Used Tire Company

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Executive Summary

Safe Roll Tires is a tire shop serving drivers in our city and the nearby towns. We sell inspected used tires and new tires, and mount, balance and repair them, at fair prices. A set of tires is a big expense, and many drivers cannot afford new ones. Used tires can be a safe, low-cost choice when they are carefully inspected, but some sellers do not check them or tell customers the truth. We will win customers by inspecting every tire, explaining what we see, pricing fairly and installing correctly. Here is what our numbers show. We expect sales of about $146,500 in Year 1, growing to about $586,000 by Year 5 as we add tire technicians and more repeat customers. We expect losses of about $51,300 in Year 1 and $44,800 in Year 2 while we build our customer base, then a profit from Year 3 (about $4,800), growing to about $68,500 by Year 5. We need $145,000 in total. That covers $34,500 in startup costs (a tire changer and balancer, a pickup vehicle, racks, opening inventory, registrations, insurance and a sign) and a cash cushion of about three months of bills. I am putting in $15,000 of my own money, and I am asking for $114,500 as an SBA 7(a) loan, plus $15,500 from an investor or partner. The startup costs include a used van or truck for pickup and delivery. I am Aisha Williams, the owner. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Safe Roll Tires will be a limited liability company (LLC) in Nebraska, owned by Aisha Williams. We will work from a small rented shop with two bays and a tire storage area. What we believe. Sell only tires we would put on our own car, tell customers the truth about every tire and price fairly. What we offer:
- Inspected used tires, installed and balanced. - New tires from trusted brands. - Flat repair, patching and rotation. - Mounting and balancing for customer-supplied tires. - Fleet and small business accounts. Licenses and insurance. Tire businesses are regulated. Most places require a business license, and tire disposal is regulated, because old tires cannot be dumped, so we use a registered waste tire hauler. Some states have rules for selling used tires, including minimum tread depth, age limits and inspection. Our state requires a minimum of 2/32 inch of tread for used tires and registered waste tire disposal. We carry general liability and garagekeepers insurance, which protects customers' vehicles in our care, and workers' compensation once we hire. Where things stand today. I have worked in a tire shop for five years, I have sold tires on weekends and I have found two reliable suppliers of used tires.

Problem & Opportunity

Drivers near us need safe tires at a price they can afford. 1. High prices. A set of new tires can cost more than many drivers can pay. 2. Unsafe used tires. Some used tires are old, damaged or worn and should not be sold. 3. Slow service. Many shops are booked for days. 4. Disposal costs. Old tires cost money to dispose of properly. How we know people want this. Fifteen friends and neighbors bought tires from me last year, and a small delivery business asked about regular service.

Products & Services

What we sell. 1. Used tire sales, installed. Inspected used tires with mounting and balancing. Our plan assumes an average of about $55 per tire in Year 1, rising to about $63 by Year 5. Sourcing the tire, disposal and direct costs run about $26 per tire. We expect about 1,800 tires in Year 1 (about 36 a week), growing to about 6,246 tires a year by Year 5. 2. New tire sales and repair services. New tires, flat repairs and related services. Our plan assumes an average of about $95 per job in Year 1, rising to about $107. Direct costs run about $58 per job. We expect about 500 jobs in Year 1, growing to about 1,799. Our prices. Used tire installed from $45. New tire installed from $85. Flat repair $20. How it works for the customer:
1. A quick quote by phone or in person, with the tire size and brand. 2. A look at each tire's date code, tread and sidewalls, explained to the customer. 3. Mounting, balancing and torque on the wheels, usually while the customer waits. 4. A written receipt and a short warranty on the install. Gross margin, explained. "Gross margin" is the share of each sale left after paying for materials and direct job costs. Our plan shows about 48% in Year 1. That money pays the owner and crew, vehicle costs, insurance and other bills.

Market Analysis

Who will hire us:
- Drivers on a budget who need safe, low-cost tires. - Owners of older cars and trucks. - Small businesses and delivery drivers with several vehicles. - Customers who need an emergency flat repair. Where we will work. A shop in a convenient location on a busy main road on the south side, near two auto repair shops. Season. Tire sales are steady all year, with spikes at the start of winter and in spring. Flat repairs are constant. Our plan is careful on purpose. About 36 tires a week in Year 1 is a pace the owner and one technician can handle well.

Competitive Landscape

Other choices customers have:
1. Larger tire chains. Tire World (a made-up name) charges about $90 for a mid-range new tire installed; known for selection, but pricey. 2. Other used tire shops. We compare their inspection and warranty practices. 3. Auto parts stores and online sellers. They do not install. How we will win customers: honest inspection, fair prices, fast service, correct installation and a short warranty.

Marketing & Sales Strategy

How people will find us. - A free Google business listing with photos and reviews, and a simple website. - Asking every happy customer for a review and a referral. - Banners and a clear sign on a busy road. - Relationships with mechanics, body shops and small fleets. - Offers for first-time customers. Marketing budget. About $5,000 a year. The sign, banners and website are paid for from startup costs.

Operations Plan

How the business runs day to day. Tires and customers. The owner buys and inspects used tires, mounts and balances them and manages the shop. In Year 1 the owner works with one technician, and we grow to three by Year 5. Each used tire is inspected, dated and logged, and old tires go to a registered hauler. Equipment. About $22,000 to start: tire changer; wheel balancer; used van or truck for pickup and delivery; air compressor and air tools; tire repair equipment; shelving and tire racks. We set aside about $3,000 to $4,000 a year for repairs and replacements. Upkeep. Tire changer and balancer serviced and calibrated regularly, air tools oiled and racks kept organized. Safety. Tires can be dangerous when inflated. We use cages and safe inflation practices, wear eye and ear protection, lift correctly and torque lug nuts to spec. We reject tires with damage, age or low tread. Running costs in Year 1: inventory sourcing and disposal fees about $10,000, equipment maintenance about $6,000, marketing about $5,000. Scheduling and billing. A simple point-of-sale system, with customers paying at pickup.

Management & Organization

Who runs the business. Aisha Williams, owner. As owner I will inspect and mount tires, source inventory, manage the shop, handle customers and handle the money side of the business. I plan to pay myself $48,000 a year in salary in Year 1. Crew. Tire technicians at about $34,000 a year each (or part-time pay): one in Year 1, two in Year 2, two in Year 3, three in Year 4 and three in Year 5. People who will help us: a bookkeeper or tax preparer, an insurance agent, and a free mentor from SCORE or the Small Business Development Center (SBDC). Brian Reyes serves as a key volunteer advisor.

Milestones Narrative

Our goals and when we plan to reach them. - Before starting: register the business and waste tire registration, get insurance, buy the equipment and inventory, and open the shop. Target start: March 2027. - First year: sell about 1,800 used tires and complete about 500 new tire and repair jobs, for about $146,500 in sales. - Year 2: add a second technician, about $232,600 in sales, and a loss of about $44,800. - Years 3 to 5: grow to three tire technicians and about $586,000 in sales by Year 5. Growth depends on hiring good people and winning the work, so treat the later years as goals, not promises. What we check every week: tires sold, tires rejected, flat repairs, returns, disposal costs, and cash in the bank.

Funding Request

How much we need and how we will use it. Total needed: $145,000. The Funding Need Calculator in this plan shows a minimum, and we plan to raise a little more than that so the loan payments in the early years are also covered. The calculator's number adds up: - Startup costs of $34,500, listed item by item in the Startup Costs section (about $22,000 for the tire changer, balancer, vehicle, air tools, repair equipment and racks, $6,000 for opening inspected used tires, $800 for the business license and waste tire registration, $3,000 for the first insurance payment, $700 for business setup and bookkeeping software, and $2,000 for the sign, banners and a website). - A cash cushion of about $107,500: the deepest cash dip in the early months plus about three months of bills, so slow weeks do not put the business at risk. Lenders call this "working capital." - Together that comes to about $129,500 (rounded up to the nearest $500), which is the minimum the calculator shows. We are planning for $145,000, which adds room for the early loan payments. Where the money comes from: - My own money: $15,000. - Amount requested: $114,500. - From an investor or partner: $15,500. Kind of funding we are looking for: an SBA 7(a) loan through a local bank or community lender, plus investor or partner money, which is not paid back with interest but gives that person a share of the business. How we will pay it back. We expect losses of about $51,300 in Year 1 and $44,800 in Year 2 while we build our customer base, then a profit from Year 3 (about $4,800), growing to about $68,500 by Year 5. With this funding, the business has money in the bank every year of the plan. The loan is planned at 12.75% interest over 10 years, the most the SBA allows for a loan this size, so payments of about $1,693 a month are already included in our cash flow. What we are offering the lender: our equipment and inventory and my personal guarantee A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan: - Phase 1: start with a mobile service or a small bay, selling and installing a few used tires on evenings and weekends, while keeping your current job. Startup can be under $2,500. - Phase 2: once you have regular customers, rent a shop, buy a tire changer and balancer and follow this plan. To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match. Rules for selling used tires vary by state, and this plan only budgets a waste tire registration fee. Check your state's requirements and costs before opening. All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume (one page is fine) and any licenses or certificates. - A personal financial statement (a list of what you own and what you owe; lenders usually provide a form). - Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov). - Proof of insurance, or a quote. - Your waste tire registration and your supplier information. - Quotes for the tire changer, balancer and vehicle. - Your price list and a sample warranty. If you don't have any of this yet, no worries - let's continue. The assumptions behind our numbers (change them in the Financials section to match your own):
- Used Tire Sales (per tire, installed): about $55 per tire in Year 1, rising to $63; about $26 per tire in direct costs; about 1,800 tires in Year 1, growing to 6,246. - New Tire Sales & Repair Services: about $95 per job in Year 1, rising to $107; about $58 per job in direct costs; about 500 jobs in Year 1, growing to 1,799. - Owner salary: $48,000 a year. Crew: $34,000 a year each, from one in Year 1 to three in Year 5. - Other yearly costs in Year 1: inventory sourcing and disposal fees about $10,000, equipment maintenance about $6,000, marketing about $5,000. - Tax rate: 21%. - Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs