When planning a business to open a tire shop, it is necessary at the very beginning to divide the cash costs into one-time and fixed costs.
What should be considered in a tire fitting business plan?
1) Tire revenue planning is one of the most difficult aspects
Income from this type of activity has a seasonal trend. Therefore, the business plan will be the closer to the real one if its seasonality, details and features of its maintenance are taken into account.
2) We plan the costs of registering a business
You need to start, of course, with the paperwork. Fortunately, for this kind of economic activity there is no need to obtain special permits and licenses.
It is enough just to register a legal entity or individual entrepreneur under the simplified taxation system (you can read about filing an application for simplified taxation here).
It is necessary not to forget about the registration address:
— for individual entrepreneurs — this is the address of registration;
— for LLC — this is the legal address where your organization is registered.
Registration will cost you between $800 and $10,000, depending on whether you are registering an individual entrepreneur or LLC, and whether you use the services of agencies.
3) The cost of renting or building a tire fitting room
Now you need to decide on the premises. It is clear that the place must be busy.
There are many options for a “good” location: from a garage cooperative or parking lot to a point near a market or a busy road.
The room for tire fitting must comply with:
— fire regulations
— norms of SES and labor protection,
as well as to have well-laid wiring and sewerage.
Therefore, it is necessary to calculate how much it will cost to bring the premises to these same standards.
If the premises are rented, then its cost will consist of two components:
1) bringing the premises into the appropriate condition — $ 20,000,
2) the cost of rent for the first 1-2 months is $40,000.
It is worth noting that the premises can be built, but then the amount of costs increases many times — up to 1-2 million rubles.
4) Equipment for tire fitting
Let’s move on to the equipment for tire fitting. It is necessary to first estimate the volume of services provided in order to calculate the load of equipment.
The equipment should pay off in an average year. On average, the purchase of equipment for one box will cost you $280,000.
However, you can rent or lease equipment, then the amount of the monthly payment will be reduced (approximately up to 33,000 rubles). This option will reduce the one-time investment in the business and insure you against failure.
5) We consider the cost of the wage fund
Personnel costs are also planned based on the forecast volumes of services rendered. It is better, of course, to take one master who understands all aspects of this type of activity and one or two good specialists of average qualification.
Monthly payroll costs are about $40,000.
Current fixed costs include:
— utility bills
— taxes, etc.
This amount is about $10,000 per month.
All other expenses: for advertising, for furniture, for tea / coffee, you determine yourself.
The total cost of organizing a tire fitting business:
The amount of starting investments (rental option) = 4000 rubles. + 20 000 rub. + 40,000 * 2 rubles. + 280 000 rub. + 40,000 * 2 rubles. + 10,000 rubles = 474,000 rubles
The amount of starting investments (construction option) = 4000 rubles. + 20 000 rub. + 40,000 * 2 rubles. + 2 000 000 rub. + 40,000 * 2 rubles. + 10,000 rubles = 2,194,000 rubles
Payback of tire fitting
During the season, you will receive revenue of 200 — 300 thousand dollars per month. Out of season, revenue will be 2-3 times less. That’s why:
– in the rental option, you will pay back the premises for about 6 months;
— the payback of the constructed premises will stretch for several years.
Real estate is a completely different business!