A Business Idea on Tire Shop

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Executive summary

The business that I am offering in this project is the tire shop business of motorbikes tires, car tires, cycle tires, easy bike tires, truck and bus tires to the people of Bangladesh. We will sell wide ranges of tires from the well-known tire industries and provide the best services to our buyers. In this business we not only sell tires but also we can provide services like installation, maintenance and repair services. We will also ensure that our prices are reasonable so that our products can be within the reach of most people. I also have the belief that it is possible to make tire business suitable for people in Bangladesh who need tires.

Why tire shop business?

Tire business is one of the major businesses in automobile sector. These days the number of vehicles is increasing day by day in Bangladesh. For this reason tire business also growing a lot. Since at present the number of vehicles in the road is increasing and no vehicle can be imagined without tires so that tire shops business suitable in automobile sector.                                                                                                           

Description of tire shop:

Place selection for tire shop:

To start tire shop tire shop should be located at a place where vehicles are driven a lot that is near the highway or near the bus or truck stand or near the motor parts shop.

Place should be located on a place where too many people notice the shop.

There should be enough space for parking space.

The shop should be close to the tire supplier so that tire shop owner can save money on transportation.

The owner will need a shop which is at least 500 to 1000 sqft

What The shop will Offer:

The shop will offer all types of tires in terms of cars, trucks and motorcycles.

The shop will have skilled employer for the tire installation and maintenance services to ensure peak performance.

The shop will Offer quick fix & tire repairs including punctures, leaks, and tread wear their standard business repair techniques to ensure that tire usage time is as long as viable and that minor problems do not lead to significant losses regarding time.

The target of the shop is to provide good quality services at a affordable cost hence making customer happy and the shop should be the choice of the owner.

 Tire that will be available in the shop:

The shop will offer the best brand for the customer for their safety and long lasting of tire. The brand that will offer by the shop-

1. MRF Tire

2. Continental Tire

3. Yokohama Tire

4. Bridgestone Tire

5. Dunlop Tire

6. Pirelli Tire

7. Apollo Tire

8. CEAT Tire

Marketing strategy:

Following marketing strategy we can follow in the tire shop:

Online platform:

1. By creating website and maintaining a website that can be used for the shop information such as the 

    brand of tire in the shop available, the service offered by the shop and contact address of the shop.

2.  By using Facebook, Instagram, Twitter account to interact with customer by responding

     Customer question or to share valuable information and promotion of the tire shop. 

Local reach:

1. The shop should be available in the Google maps so that customer can find the shop easily without

     any struggle.

2.  Happy customer should be encourage to express their satisfaction by giving positive comment on

     Facebook page, Instagram or in Twitter for the growth of the shop reputation.

Partnership:

By promoting each other and providing special offers to the customers as a part of cooperation with nearby auto shops or dealerships.

Promotional event:

By organizing some events or come up with special offers or discounts to new customers who visit the

shop or by giving free tire check up in that event to promote the shop.

Advertising:

By advertising through local newspapers, radio stations, or even use of poster and use of loud speaker in

the target area to attract the customer.

Offering:

1. The customer who comes back again for getting service that customer can get special offer.

2. Tire shop should be provide membership car so that customer can get extra offer and this will help to

    boost the shop growth.

Management and operation plan of tire shop:

Daily routine:

1. Shop should be open on time and ensure that all operation going well and distribute duties to workers.

2. By cleaning the shop and organize the shop create positive impression on customer.

3. Attend to customer by ensuring adequate number of employees to handle busy period.

Customer Service:

1. As customer enter into the shop greet them warmly.

2. Customers should be consult on tires, listen to their needs and advice them on tires and its fixing.

Stock Management:

A clear record should be kept on types of tires in stock, reorder when the stock is short and ensure that they do not go wastage by organize their proper use.

Supplier Relations:

1. Maintain a good relationship with the supplier to ensure they deliver the tires on time time and

    get guarantee of  the tires and get those tires at cheap rates.

2. Share any problems with the suppliers and report them to address the problem as soon as

    possible.

Staff Training:

The staff should be trained properly and encourage for teamwork and those who give their best in their duties should be rewarded for their productivity.

 Financial Management:

1. The records that should be kept include what is selling, spend, and how much is earn by selling tires.

2. Some of things can be monitor such as how much money getting from each sale and how quickly the stock is selling.

3. Set achievable money goals for the business, like making more sales and spending less.

Strength of tire shop

1.  As the urbanization in Bangladesh continues to grow and number of vehicles is increasing day by day

     So that many vehicles require many tires.

2.  Most of the road infrastructure in Bangladesh is poor and there is many potholes in road which

     causes frequent tire change. It increase the business opportunities of tire shop.

3. Strategic location increased sales. Because of good site selection customer attract more. If the shop

    located on a place which near the highway or in bus stand or in a heavy traffic area or in the area 

    where more other tire shop present it attract the customer to visit that place.

4. Tire shop owners can attract customer to buy from them by giving offer free fittings after selling the

     tires and they can offer many advice about their vehicles.

5. Customer can be captured by keeping price slightly lower than other competitors.

6. Selling quality product with reasonable price it should be a biggest strength of the shop. 

7. Available of variety of tire companies tire in one shop so that customer need not to go another shop.

8. By making good relationship with different company dealer so that they can give tire without paying

     after selling tire shop owner can pay the price of tire and tire shop owner can get profit.

Weakness

1. For setting up a tire shop require high initial investment for equipment and facility setup.

2. Demand for the tires may fluctuate. In rainy season demand for tire may be increased because in that

    season chance of puncture increase because of bad roads and may Decreased other time.

3. Due to lack of skilled mechanics tire shop unable to offer special service and fail to give proper advice

   that makes the customer to switch another shop.

4. If the tire shop located in a place where visitor visit less it can affect in sales and revenue.

5. Negative review can affect the reputation of shop and discourage customer to buy from the shop.

6.  Poor management and poor decoration can leads to customer switch the shop.

Opportunity:

1. As the number of vehicles is increasing day by day the demand for tire is also increasing.

2. As roads are improving, better quality tires are needed for smooth running.

3. Day by day people are buying their own cars to make life easier but most of these cars are

    reconditioned. Most of the recondition car have some kinds of problem, tire problem is one of them

    so these vehicles need new tires to run smoothly.

4. Since more people in Bangladesh can afford cars, they will require tires for these automobiles.

5. Online shopping is increasing in Bangladesh so that selling tires may attract customer through internet.

Threat of tire shop:

1. The most important threat is if the tire company suddenly reduces the price of their tires then the

   shop owner faces a loss because his tires were bought at a high price and now he has to sell his tires at

   low prices.

2. Security risk is another important threat for the tire shops any kind of theft or any kind of fire can

   Causes a lot of damage to the shop.

3. Counterfeit tires with logos of reputed brands can create an atmosphere of poor performance and

   safety hazard that can tarnish the tire shop reputation.

Financial analysis:

Price list of some tires given below according to size and model of tires

MRF TIRES:

 For bus and truck

Size and modelPrices
MRF-1000 -20/16 RIB   
MRF-1000 -20/16 S. LUG
MRF-1000 -20/16 LUG
MRF -900-20 /16 RIB
MRF -900-20 /16 S.LUG
MRF- 8.25-20/16-RIB
MRF- 8.25-20/16-S.LUG
MRF-8.25-16/16 RIB
= 29000 taka
= 31800 taka
= 32300 taka
= 26000 taka
= 27000 taka
= 21500 taka
= 23000 taka
= 20500 taka

For private cars and bike:

Size and model of private carPrices
MRF-185-70R14
MRF- 185-65R15
MRF -195-65R15
MRF -175-65R15
MRF-245-70R16
7000 taka
7600 taka
7900 taka
7200 taka
14000 taka
Size and model of motorbikesPrices
MRF-150-60R17
MRF- 140-60R17
MRF- 130-70R17
MRF-120-80R17
MRF-100-90R18
MRF-80-100-17
MRF- 2.75-18
MRF-2.75-17
6100 taka
5400 taka
4400 taka
4240 taka
3900 taka
3000 taka
2640 taka
2550 taka

Price of Dunlop tires:

Size and model of tiresPrices
205R16 Japan
215-55R17 Japan
185-70R14 Indonesia
185-65R15 Indonesia
195-65R15 Indonesia
21500 taka
14000 taka
8500 taka
9000 taka
9800 taka

Price of some Yokohama tires

Size and model of tiresPrices
205-60R16 Japan
225-65R17 Japan
175-65R15 Japan
185-70R14 Japan
13000 taka
18000 taka
7000 taka
9000 taka

Price of some Apollo tire

Size and model of tiresPrices
150-60R17 H.I wire
140-60R17 S.I wire
130-70R17 S.I wire
130-70R17 Thread
100-80R17 FS  
6500 taka
5360 taka
5300 taka
4200 taka
3150 taka

Pricing Policy:

Pricing policy of bus, truck and minitruck tires:

Shop owner must have to take profit at least 500 taka to as much possible from the purchasing price of each tire of bus, truck and minitruck. If any shop owner sell less he cannot establishes his shop properly. But if it happens that a brand of tire is in stock for a long time and is not being sold then that tire should be sold at a profit of less than 500 taka and tire should be released. But the loss has to be compensated by profit from other tires.

Pricing Policy of motor cycle tires:

Shop owner must have to take profit at least 250 taka to as much possible from the purchasing price of each tire.

Expenses:

1. Shop rent: 12000 taka per month

2. Mechanic salary: 15000 taka per month

3. Production cost:   Bus and truck tire cost = 1500000 taka

                              Private car tire cost  =   550000 taka

                              Motorbike tire cost   =   350000 taka

4. Advance payment for the shop rent: 200000 taka

5. Current bill per month: 4000 taka

6. Trade license cost: 5000 taka

7. Promotional cost: 10000 taka

Total expenses after starting the business in first month:  Profits: 2645000 taka

Profits:

If approximately 5 tires are sold daily in 1st month and average profit is 3500 taka from 5 tires then profit is 105000taka from tires in one month.

Now,

The 1st month expense is= Shop rent+ Mechanic salary+ Current bill per month

                                             = 12000taka+15000taka+4000taka

                                             = 31000 taka

Owner profits after all expenses = (105000-31000) taka= 74000 taka

Since the new showroom is opened, the profit will be a little less in the 1st month as the reputation of the shop is increase day by day, the showroom will be the place of trust of the customers and the profit will increase along with the sales.

Now, we can find that in the first month the profit will be less but later on the sales of tires will increase due to the reputation of the shop but in some months the sales may be less and the profit will be more or less

Now, we can assume that

 1st year profit is (79000*12) = 948000 taka

2nd year profit is (91775*12) = 1113000 taka

3rd year profit is (117115*12) = 1405380 taka

4th year profit is (141500*12) =1698000 taka

Vision:

1. To establish at least one outlet in every division.

2. Opening a own tire company where tires will be manufactured and exported to other countries

    Including home country.

3. There will be a showroom that will have all types of motorcycle parts so that customers can easily get

    all in one.

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