Optimization of operating costs for used tire shops

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The used tire store industry is growing at a rapid pace every year. According to the most recent market report, the demand for used tires and related services grew by 20% in 2020, driving the industry to a market value of over US billion.

The used tire store industry is becoming increasingly competitive as companies attempt to better profit from the growing demand for used tires. Businesses cannot just focus on marketing their services; They must also maintain a tight budget to ensure operational costs are managed properly.

The costs of operating a used tire shop can vary widely, depending on factors such as: employee salaries, utilities, insurance, inventory and supplies, rent or lease, costs, maintenance and repairs, advertising and legal. These costs add up quickly and need to be carefully managed to ensure the business can remain profitable.

Operating Expenses

Running a successful and efficient tire shop requires owners to understand and be prepared to cover all necessary operating expenses. Current operating expenses include the following:

  • Employee salary
  • Public services
  • Assurance
  • Inventory and supplies
  • Rent or lease
  • Costs
  • Maintenance and repairs
  • Advertisement
  • Legal

Employee salary

Employee salaries can be a significant cost to a used tire store. It is necessary to pay salaries in order to maintain a store staff. Not only are additional salaries to be expected for work on holidays, being open or for more time worked, but benefits such as health care, vacation and benefits, can add significantly to the cost of salaries. employees.

According to the latest survey of wage rates in the United States by the Bureau of Labor Statistics, the median hourly wage for a production worker in a tire store was .35 per hour in May 2020. This figure is up from 17 $.05 the same month of the previous year.

It is important to consider the cost of insurance and other benefits when determining the cost of employee salaries. The average cost of insurance for employees in the United States was ,000 per employee in 2020. This figure increased by more than 4% from the previous year.

On average, employee perks such as flexible work hours, free snacks or coffee, gym access, and other amenities, can cost an additional 0 per employee per year. Other benefits such as paid vacation, sick days and bonuses can add up to ,000 Plus per employee per year.

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When calculating the cost of operating a used tire shop, it is important to consider the cost of employee salaries and associated benefits. The cost of employee salaries and benefits can be substantial, but are necessary to run a successful boutique.

Public services;

Buying and running a tire shop requires more than just stockpiling inventory and hiring staff; For businesses involved in installation and repair, considering utility costs is a necessary part of running a successful shop. Used car and tire service shops require a variety of utilities such as electricity, gas, water, telephone or internet, as well as services such as water management worn out. The exact amount of money a store owner should set aside in order to pay for utilities depends on a variety of factors.

According to Statista, the average cost of commercial utilities in the United States in 2019 was over ,900 per month. The exact amount a tire shop will pay, however, varies by location, shop size, and usage. It is important to consider the different types of utilities needed to make an accurate budget.

When planning costs, store owners should consider:

  • Electricity: Electricity is a key utility, whether a store uses oil-filled heaters or climate-controlled machinery. High-powered machines, such as elevators and air compressors, require a lot of horsepower.
  • Gas: Depending on the services provided by the stores, there may be additional costs involved for natural gas, which can be used for heating and lighting.
  • Water: All tire and auto shops need a sufficient amount of water to operate. However, the use of water may vary, depending on the services provided by the store. Some stores may need more water for steam tires.
  • Phone/Internet: In addition to water, having a reliable phone and internet connection for communication and marketing is essential for any tire shop.
  • Wastewater Management: Wastewater management fees are often overlooked when estimating utility expenses, but the processes and technologies needed to manage and dispose of wastewater add up quickly.

In most cases, it’s also important to remember that utility costs are not just one-time expenses, but rather require store owners to factor these costs into their operating budgets each month.

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Owning a used tire shop requires having the necessary insurance coverage to protect your business and your customers. Depending on the state in which your store is located, certain types of insurance are required to operate a used tire store. In addition to general liability and property insurance, most businesses require commercial auto insurance, workers’ compensation insurance, and a bond. The types of insurance you need and the rates you pay will depend on your individual situation.

According to the National Association of Insurance Commissioners ( Naive ), in 2018 the median amount that insurers paid, per claim, for commercial auto insurance was ,592 . The average charge per property claim was ,851 and ,963 for general liability claims. The workers’ compensation average was ,392 . If a business is not properly insured they can be held liable for claims and can face legal action, stiff fines and even closure, so having the right amount of cover is very important.

The cost of insurance varies depending on the risk assumed by the insurer, the amount of coverage required and the type of business insured. Additionally, insurers may consider the following factors when pricing an insurance policy:

  • Business owner experience
  • Company financial resources
  • Number of staff
  • Type of tires sold
  • Business location

Insurance can be expensive but not having it can be even more so. Speak to a knowledgeable and reputable insurance agent to help you find the right policies at the right price to protect your business and your customers.

Inventory and supplies;

Running a tire shop requires a significant financial investment in inventory and maintenance stocks. Inventory refers to the specific tires and other products you stock in your shop, while supplies refer to the things you need to properly maintain and repair those tires. According to the US Bureau of Labor Statistics, the average cost of inventory and supplies for a tire shop in 2020 was 0,000 .

For items such as tires and other parts, costs can add up quickly if your store only carries high-end products. Typically, inventory costs for a single tire shop can range from 5,000 to 0,000 . To reduce costs, consider offering less expensive, more commonly used tires to your customers.

As for supplies, this includes all tools, equipment and lubricants necessary for proper tire maintenance and repairs. These costs will vary depending on the type of tire shop and specific needs. Air pumps, outlets, lifts, and similar equipment are all required, and the costs can add up quickly. The average cost of supplies for a tire store in 2020 was ,000 .

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It is important to regularly assess your inventory and supplies to ensure that costs are minimized. Be sure to keep an eye on the cost per item and take into account any special offers or discounts that may be available. Also, buy the best price, as different vendors may offer different deals. This can add up to significant savings over time.

Rent or lease;

When it comes to operating a used tire shop, one of the most significant costs associated with maintaining the business is the lease or lease agreement. Rent is often the best option for contractors who maintain a used tire shop. When renting, the business owner is usually only responsible for the amount of the rent and all other bills associated with the property are usually covered by the landlord. In the United States, the average rent for retail space is around per square foot. The average lease agreement, however, often ranges between and per square foot with terms ranging from three to ten years. The monthly rent for tire use and storage may vary depending on the size of the space.

The length of the rental agreement is also an important factor to consider. Short-term leases have their advantages, as they usually require the tenant to provide minimal information. This allows the tenant to get an agreement without having to immediately disclose a large amount of information. Conversely, long-term leases offer more stability, as they guarantee a predetermined rate for the duration of the agreement.

The upfront costs associated with a lease or lease can be significant and can take a business owner by surprise. As such, it is important to prepare for these costs by budgeting in advance. Some of the most common upfront costs to consider when budgeting include:

  • Security Deposit: This can be one month’s rent to three months’ rent or more. It is usually refundable but will be held in case of damages or other expenses incurred during the term of the agreement.
  • Attorney Fees: Depending on the complexity of the lease, attorney fees may be required. The cost of this can vary widely and usually depends on the length and detail of the agreement.
  • Lease Improvements: If a business owner needs to make changes to the space, such as renovation or remodeling, these costs can be significant. Additionally, depending on the area, some tenants may also need to pay utility charges.
  • Insurance: Many landlords will require the tenant to obtain insurance before entering into a rental agreement. This insurance covers potential damage that may occur on the premises.
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By understanding lease and rental costs, as well as the associated upfront costs, business owners can ensure they are not taken by surprise during installation. With this knowledge in hand, business owners can make more informed decisions about what type of agreement is best for their business.


Running a used tire shop comes with a number of costs to consider. Beyond the initial investment in the business, there are ongoing costs to know that can make the job more complicated. Here is a detailed breakdown of the most common fees associated with running a used tire shop.Business license:

A business license is generally required to operate a used tire shop. The cost of a business license varies by state, but could range from a few hundred dollars to over a thousand dollars. In general, it’s wise to check with the local government to find the exact fees needed for a specific state.

Product inventory:

As with any retail store, purchasing the inventory needed for a used tire shop is a major expense. Depending on the size of the inventory and the types of tires and rims the store carries, the cost can range from thousands to hundreds of thousands of dollars. It is important to do your research and shop around to get the best price on the inventory of products needed.


Equipment needs vary depending on the types of services offered by an individual store and the types of tires sold. Tire stands, tire balancers, tire mounting machine, lube pumps, hydraulic lifts, tire screens and other specialized tools and equipment can add up to thousands of dollars in costs for a shop. used tires.


Insurance is an important and necessary investment for a used tire shop. Insurance helps protect store owners against potential damages and other liabilities. A typical insurance policy could cost 0,000 depending on the coverage desired.


Advertising plays a major role in running a successful used tire store. Advertising helps create name recognition and spread the word about products and services. Depending on the types of advertising used and the amount of advertising done, costs can vary widely, ranging from a few hundred to tens of thousands of dollars.

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Maintenance and repairs;

Running a used tire shop comes with many costs and expenses, including the cost of maintenance and repairs. Some common expenses to consider include the cost of labor, the cost of parts and materials, and the cost of additional services.

In 2018, the average cost of maintenance and repair services for a used tire store was ,514.13. This figure includes both labor and parts costs. However, this can vary greatly depending on store type and inventory size. Plus, the cost of routine maintenance and repairs can add up quickly if the tire shop owner doesn’t stay on top of the necessary work.

As a used tire shop owner, it’s important to be proactive about maintenance and repairs. Regular tire inspection and repair can help minimize the cost of labor, parts and materials. Staying on top of maintenance can also help identify potential problems before they become serious, avoiding costly repairs down the line.

Emergencies and breakdowns can also be costly for a used tire store owner. It is important to establish an emergency fund to cover unexpected repairs and other costs that may arise. Additionally, a workshop owner should consider investing in equipment or software that can help identify potential problems and alert the owner of any issues.


Advertising is an important part of any business. As a used tire store, it is crucial to have an effective advertising strategy to attract customers and generate brand awareness. An advertising campaign tailored to local customers and points of sale is a must for any used tire store.

The cost of advertising varies depending on the points of sale and the platforms used. In 2020, the United States saw average advertising costs between ,000 and ,600 per month. These costs extend to print and online media such as:

  • Print – newspaper, magazine and billboard ads
  • Online Media – Search Engine and Social Media Ads
  • Media defamation – TV, radio and podcast commercials

Advertising is an investment that can produce a big payoff for a used tire store. Not only does this increase brand awareness and attract customers, but it can also create a sense of trust and loyalty among the audience. As such, it is important for a used tire shop to adopt an appropriate advertising budget for their shop.

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Legal fees are a major component of any tire store operating budget, as they are required for various licensing and compliance needs. The latest statistics indicate that small businesses, including tire stores, spend an average of between ,000 and ,000 on legal fees and issues in the typical year. This money can go towards researching applicable regulations, creating or modifying policies, or obtaining necessary license, permission or zoning changes.

Specific legal costs for MSMEs, or micro, small and medium enterprises, will vary depending on geographic location and relevant laws. For example, fees for federal and state licenses, intellectual property protection, and compliance with labor laws can vary significantly depending on the state or country in which the company operates. Additionally, all businesses need to be properly insured in their respective area, a cost that can add up quickly in some industries.

In terms of global spending on legal activities, estimates show that companies dedicated 17.6% of their total budgets to legal services in 2020. This includes fees for attorneys, filing and court fees, insurance, regulators, consultants and workplace investigations. While it can be difficult to justify such expenditures, the potential legal ramifications for not investing in the necessary resources can be significant.


The operational costs of running a used tire shop can add up quickly, but with proper financial planning and budgeting, businesses can remain profitable. By carefully managing employee salaries, utilities, insurance, inventory and supplies, rent or lease, fees, maintenance and repairs, advertising and legal fees, tire shops opportunity can maximize profits, even in a competitive market. When businesses take the time to assess and manage their costs, they can maximize profits and take advantage of the growing demand for used tires and services.

For companies just entering the used tire shop market, understanding and budgeting for all the necessary costs can be an overwhelming task. However, with proper research and due diligence, businesses can prepare for the costs associated with running a successful used tire shop, including employee pay, utilities, insurance, inventory and supplies, rent or lease. , costs, maintenance and repairs, publicity and legal . This way, companies can take advantage of the growing demand for used tires and maximize profits.