Tires and Rims Store Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Tires and Rims Store Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Tires and Rims Store business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Tires and rims stores are in an interesting position to be able to sell two types of products – one that is a necessity and one that is used for aesthetic purposes for vehicle. Cars are always going to break down and require new tires. As such, most tired rims stores are able to remain profitable and cash flow positive in most economic climates given that people are going to continue to need these products at any given time. The gross margins generated from the sales of tires typically ranges anywhere from 30% to 55% depending on the make and model of tire. Generally speaking, the more expensive the tire the higher the gross margins. Rims on the other hand typically carry a gross profit of 50% to 70% depending on the specific type of product required by the customer. One of the nice things about operating this aspect of the businesses is able to generate highly predictable streams of revenue that only declined slightly during times of economic recession. Rims are a necessity for some vehicles and they are able to be replaced relatively inexpensively in the event of an accident or if the customer simply want to upgrade.
Most tires and rims stores typically have a startup cost that ranges anywhere from $100,000 to $200,000. A substantial amount of this capital is typically used to finance the equipment that is needed in order to install tires on a vehicle. As such, most financial institutions are willing to provide a significant amount of capital support for a new tires and rims store given that about 75% of the money needed is for furniture, fixtures, equipment, and the build out of the facility. The inventory carried by most tires and rims stores is considered to be a tangible asset. As such, there is a significant amount of collateral that is provided to a bank when an entrepreneur wants to establish a new tires and rims store location.
A tires and rims store SWOT analysis should be produced and given to any financial institution or potential private investor that will be putting up the capital needed to start this type of business along with a business plan. As it relates to the strengths of these businesses – they are almost always able to generate a profit in most economic climates. For weaknesses, there is always going to be a significant amount of competition from both independent and franchised tire stores. Many entrepreneurs will establish new locations as the opportunity for the business. There are no known threats that would impact the way that these businesses conduct their operations.
This business plan should feature a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. As it relates to the tire rims store industry, these businesses aggregate we generate more than $5 billion a year among the 2,200 companies that operate in this capacity. The industry employs 50,000 people and has provided payrolls of at least $3 billion per year in each of the last five years of operation. This industry is expected to have a growth rate that is similar to that of the general economy. However, it should be noted that during times of economic recession these businesses may actually outperform the economy given the continued and ongoing necessity for tires on new and used vehicles.
Within the tires and rims store business plan, a full analysis of the local and regional market should be included. Usually these businesses have a target market radius of about 15 to 25 miles depending on whether or not the business is located in a suburban or rural location. This analysis should include an overview of the population size, population density, median household income, median family income, median household net worth, percentage of people that own a vehicle, and the average age of the vehicle within the target market. Although this information may be difficult to source, there are a number of online platforms that can provide this information for free or with a very limited fee. A local or regional marketing firm can assist a tires and rims store entrepreneur with obtaining the information they need regarding not only the demographics of people within the target market but also as it relates to competitive threats as well. Within the tires and rims store business plan, there should be a full analysis of all competitors that operate within the target market. This includes both independently owned as well as franchised locations.
A tires and rims store marketing plan also needs to be produced in conjunction with both the business plan as well as the SWOT analysis. This marketing plan should focus heavily on establishing a strong brand name within a 25 mile radius of the company’s location. Most importantly, print and billboard advertisements should be taken out in order to ensure that the business is able to receive a significant amount of through traffic at the onset of operations. One of the other things that many owners of these businesses do in order to generate their initial revenues is to develop ongoing relationships with tow trucking companies as well as new and used car dealers within the target market. This provides a substantial amount of referral revenue and in some cases toe trucking services may receive small fees each time they bring a vehicle to the company’s location. These relationships can be an invaluable way for most of these businesses to expand their operations.
Beyond maintaining a print advertising campaign and maintaining relationships with local businesses – it is imperative that the tire and rims store maintain an expansive online presence as well. The company’s website should feature information about the types of tires carried, brands of rims carried, preliminary pricing information, location information, hours of operation, and contact information. This website should be listed among all major search engines so that anyone searching for the tires and rims store within any given market can quickly find the business. A web development firm can be hired so that these businesses can be found quickly when an appropriate search is done on Google, Bing, Yahoo.
While it is not necessary, many tires and rims store owners do find it to be very beneficial for having a presence on social media. This is especially important as it relates to the sales of rims given that this is an aesthetic enhancement to a vehicle. As such, many car owners who are proud of the work they’ve done to their vehicle will frequently join regional communities to showcase the rims they have purchased. By maintaining a presence on platforms such as FaceBook, Instagram, Twitter, and Google+ – tires and rims to work and expand the retail locations visibility by having customers know where they made their purchases. These platforms also allow for individuals to place recommendations and discuss the business directly on the company’s social media platform pages. Over the long haul, a number of very strong reviews from very satisfied customers can substantially benefit the business as it relates to establishing a level of trust with the general public. Additionally, given that these social media platforms allow individuals to follow the company’s website and web pages – specialized deals and discounts can be offered immediately to the general public. Most importantly, this tool can be used when specific inventory needs to be sold very quickly. As such, while it does take time and some investment in order to maintain a prominent social media appearance – the return on investment can be significant especially as it relates to increasing inventory turnover.
Tires and rims stores can be highly profitable businesses especially during times of economic prosperity. Rim sales carry significant gross margins and can be a major profit center for these businesses. On the flipside – the sales of tires while producing not nearly the same level of gross profit always ensure that these businesses are able to remain profitable and cash flow positive in most economic climates. These businesses typically have moderate operating costs as it relates to their retail location as well as payroll expenses. This industry is going to remain in demand for the foreseeable future. Even as more cars become electric, the need for quality tires especially in areas that have continued an ongoing inclement weather remains very strong.