How to Start a Tire Shop

If you don’t have the energy or the resources to have a full repair shop that services vehicles, then having a tire shop that just sells them is a good second option. Although this type of shop is strictly retail, there is still a chance of achieving profitability. Location is one of the most important aspects of this type of business. You’ll need to be in a high traffic location where people can get their tires from you and then have them installed somewhere close to maximize your potential.

Secure that location and then you’ll be ready to follow these additional steps to get your tire shop up and running.

1. Know your market.

Your community might not be large enough to support more than one tire shop. If there is already an established brand in place, then getting any sort of market share is going to be difficult. Your best solution would be to find a central location where you can pull in some of the competition’s customers because of the value your location provides. Retail margins are going to be the same, so location becomes the one true advantage.

2. Find out what the local trucking laws happen to be.

Many tow truck operators will bring a disabled vehicle to a tire shop so the driver can get the product that they need. Tow trucks themselves may even carry tires based on what services they provide. Tow trucks aren’t authorized on every street, so don’t inadvertently limit your market by limiting your access to a potential customer segment.

3. Secure suppliers.

As a tire shop, you’ll have the option to sell new and used tires. If you sell used products, you may need to have a system of inspection in place so that you don’t get into trouble selling tires that aren’t viable for use. For new tires, you’ll need to start relationships with vendors, distributors, and manufacturers so that you have inventory to sell. Instead of selling every single brand of tire, consider selecting just one brand at each price point so you can have limited inventory costs, but still market to each local customer segment.

4. Get your paperwork in order.

Because you’re selling retail products, you’ll need a general business license and sales tax collection authorization. If you’re operating under a business name, it will need to be registered. Some jurisdictions consider tires to be a hazardous item, which would require another license. You’ll also need to have relationships in place for tire disposal, even if you’re only selling tires, because there may be defective inventory that just needs to get tossed. You’re also going to need an EIN if you plan on hiring any employees for your tire shop.

5. Make sure you’re completely covered.

You’ll need to have some level of business insurance in place to make sure you’re protected against any customer claims. This is especially important if you’re planning on selling used tires. If an inspected used tire fails and it isn’t a driver-related issue, you could be held liable for the sale. The insurance will limit your losses.

6. Invest into a full service shop over time.

You might not have the cash right away to have a full-service tire shop, but you’ll get more regular business if you happen to have one. As you get capital, slowly invest into the equipment that will be needed to replace the tires. You’ll need tire changers, wheel balancing tools, handlers, spreaders, and potentially tire crushing equipment for disposal.

7. Order your inventory.

Most tire shops are going to benefit from having a relationship with a tire wholesaler. Consider stocking niche tires if you have a lot of competition in your area already. Running limited inventory can help to lower initial costs, but having tires on backorder might also limit your sales. Find the right balance between cost and community needs through conversations and surveys and you’ll be able to have what you need in stock.

8. Offer a warranty.

People like guarantees as much as they like winners. They’ll support you if they know you’re willing to back up your products and your work. Go beyond the standard guarantee when it makes sense and offer your own. In doing so, you’ll attract some extra attention to your inventory because you’re adding to its overall value.

Knowing how to start a tire shop is about as easy as ordering inventory and then selling it for a profit. Follow these additional steps to back up that skill and you’ll set up the foundation where you can make money every day.