Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your executive summary is to get the reader’s attention quickly. Tell them what kind of tire shop you have and how it’s doing. For instance, are you a new business, do you own a tire shop that you want to grow, or do you run a chain of tire shops?
Next, give an overview of each part of your plan that follows.
- Give a quick summary of the tire shop business.
- Talk about the kind of tire shop you run.
- Detail your direct competitors. Tell us about your ideal customers.
- Give a quick summary of your marketing plan. Find the important people on your team.
- Give an overview of how you plan to handle your money.
In your business summary, you will explain what kind of tire shop you run.
For instance, you could focus on one of the following kinds of tire shops:
- Retail: This type of tire shop sells both new and used, cheap and expensive tires. They mostly sell tires from the most popular brands.
- Discount: This kind of tire shop focuses on selling cheap tires that their customers can afford. They will also have used tires that aren’t too worn and can be sold at a discount.
- Full-service: This kind of tire shop sells tires and also rotates tires, changes oil, and does other small mechanical jobs.
In the company overview, you need to say what kind of tire shop you will run and give some background information about the business.
Include answers to things like:
- When did you start your business, and why?
- What important steps have you taken so far? Milestones could be the number of customers served, the number of customers with positive reviews, reaching X number of customers served, etc.
- Your legal stuff Are you set up as an S-Corporation? An LLC? A single-person business? Tell us about your legal structure.
In your industry or market analysis, you need to give an overview of the tire shop industry.
Even though this may seem pointless, it has more than one use.
First, learning about the tire shop business gives you information. It gives you a better idea of the market you are in.
Second, market research can help you make a better marketing plan, especially if you use it to find market trends.
The third reason is to show readers that you know what you’re talking about. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your tire shop business plan, you should answer the following questions:
- How big (in dollars) is the tire shop business?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big is your tire shop’s potential market? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the customer analysis section of your tire shop business plan, you must explain who you serve and/or who you hope to serve.
Individuals, schools, and businesses are all examples of customer segments.
As you might guess, the type of tire shop you run will depend a lot on the customer segment(s) you choose. People and businesses would respond differently to marketing campaigns, for example.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, you should talk about the ages, genders, locations, and levels of income of the people you want to serve.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to find and keep customers.
In your competitive analysis, you should figure out who your business’s direct competitors are and then focus on them.
Other tire shops are their main competitors.
Indirect competitors are other things that customers can buy besides your product or service that are not in direct competition with it. This includes places like car lots, big-box stores, and auto shops. You should also talk about this kind of competition.
Give an overview of their business and a list of their strengths and weaknesses for each of these competitors. Unless you’ve worked for one of your competitors, you won’t know everything about them. But you should be able to find out important information about them, like
- What kinds of clients do they work with?
- What kind of shop do they have?
- How much do they cost (high, low, etc.)?
- What do they do well?
- Where do they fall short?
For the last two questions, try to answer them from the point of view of your customers. Don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways in which you are better than your competitors. For instance:
Do you offer any other kinds of mechanical services besides changing tires?
- Will you sell things that your competitors don’t have?
- Will you give better service to your customers?
- Will your prices be better?
Think of ways you can do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for a tire shop business plan should include the following:
Product: In the product section, you should say again what kind of tire shop your business is, just like you did in your company overview. Then, explain what products or services you will be selling. For example, do you offer oil changes, free tire rotations, repairs for tire leaks or damage, or inspections?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In the product and price sections of your plan, you show what products or services you offer and how much they cost.
Place is where your tire shop is located. Write down where your business is and how the location will affect your success. For example, is your tire shop in a busy shopping area, a busy neighborhood, on its own, or right next to an auto repair shop? Talk about why your site may be the best place for your customers.
Promotions: In the last part of your tire shop’s marketing plan, you’ll write down how you’ll get people to come to your shop (s). Here are some ways you could promote your business:
- Advertise in the local newspapers, radio stations, and/or magazines
- Get in touch with websites
- Put out flyers
- Engage in email marketing
- Place ads on social media sites
- Improve your website’s SEO (search engine optimization) for specific keywords
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the things you need to do to run your tire shop, like taking inventory of tires, helping customers and billing them, scheduling staff hours and paying them, etc.
Long-term goals are the goals you want to reach in the future. These could be the dates when you think you’ll sell your Xth tire or when you hope to make $X. It could also be when you plan to move your tire shop to a new city.
A strong management team is needed to show that your tire shop has the potential to do well. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or other members of your team should have direct experience running tire shops. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business by giving advice. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have run a tire shop or an auto repair shop successfully.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all parts of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, do you sell 5 tires a day and/or offer discounts for buying more than one? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
The Balance Sheets
Balance sheets list what you own and what you owe. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 to build out your tire shop, you won’t start making money right away. Instead, it is an asset that you can use to make money for years to come. Also, if someone gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Statement of Cash Flow
Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing a tire shop:
- Cost of inventory of equipment and tires
- Payroll or wages given to employees Business insurance
- If you’re starting a new business, you’ll also have to pay for legal fees, permits, computer software, and equipment.