Starting a business of any kind carries an element of risk. You only have to read the statistics to learn that success is not given in any industry. Before you start a tyres and wheels business, it’s crucial to understand what you’re getting into and figure out ways to maximise your chances of generating profits and establishing a strong brand. First things first, you need to understand what is what and to be well in the know starting with what is a wheel hub. Now, competition is rife, and the industry is evolving, which throws up new challenges for business owners. If you’re thinking about starting a tyres and wheels business, here are 5 things you should be aware of before taking the plunge.
- The cost of starting out
There’s no getting away from the fact that it costs money to establish a wheels and tyre business. This is not a venture you can set up overnight with minimal overheads. Depending on the type of business you want to run, you’ll need to factor in the cost of buying land for your tyre shop, the cost of equipment and technology, labour and employment fees, and of course, the cost of buying supplies and materials. If you choose to open a physical tyre store or a workshop to carry out repairs, as well as selling and fitting new tyres and parts, you’ll need to work out how much it’s going to cost you to get the building up and running by combining the purchase price and the cost of work. To calculate a budget, you’ll also need to contact distributors and suppliers, negotiate deals and work out a pricing policy. Financing a new business isn’t always straightforward, and if you are thinking about applying for a loan, or getting investors on board, the first thing to do is draw up a watertight business plan. Be prepared to answer questions about every aspect of your business and make sure your facts and figures are 100% accurate.
2. Choosing which tyres to sell and selecting services
If you’re on the cusp of launching a new tyre business, you should think carefully about what kinds of products you want to sell. Look at brand figures and market trends, and analyze data related to consumer sales in your local area or through websites if you plan to sell online. Figures from Statista show that Bridgestone is the leading tyre brand, with 26.2% of the global market share in 2017. This is followed by Michelin with 23.4% and Goodyear with 14.6%. Look at all the high-profile brand names, but don’t rule out other options. It’s useful to evaluate data and weigh up all the options before you make a decision. Many tyre providers also offer services related to repairs and maintenance such as wheel alignment and routine vehicle checks. If you offer additional services, you can increase your revenue, and you might also find it easier to attract repeat customers. When you’re creating a product range and selecting services, it’s always useful to conduct market research. The demand for specific products and services may be higher in some areas than others, for example. Your findings can help you create a business plan that caters for your target market.
3. Checking out the competition
Competition is omnipresent in the world of business. There are rivals in every sector. Tyres and wheels are essential items for motorists, and as the number of vehicle owners increases, the market grows. In the UK alone, there has been an increase of almost 2 million vehicles on the road in the last year (source: ABS). As a prospective business owner, the key to success lies in tapping into the market and ensuring consumers buy from you, rather than your rivals. Before you can strategise, it’s vital to find out what you’re up against. If you’re setting up a shop, and you’re targeting a local market, look at other businesses in the area, analyze their prices and services, and see what customers are saying about them. If you plan to sell online, as well as locally, search for other web retailers, have a look at sites, compare prices, read reviews, and keep an eye out for USPs. Once you know what you’re up against, you can think about how you’re going to attempt to outshine your competitors and offer your clients something more appealing. Work on your USP, conduct market research to see what your buyers want, and think carefully about your pricing policy and the range of services you offer.
4. Looking into emerging trends
Like many modern business owners, tyre companies and retailers now face a different type of competition. In years gone by, the aim may have been to beat another shop at the other end of town, but today, competition comes in the form of local businesses, larger national and international chains, and web-based businesses. The threats have evolved, and it’s more important than ever to ensure your new business is relevant and that it caters for modern-day customers. Some people will always prefer to go into a tyre store and buy tyres based on looking at different brands, speaking to an expert and getting recommendations for their vehicle, but for others, convenience and price will win out. Buying tyres online is still a relatively new development, but it is expected to become more commonplace. Research by Consumer Reports suggested that just over 10% of US buyers purchase tyres online, but 43% of participants research tyres and compare prices online before buying. These figures underline the growing importance of the Internet in the decision-making process and the benefit of having an online presence as a retailer.
5. Marketing your tyres and wheels business
Before you set up a tyres and wheels business, it’s always wise to think about how you’re going to attract customers and make sales. Marketing plays an essential role in drumming up interest and encouraging consumers to choose you over other vendors. With the Internet taking centre stage in this day and age, having a website is crucial, but you need to ensure that your site is visible. Link your site to social media accounts, optimise blog posts and landing page content to improve your search ranking, and advertise your business locally via local search engine optimisation, flyers, and press adverts. Tailor your strategy to suit your target market. Searching online for local businesses is a growing trend. Over 88% of smartphone users search for a local business at least once a week and 50% of consumers that find a business online will visit the store within 1 day.
If you’re thinking of starting a new tyres and wheels business, there’s a lot to think about. Measure up your competition, work out your startup costs, figure out how you’re going to market your business, consider your range of products and services carefully and tap into emerging trends to maximise sales.
Kevin is an Australian entrepreneur who has a passion for sales and the automotive industry. Having been in sales and marketing for over 15 years, he has accumulated an insurmountable amount of field experience in solution sales, sales management, sales operations, and sales automation. You can connect with him on social media on the following platforms: Linkedin, Twitter & Facebook.
