Do you want to start a tire retail business and want to know the cost? If YES, here is a cost breakdown to open a tire shop and the profit margin / ROI.
Tire is a major component in the automobile industry hence the regular demand for tires from automobile owners. Establishments in the retail market for auto tires sell automobile tires and tubes that are used on all types of passenger and freight vehicles.
Over and above, the Auto Tire retail Industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale in a street corner or on a large scale with several outlets in key cities in the united states of America.
Estimated Cost Breakdown to Open a Tire Shop
Interestingly, you may not need to break the bank to open your tire retail shop because you can actually save up to get it done. Please note that general pricing guidelines for new tires: Inexpensive tires will generally be in the range of $50 – $150 each.
Moderately priced tires will usually be in the range of $100 – $300 each. High-end tires (ultra-high performance or specialty off-road tires) can be $300 – $1000 each.
But if rims need to be replaced, the price tag can run anywhere from $200 to $500 for each new wheel, depending on your car. If you’re looking to save a few dollars on replacement rims, search through craigslist or eBay for some take-off rims. These are the key areas where you will spend your startup capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of Isabella & Nancy ™ Bridal Shop, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $35,600.
- The cost for shop remodeling (construction of racks and shelves) for the show room – $20,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for start-up inventory (stocking with a wide range of different sizes and brands of tires, rims, tubes and other related merchandize) – $60,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,500
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
- The cost of launching a website: $600
- Miscellaneous: $2,000
From the rough estimate as listed above, you would need a minimum of one hundred and eighty – seven thousand, nine hundred and eighty USD ($187,980) to establish a medium – scale but standard tire retail shop business in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a tire retail shop to go to the market or directly contact distributors and wholesalers of the types of tires, rims and tubes they want to retail in order to get the real time prices of these items.
The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.