Valuation Methods
When valuing a tire store business, commonly used methods are the Income approach using the Discounted Cash Flow (DCF) method, the Market approach using the Comparable sales method, and the Asset approach using the Replacement cost method. Earnings before interest, taxes, depreciation and amortization (EBITDA) is the most accepted way to value a business.
Profitability and Growth Strategies
Increasing sales can come from raising ad expenditures where advertising has already proven effective, proactively soliciting referrals from existing clients, and building a direct-to-consumer email list. Selling and recycling used tires is profitable, earning over $100 a day. Tire mounting and balancing earns $15 to $45 per tire sold.
Revenue and Profit Margins
What is the average revenue of a tire store?
Tire businesses require little capital investment and produce high profits, around $200,000 annually. Useful business models are increasing average ticket size with value-added services and financing options. Also streamline inventory management using tracking software, leverage social media for better exposure, and focus on tangible assets like inventory and equipment when valuating.
Questions About Business Potential
Is there money in the tire business?
A tire business requires little capital investment and produces high profits, around $200,000 annually. The average annual revenue ranges from several hundred thousand to several million dollars. Offer services like online ordering and mobile installation.