lift the cars and supplementary equipment such as gloves and uniforms for your employees. You can save money by only buying the most popular types of tires to keep on inventory, and have a catalog that clients can sort through to see more variety. Keep in mind that if your competitors are offering a vast variety of tires, you may find it difficult to compete without offering at least the same kind of variety.
Insure all your equipment and tires. Get worker insurance for all your employees.
Market your tire business. Create and distribute fliers around your area. Place adds in local magazines and newspapers. Build relationships with auto mechanics in the area, and offer low prices to gain their referrals. Create new special offers every two to four weeks to attract new customers.
- tire image by Orlando Florin Rosu from Fotolia.com