How do I check a tire shop’s seasonal storage business before buying?
Ask for the storage log: which customers store tires, how long they have done so and what they pay. Count what is physically in the racks and match it to the log. Then check whether the space comes with the lease and who is responsible for stored tires if they are lost or damaged.
The storage service rests on records. Ask for a list of customers with their vehicles, tire details, drop-off and pickup dates, and what they pay. Walk the racks and check that tags match the list. Gaps between the two suggest sloppy record-keeping, and a stored set with no owner is a problem for you to solve.
Look at timing. Storage income arrives in the changeover seasons and may be slow in between, so ask how the shop manages cash across the year. Ask how many customers return every season, since a loyal base is the point of the service. Ask whether customers prepay or pay at pick-up.
Then check the space and the risk. Read the lease to see whether storage areas are included and can be used that way. Ask your insurer how stored customer property is covered, and what the shop promises customers on loss, damage or fire. Finally, ask how the shop handles tires that are never collected, and what its paperwork says. Visit during a changeover rush to see how the shop copes with volume, labelling and customer waiting times.
Key takeaways
- Match the storage log against what is actually on the racks.
- Ask how many customers return each season and how they pay.
- Confirm in the lease that the storage space can be used.
- Ask your insurer how stored customer property is covered.
Related reading
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Buying
- GuideBuying a franchised auto repair shop in Canada
- GuideBuying an auto body and collision repair shop in Canada
- GuideBuying an auto glass repair and replacement shop in Canada
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Financing
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernment13 terms you need to understand before signing your commercial real estate lease
- 03Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 04Business Development Bank of CanadaGovernmentUnderstanding post-merger operational integration
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