How to Start a Tyre Showroom in a Small Town?

. 7 min read
How to Start a Tyre Showroom in a Small Town?

Although the automobile industry is evolving almost every day, there will never be any replacement of tyres. Therefore it is safe to assume that tyres are here to stay, and starting a tyre showroom is one of the most profitable business opportunities. With the increase in demand for automobiles, the need for tyres will also increase, and thus, there is no need to worry about your tyre business going downhill. The best part about owning a tyre business is that it will owe you high returns if you open a showroom in a metropolitan city or a small town. This is the right time to start a retail-based business of tyres because, according to automobile experts, the global tyre market is predicted to grow annually by 8-9% between 2016 and 2021.

What are the factors necessary to consider setup a tyre showroom?

If you don't have prior experience setting up a tyre showroom before, then don't worry because you will get all the help you need in this article. Although the decision process might be overwhelming, it will get easier once you absorb all this information. So here some of the steps which you need to know about  how to start a tyre business and to maximise your sales:

1. Conduct market research

Before making the necessary investment to start a tyre business, you need to determine the demand for tyres in your preferred town. Although tyres have always been in great demand regardless of the location, it is necessary to check the competition. You will also have to research the population's base income and preferences and the number of tyre showrooms in the area. For instance, you might find that the tyre showrooms placed strategically on highways are pretty sought-after. Make sure to conduct as much info as possible by conducting interviews, surveys, focus group discussions, etc.

2. Understanding market dynamics

Tyre business is a relatively safer business opportunity because a tyre can break down anytime, and at any point in time, you will have potential leads. If your home town's primary mode of earning is selling and repairing tyres, you will find it challenging to enter into such a competitive market. If the town is growing gradually, but it has a large population base, you would undoubtedly do good business. After that, you will have to stalk your competitors' marketing moves and pricing strategies and then fix your services’ prices accordingly. To determine the selling prices of all your products and services, you will have to consider your profit margin to calculate the estimated income, and this will help create your tyre business plan. This particular information will be essential for you to determine the number of customers you need to reach your income goals.

3. Choose the products you want to sell

Yes, you want to sell tyres, but tyres are of various types to suit different vehicles, and therefore you will have to choose your inventory products. To select the tyres, you will have to check the vehicles that run in your small town, and based on it, you will have to stock those. To ensure that you can supply tyres for vehicles of all kinds, you can stock in tyres for 2-wheelers, light passenger vehicles, and heavy commercial vehicles. Now the number of tyres will depend on the quality of vehicles on the roads of your small town. You can also sell tubes and seams in your store and even repair broken tyres.

4. Selecting location

If you have decided to start your tyre showroom in your hometown, you will have to select a store location that receives high traffic. Choice of location is a vital factor because if you open your tyre store in a narrow alley, not many vehicle owners and drivers will be aware of it. Thus you should always settle for a heavily congested area. Alternatively, you can also go for a spot near the highway, and this would give you numerous tyre servicing opportunities.

If you are considering selling tyres only, only a one-room store would be sufficient initially, and then you can go for an extension as your business grows. However, if you have decided to repair tyres, then you need space to house vehicles. Even if you have limited funds, you will have to invest in a garage bay to offer the vehicles’ repair services. If you want to understand how to open tyre showroom, then you can either look for real estate agents to buy or lease property. Although purchasing the space is recommended because there will be no restrictions in customisations, you can lease the property initially to save some expenses.

Also Read: Best Tyre Brands In India

5. Hiring showroom executives

Contrary to what you believe, a tyre showroom cannot guarantee superior customer service if it has inadequate staffing. Take a moment and think about the number of staff you need both for administrative and technical tasks. Then you can post ads on social media profiles or job portals for each of the requirements and then recruit them after interviewing. Often showroom businesses fall because of underproductive or absent employees, and thus, you will have to ensure that this does not happen to you. The best part is you don't have to manually monitor and track your employees' attendance and performance if you incorporate the performance management software okstaff in your business.

6. Procuring and documenting inventory

While you are creating your tyre business plan, you would have to determine whether you will sell tyres of a single brand or of various brands. If you are considering this, you can even look into acquiring the tyre franchise of that particular brand, and thus, your job of sourcing inventory periodically will become easier. However, if you are thinking about stocking on different brands' tyres, you will have to look for suppliers and connect with them. Although this is also a profitable business scheme, it will take some time to build a network of reliable suppliers. For documenting your inventory to ensure that you place the order of the right product at the right time, you can use the OkCredit software. This move is to ensure that your most-selling tyres do not run out of stock when required.

To start a tyre showroom business, you will have to complete a few legal formalities, and for this, you would need to acquire permits and licenses from the authorities of your town. Since you would be buying or leasing a retail store, you will have to apply for the business tax license. You will also need to register your company if you have not done yet after deciding your brand name. There are two types of business structures applicable for tyre-showroom owners like you. If you are the sole owner, you can go for LLC, or if there are one or more business partners, you can opt for LPC. It would be better if you consult with a business attorney before deciding the corporate structure. Once you are done filling the licenses and permits, you will have to get in touch with an insurance company. Since you would be investing in retail space, machinery, and tools, you should never overlook this step in ensuring your tyre business.

8. Investment required

The amount of investment required will depend on many factors, and you should evaluate this before proceeding ahead. The real estate prices of your preferred location will determine the initial investment that you need to bear. Afterwards, the investment will increase based on your showroom’s type of décor and the tyres and repairing tools you would purchase. If you are short of funds, you can even apply for a business loan from the bank of your choice.

clock of a needle is at investment word


Now that you know how to start tyre business, you will have to design attractive marketing schemes to attract your customers. Since you are a new contender in the automobile industry, you should build your customer base by offering free repairing service to your customers, at least for a few months, to get all the hype and attention.

Also read:

1) Online Business Ideas You Can Start Quickly
2) What online business can I do to make money? Here are the top-6 ideas for you.
3) Where Do the Best Business Ideas Come From?
4) Best Home Business Ideas in 2020

5) OkCredit: All you need to know about OkCredit & how it works.

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Q. How much does it cost to start a tyre shop?

Ans. For obtaining a dealership, the initial cost could be around 10 Lakh INR. If you wish to upgrade with high-end tools and equipment, then the overall costs could increase to around 23 Lakh INR.

Q. How to open a tyre showroom?

Ans. You should include the necessary machinery and equipment. Then, you should set up a proper area for accommodating all the machinery.

Q. Is a tyre showroom a good business?

Ans. The automobile industry is constantly evolving. Therefore, with the rising automobile industry, a tyre showroom can be a lucrative option.

Q. What equipment is needed for a tyre showroom?

Ans. There are several machinery and equipment needed for setting up a tyre showroom. Some might include buffers or drills, wrenches, TPMS activation tools, tire stands, and so more.