Tire Shop Business Plan
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Below is a template to help you create each section of your Tire Shop business plan.
Executive Summary
Business Overview
Tire World is a startup retail tire store business located in Spokane, Washington. The company was founded by Tommy Thompson, a former manager of a national chain tire store company for fifteen years. Tommy was recognized early in his career for both his leadership qualities among the staff members of his former employer, but also for his outstanding ability to assist customers in the best possible ways.
For example, if a customer was grouchy and unhappy about the experience, Tommy would find a way to connect with the customer to indicate some sympathy. If the client was nervous or upset about the costs, Tommy would find ways to assist the customer in feeling more confident in the end result and how the work could be paid for.
Tommy has recruited two of his former staff members to work in Tire World; Jay Goodson, who will act as the Shop Manager, and Clay Maddeson, who will act as the Operations Manager in the main office. Both are experienced in their fields of interest and have experience, along with stellar reviews from clients.
Product Offering
The following are the products and services that Tire World will provide:
- Complete product line of tires for various vehicles, including cars, trucks, SUVs, and motorcycles
- Specialty tires for recreational vehicles and other “heavy load” vehicles, such as tractors and other farm and ranch mobile vehicles
- Tire installation services
- Tire balancing services
- Tire rotation services
- Tire repair services
- Free air fills and tire check as often as customers request those services
- Free bicycle air fills
- Free servicing of tires of childrens’ “mobile vehicles” and safety checks
Customer Focus
The primary target market will include vehicle owners within a 30-mile radius of the shop, including individual customers, commercial fleet owners, and automotive repair shops. In addition, farmers and ranchers will be targeted, along with those individuals who own vehicles with specialty tires.
Management Team
Tire World will be owned and operated by Tommy Thompson, a former manager of a national chain tire store company for fifteen years. Tommy has recruited two of his former staff members to work in Tire World.
Jay Goodson, formerly a shop mechanic at the retail chain tire store, has proven to be a stellar employee during the eight years of his employment in his former position. Jay will now act as the Shop Manager, overseeing all mechanics, inventory, service-related issues and human resource issues within the shop and bays.
Clay Maddesonwill act as the Operations Manager in the main office. He was also recruited from the former employer of Tommy Thompson and has six years of experience as an operations staff member. He will oversee the scheduling for tire service, customer service overall, inventory control and other vital areas that will support the store’s success.
Success Factors
Tire World will be able to achieve success by offering the following competitive advantages:
- Friendly, knowledgeable, and highly-qualified team at Tire World
- In addition to typical tire repair and servicing, Tire World will offer numerous specialty tires for various farm, ranch and recreational vehicles.
- Tire World will offer free air fills and tire checks every time a customer requests the service.
- Tire World will also be known as the Kids Tire Corner, with free air fills and repairs for bicycles and “work” performed on children’s ride-on toys that will be free of charge.
Download the Tire Shop business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Tire World is seeking $200,000 in debt financing to launch Tire World. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph outlines the financial projections for Tire World.
Company Overview
Who is Desert Sun Tire Shoping Company?
Tire World is a newly established, full-service retail tire store in Spokane, Washington. Tire World will be the most reliable, cost-effective, and customer-oriented choice for tire replacement, repair and servicing in Spokane and the surrounding region. Tire World will provide a comprehensive menu of tire products and services for any customer to utilize. Their full-service approach includes a comprehensive array of tires and a number of unique services for customers and their children.
Tire World will be able to offer a stellar mix of product quality and service. The team of professionals are highly qualified professionals, experienced in tire placement, repair, servicing and identification of problems, with a known pattern of excellence in the greater Spokane area. Tire World removes all headaches and issues of tires and the problems that arise in serving or replacement and Tire World ensures all issues are taken care of expeditiously, while delivering the best customer service.
Tire World History
Since incorporation, Tire World has achieved the following milestones:
- Registered Tire World, LLC to transact business in the state of Washington.
- Has a contract in place at one of the office buildings next to the Tire World service center. The office space will add 10,000 square feet, providing for a customer waiting area.
- Reached out to numerous former customers and contacts to spread the word.
- Began recruiting a staff of six and office personnel to work at Tire World.
Tire World Services
The following will be the services Tire World will provide:
- Complete product line of tires for various vehicles, including cars, trucks, SUVs, and motorcycles
- Specialty tires for recreational vehicles and other “heavy load” vehicles, such as tractors and other farm and ranch mobile vehicles
- Tire installation services
- Tire balancing services
- Tire rotation services
- Tire repair services
- Free air fills and tire check as often as customers request those services
- Free bicycle air fills
- Free servicing of tires of childrens’ “mobile vehicles” and safety checks
Industry Analysis
The retail tire store industry is expected to grow over the next five years to over $145 billion.
The growth will be driven by increased numbers of vehicles owned and operated.
The growth will also be driven by the increasing numbers of tires that are especially made to fit with certain vehicles of manufacturers, including “run flat” tires and other features.
The growth will also be driven by the desire by drivers to obtain the maximum amount of miles per gallon spent on fuel as fuel prices rise. Tire performance is directly related; new types of designs will be developed to assist in maximum efficiency rates.
Costs will likely be reduced by greater availability of all types and sizes of tires.
Costs will also likely be reduced by larger inventory of stock tire sizes at tire manufacturer facilities.
Download the Tire Shop business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Tire World will primarily target vehicle owners within a 30-mile radius of the shop, including individual customers, commercial fleet owners, and automotive repair shops. In addition, farmers and ranchers will be targeted, along with those individuals who own vehicles with specialty tires.
The precise demographics for Tire World are:
| Total | Percent | |
|---|---|---|
| Total population | 1,680,988 | 100% |
| Male | 838,675 | 49.9% |
| Female | 842,313 | 50.1% |
| 20 to 24 years | 114,872 | 6.8% |
| 25 to 34 years | 273,588 | 16.3% |
| 35 to 44 years | 235,946 | 14.0% |
| 45 to 54 years | 210,256 | 12.5% |
| 55 to 59 years | 105,057 | 6.2% |
| 60 to 64 years | 87,484 | 5.2% |
| 65 to 74 years | 116,878 | 7.0% |
| 75 to 84 years | 52,524 | 3.1% |
Customer Segmentation
Tire World will primarily target the following customer profiles:
- Vehicle owners
- Commercial fleet owners
- Automotive repair shops
- RV repair and servicing shops
- Farmers and ranchers with work-related vehicles
Competitive Analysis
Direct and Indirect Competitors
Tire World will face competition from other companies with similar business profiles. A description of each competitor company is below.
National Tire Store
National Tire Store is one store within a national retail chain of tire stores. There are 355 stores across the U.S., each carrying the same stock tires to meet the needs of 80% of the U.S. population, depending on which kind of vehicles are driven. Foreign cars (German, etc) with specialty tires will not find tires in this national chain.
National Tire Store was founded in 1990 by Hugh Morrison and his wife, Patti, who had been operating a tire store for five years on a small scale in a suburb of Chicago, Illinois. They were approached by a company that funds startup franchise stores and they bought into the plan to develop their single store into a national brand and numerous stores. Although they’ve retired, Hugh and Patti continue to remain active in the oversight of the chain and the changes that have occurred. The chain is focused on U.S. vehicles that run on U.S. tires, made for the greater population rather than for all types of vehicles. Farm, ranch, and recreational vehicle tires are not inventoried at the chain stores.
Grainger’s Tire Store
Grainger’s Tire Store is owned and operated by Lou Grainger. It was established in the city of Spokane in 1979 and currently has ten employees who focus on service and selection for their customers. Grainger’s Tire Store is a direct competitor to Tire World; however, differences are apparent for customers when making comparisons. Grainger’s Tire Store does not offer free air fills or tire checks, nor do they service bicycles, or children’s mobile vehicles. The store does not carry specialty tires, nor does it carry tires for ranch or farm vehicles.
Lou Grainger has built a reputation of being a community-minded business owner, having assisted with several Spokane city departments in their tire repairs and replacements. This includes the police department and other vehicles that are regularly driven by city employees. The relationship has become a collaborative one, with the two entities contracted for long-term services and products for ten years to come.
Tube n’ Lube
In 2020, brothers Lucas and Nico Porterro decided to open a tire store in an abandoned convenience store on the southside of the city of Spokane. The store was purchased and the brothers cleaned and stocked the store with a variety of tires and tire accessories. They added a 2-bay tire installation and lube service area in 2021 and have since run a modest business by acting as the service technicians at the same time they provide customer service and product sales. They currently sell tires for cars, trucks, and motorcycles.
In addition to selling and servicing tires, the Porterro brothers offer lubrication service for area vehicle owners. They charge modest prices for basic lube services.
Download the Tire Shop business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Tire World will be able to offer the following advantages over their competition:
- Friendly, knowledgeable, and highly-qualified team at Tire World
- In addition to typical tire repair and servicing, Tire World will offer numerous specialty tires for various farm, ranch and recreational vehicles.
- Tire World will offer free air fills and tire checks every time a customer requests the service.
- Tire World will also be known as the Kids Tire Corner, with free air fills and repairs for bicycles and “work” performed on children’s ride-on toys that will be free of charge.
Marketing Plan
Brand & Value Proposition
Tire World will offer the unique value proposition to its clientele:
- In addition to offering tire replacements or repairs to virtually all kinds of tires, Tire World will become known for their stellar customer service.
- Tire World will offer free air fills and repairs for bicycle tires
- Tire World will offer free air fills and “repairs” for children’s mobile vehicles.
- Tire World will offer services beyond the norm, providing for area ranchers and farmers with specialty tires for their mobile equipment
Promotions Strategy
The promotions strategy for Tire World is as follows:
Word of Mouth/Referrals
Tire World has built up an extensive list of contacts and former clients over the years by providing exceptional service and expertise to clients. Former customers will follow the management of the new company and help spread the word about the launch of Tire World.
Professional Associations and Networking
Community groups and government offices in Spokane invite business owners to meet with them regularly; the Tire World staff will do so. Special discounts and offers can be made to assist local law enforcement, while providing a service that meets the needs of residents, as well. Networking will begin before the tire store opens and continue indefinitely.
Print Advertising
A direct mail piece will be sent to all residents within the greater Spokane area two weeks prior to the opening of the tire store. Special discounts will be offered for the first three months of business. Referrals to new customers will also be rewarded with perks and special tire packages.
Website/SEO Marketing
Tire World will fully utilize their website. The website will be well organized, informative, and list all their products and services that Tire World provides. The website will also list their contact information and services offered. The website will employ SEO marketing tactics so that anytime someone types in the Google or Bing search engine “tire company” or “tire store near me”, Tire World will be listed at the top of the search results.
Pricing
The pricing of Tire World will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
Operations Plan
The following will be the operations plan for Tire World.
Operation Functions:
- Tommy Thompson will be the Owner and President of the company. He will oversee all staff and manage client relations. Tommy has spent the past year recruiting the following staff:
- Clay Maddeson will act as the Operations Manager who will oversee scheduling, customer relations, and other administrative duties.
- Jay Goodson will act as the Shop Manager, overseeing all staff and management of the shop and bay areas of the store.
Download the Tire Shop business plan template (including a customizable financial model) to your computer here <–
Milestones:
Tire World will have the following milestones completed in the next six months.
- 5/1/202X – Finalize contract to lease office space
- 5/15/202X – Finalize personnel and staff employment contracts for Tire World
- 6/1/202X – Finalize contracts for Tire World wholesalers
- 6/15/202X – Begin networking at community events
- 6/22/202X – Begin moving into Tire World
- 7/1/202X – Tire World opens its doors for business
Management Team
Tire World is owned and operated by Tommy Thompson, a former manager of a national chain tire store company for fifteen years. Tommy was recognized early in his career for both his leadership qualities among the staff members of his former employer, but also for his outstanding ability to assist customers in the best possible ways. Tommy has recruited two of his former staff members to work in Tire World.
Jay Goodson, formerly a shop mechanic at the retail chain tire store, has proven to be a stellar employee during the eight years of his employment in his former position. Jay will now act as the Shop Manager, overseeing all mechanics, inventory, service-related issues and human resource issues within the shop and bays.
Clay Maddesonwill act as the Operations Manager in the main office. He was also recruited from the former employer of Tommy Thompson and has six years of experience as an operations staff member. He will oversee the scheduling for tire service, customer service overall, inventory control and other vital areas that will support the store’s success.
Financial Plan
Key Revenue & Costs
The revenue drivers for Tire World are the fees they will charge customers for their products and services.
The cost drivers will be the overhead costs required in order to staff Tire World. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.
Funding Requirements and Use of Funds
Tire World is seeking $200,000 in debt financing to launch Tire World. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
Download the Tire Shop business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Customers Per Month: 300
- Average Revenue per Month: $90,000
- Office Lease per Year: $100,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Tire Shop Business Plan FAQs
What Is a Tire Shop Business Plan?
A tire shop business plan is a plan to start and/or grow your tire shop business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Tire Shop business plan using our Tire Shop Business Plan Template here.
What are the Main Types of Tire Shop Businesses?
There are a number of different kinds of tire shop businesses, some examples include: Retail, Discount, and Full-service.
How Do You Get Funding for Your Tire Shop Business Plan?
Tire Shop businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Tire Shop Business?
Starting a tire shop business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Tire Shop Business Plan - The first step in starting a business is to create a detailed tire shop business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your tire shop business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your tire shop business is in compliance with local laws.
3. Register Your Tire Shop Business - Once you have chosen a legal structure, the next step is to register your tire shop business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your tire shop business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Tire Shop Equipment & Supplies - In order to start your tire shop business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your tire shop business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful tire shop business: