Business Structures for Setting up a Tyre Retailer

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Table of Contents

• Entering a Tyre Retailing Franchise
• Setting up a Tyre Retailing Business as a Sole Trader
• Key Takeaways

The tyre retailing industry in Australia generated $4.6 billion revenue last year. With the increase in the number of motor vehicles on Australian roads, more wholesalers and retailers have entered the market. If you are considering to open a tyre retailer business, it is important that you consider which business structure you will choose. Choosing a business structure is one of the most important decisions you will make for your business as it will have a significant and lasting impact on its future. You should be aware of any liability the business structure will subject you to and seek legal advice if you feel that you need clarification.

Entering a Tyre Retailing Franchise

You may wish to choose a franchise business structure for your tyre retailing business. However, there are two ways to look at the franchise business structure, which will have an impact upon it suitability for you.

The first option available to you is to join an already existing franchise. The Australian tyre retailer market has some big players including Good Year Australia Limited (Beaurepaires, Goodyear Autocare and Dunlop Super Dealers), Bridgestone Australia Ltd, Tyrepower Ltd, and Bob Jane Corporation Pty Ltd. Joining a franchise will allow you to take on the goodwill of an already established brand, which will make the initial process of setting up your new business substantially easier. Also, joining an established franchise will mean that you can rely upon experienced business owners who are well acquainted with the numerous pitfalls within the market, allowing them to negotiate around them with relative ease.

The second option available to you could be to create your own franchise business if you already have a tyre retailing business. This structure could be advisable if your tyre retailing business has capital and you are looking to expand. The benefit of choosing a franchise is that it is a highly devolved business structure, allowing you to focus on the growth and strategy of your business, rather than micromanaging all of the moving parts. Also, once a franchise is established, supplies can be bought in bulk, or in the tyre retailing business, deals could be struck with petrol stations, mechanics, etc. if you have enough members.

Setting up a Tyre Retailing Business as a Sole Trader

Another option available to you is that of a sole trader business structure. This structure will provide you with the most control over your tyre retailing business out of all the options available to you. Indeed, consumers are increasingly going to independent outlets to have low-cost tyres fitted.

The benefit of a sole trader business structure is that you have complete ownership and control over profits. Consequently, a sole trader can choose exactly where capital is required or choose to spend profits on personal travel or expenses if the business is going well.

However, due to this control and ability to access profits, a sole trader will be personally liable for any debts incurred during the running of business. Therefore, although this structure of business is cheaper to create and easy to run, it does blur the line between personal and business life. As a result was you to choose this business structure for your tyre retailing business, this liability should be at the forefront of any decision you make.

Key Takeaways

The Tyre Retailing industry exhibits a high level of competition.If you are looking to start your tyre retailing business or expand your already existing tyre retailing business, it is important that you consider which business structure you will choose. Our business structuring lawyers can assist you with setting up your tyre retailing business, as well as register any trademarks or draft employment contracts.