14 June 2020
From the JoinPAY archive. Information reflects the original publication date.
Many people are thinking about opening a tire repair shop. It seems that in the season of changing wheels – this is a real "gold mine". Let's figure out how and how much can the owner of a tire shop earn?
The ideal legal form for opening a workshop for urgent tire repair is an individual entrepreneur, the tax regime in this type of business is suitable for both patent and USN (Simplified Tax System).
One of the pleasant features when opening a tire shop is the factor of its location. Of course, there is no need to rent in the city center, but the presence of parking lots and large residential areas will positively play on the customers' flow.
For those who want to open a business for a month in honor of "Tinker's day", there is bad news – it is unlikely that someone will agree to rent you a space for short-term rent. And it is better to keep the tire service on a permanent basis so "the people's path does not overgrow". On average, renting a room for tire service can cost an entrepreneur $300-$350 a month.
Alternatively, you can negotiate with a car service that does not offer tire repair services. So you are guaranteed to get a stream of customers and will be able to negotiate the lease of premises on more favorable terms.
The necessary set of equipment for opening a tire shop is:
- Machine for tire repair – from $400 to $3000 , depending on manual or electric drive you will use.
- Jack or lift – from $80 to $3000 – it all depends on the type of services, which you plan to implement.
- Balancing stand – from $400 to $7000 - prices vary depending on the design of the stand (manual rotation and motorized drive) and applications-passenger cars, trucks or universal.
- Compressor: standard models can be purchased from $80, and more powerful and professional equipment will cost from $100 to $1200.
- Vulcanizer (for cars or trucks, universal) - from $100 to $2000.
- Start-up charger – the price of the product depends on the type of car, operating voltage and rated capacity, varies from $50 to $500.
- A set of tools and an initial set of accessories and consumables - $500-$700.
- A cash register that meets the requirements of Federal law
The selection of employees in the tire service must be approached very carefully. Here a significant role is played by skill and experience. Incomplete nuts or poor installation can have a disastrous effect on your business, and if an employee does not come to work in the "season", as a result of their indiscipline, this will affect the revenue.
The most standard tire repair service – "tire change" - on average is $10 per passenger car. If you have two employees and not the most sophisticated equipment, your tire shop can serve up to 30 customers per work shift. Thus, the daily revenue can be $300, and the monthly revenue can be about $6300. All the figures are based on seasonal demand, but the amounts will be completely different in the off-season.
Now about expenses. The main expenses of tire repair will be the payment of wages to employees – about 55% of all revenue, plus this amount is the cost of deductions for social contributions (according to Russian laws). Then, it is rent – 10%, taxes – if you make your choice in favor of the USN, it is 6%, if the patent, the amount will depend on the region where you provide services. To check the amount of deductions according to the patent, you can on the tax service's website. Do not forget about consumables that need to be constantly replenished – sealant, balancing weights, etc.
And now about the pleasant - about the net profit for the entrepreneur. Experienced owners of tire repair services talk about the net annual profit of up to $14000. But here you need to understand that if in the season the monthly amount of profit can reach $2900 on hand, but not in the season everything is much sadder. The profit may even go to $300 a month.
Tire shop can become a profitable business if there are several such points or they are based in a complex with an auto repair shop. Many business owners combine the business of changing and repairing wheels with their main job.
Whether to open a tire shop or not is up to you, but we advise you to immediately think about automating your business. Because in such a place as a tire shop, you need constant control over the staff – unscrupulous masters can easily lead customers past the cash register or earn on consumables, which can negatively affect the reputation of the tire shop or even lead to an accident.
JoinPAY Smart Cash Register will help you monitor your employees. You can remotely monitor the status of the workshop online from your personal account – see a report on revenue, profit, and average receipt.