In today’s competitive tire and automotive service industry, scale isn’t just an advantage. It’s often a requirement for long-term survival.
As margins tighten, competition increases and consumer expectations evolve, dealers who want to remain relevant and profitable must consider growth strategies that go beyond organic expansion. For many, the most effective — and scalable — option is growth through acquisition.is article is designed to give you an actionable roadmap to acquiring other businesses and growing with intention.
From evaluating your readiness to integrating new locations, here’s what you need to know to pursue acquisitions — and their integration — with clarity and confidence.
Step 1: Understand why you want to acquire.
Before you start eyeing your next location, take a step back. Why are you pursuing acquisitions in the first place? Is it to enter new markets, gain more buying power, access new customer bases or acquire top talent? Clearly defining your “why” is essential because it will guide every decision from here on out.
Think beyond financial performance. Strategic acquisitions should align with your long-term vision. Whether you’re looking to become a regional leader, expand your service offerings or simply increase valuation for a future exit, know what success looks like before you start. In short, what matters to you?
Step 2: Assess your readiness scale.
Acquiring a business is easy. Successfully operating one after acquisition? Much harder. Ask yourself, “Do I have the leadership, systems, processes and capital to take this on?” Here are a few questions to consider:
- Do you have a management team that can operate independently of your direct involvement?
- Are financials clean, accurate and timely?
- Do you have a repeatable playbook for operations, staffing and customer service?
- Do you have capacity (in-house or external) to evaluate, negotiate and close a deal?
If the answer to any of these is no, consider slowing down and building upon your foundation first. Scaling on shaky ground can be disastrous, especially if you are aiming to build something enduring rather than a quick flip. If you want to build a skyscraper, you can’t do it on the foundation for a townhouse.
Not ready to acquire today? That’s OK.
Many great operators aren’t. But acquisition readiness is something you can build toward. Think of it like training for a race: the sooner you start preparing, the more confident and capable you’ll be when the opportunity arises. Here are a few smart moves to make now:
- Strengthen your financials. Clean, timely books and strong EBITDA aren’t just for sale-readiness. They help you run better. Set up monthly reporting, understand your margins by service line and track KPIs religiously. If you can’t measure your business’ performance, how can you manage it?
- Document your processes. Turn tribal knowledge into standard operating procedures. This makes scaling smoother and builds enterprise value, even if you’re years from selling or acquiring.
- Build your bench. Start identifying and developing leaders who can take on more responsibility. A team that operates without your constant input is a gamechanger for growth and quality of life.
Think like a buyer. Even if you’re not ready to buy, start looking at listings.
What’s out there? It’s like studying game film. The more you watch, the sharper your instincts.
Acquisitions aren’t only for those who are ready now. They’re also for those who will be ready soon. Lay the groundwork today and tomorrow’s opportunity won’t feel so far away.
Step 3: Define your criteria.
All businesses are not created equal. You want to define your target profile early. Consider the following:
- Geography. Are you looking to expand in your region or enter new markets?
- Revenue size. What size shop can you comfortably acquire and support?
- Service mix. Do you want to offer general auto repair, tire-focused services, fleet services or a combination?
- Culture. Are you looking for businesses with a strong culture and a great team or ones that are in need of a turnaround and can be acquired at a good value?
Clarity here will help you eliminate distractions and pursue only the most strategic opportunities. You can afford to be picky.
Step 4: Build a pipeline and source deals.
Finding great businesses to buy takes more than waiting for listings to appear online. In fact, many listings represent opportunities you’ll want to avoid.
Don’t pick the low-hanging fruit. Build a multi-channel strategy by:
- Networking with other owners, vendors and associations;
- Letting your suppliers and their reps know you’re actively looking;
- Considering working with a specialized broker or M&A advisor or at least reaching out to some to let them know you are in the market as a buyer; and
- Using direct outreach — letters, emails and calls — to other tire dealers and shop owners in your target area. The best deals often never go to market. Position yourself as a serious buyer and opportunities will begin to surface.
Finding good deals makes the rest of the process substantially easier.
Step 5: Build relationships, not just pipelines.
Finding great shops to buy is only part of the equation. Earning the trust of and building rapport with their owners is what closes deals. Many sellers in the tire segment are founders or longtime operators.
Their businesses aren’t just a livelihood, but their legacy. They want to know things are in good hands.
Approach every conversation with empathy. Ask thoughtful questions.
Listen more than you pitch. Often, what sellers want is someone who will honor their team, take care of their customers and carry the brand forward with pride. That trust can unlock better deal terms, smoother transitions and the stickiness needed when things get tough.
In many cases, you’re not just buying a business. You’re becoming the steward of a life’s work. And remember we’re in a big industry, but it’s a small world. Word travels. Keep your reputation in mind.
Step 6: Lock down debt and equity.
Acquisitions require capital. While some buyers use only cash, most will leverage debt or outside equity to fund the deal. You should understand your borrowing capacity and what you can contribute personally.
Talk to local and regional banks, as well as specialty lenders in the auto space.
Small Business Administration loans can be a great option for certain deals.
For scaled companies, the private debt markets represent a major opportunity.
When thinking about equity, are you willing to give up a piece of ownership in exchange for capital? Strategic partners, family offices, high net worth individuals or private equity forms can all be sources of equity. And make sure your financials are in order and you have a clear plan for how an acquisition will create value. Capital providers want to see both.
Another thing capital providers are attracted to is multiple arbitrage. One of the greatest financial advantages of acquisitions is the ability to benefit from multiple arbitrage. Simply put, the more profitable and scalable your business becomes, the more it’s worth.
For example, a single-location shop might trade at 3x to 4x EBITDA, while a larger, multi-location operation with strong systems and leadership might be worth 6x to 8x. By acquiring a smaller shop at a lower multiple and rolling it into a larger platform, you can create immediate value — sometimes doubling your investment — before even improving the business operationally.
It’s a key strategy used by private equity forms and one that smart operators can use too. When envisioning an eventual exit, allocating capital to exploit multiple arbitrage opportunities allows for outsized return potential.
Step 7: Execute the deal.
Once you’ve identified a business and have agreed on basic terms, you’ll enter due diligence and final negotiations. Here’s how to get through it:
- Hire an experienced attorney and accountant who knows small business transactions.
- Request and review financials, leases, vendor contracts, employee agreements, etc.
- Be clear on what’s included: inventory, equipment, real estate customer lists and more.
- Figure out working capital calculations early on and set expectations.
- Finalize your financing.
Negotiate thoughtfully, but act with urgency. Deals often fall apart due to delays and indecision. As the saying goes, time kills all deals.
Another critical consideration: understand how the seller is handling internal communication about the transaction.
Who within the organization is aware of the potential sale? Have any promises been made to employees that the buyer should be aware of?
Gaining clarity on what has been communicated internally can make a significant difference in ensuring a smooth transition.
Step 8: Integration.
Congratulations!
The deal is done. As it turns out, though, you haven’t crossed the finish line. You’ve only reached the starting line! Now comes what is perhaps the most important part: integration. Your ability to fold a new shop into your operations without disrupting culture, quality or customer experience will determine your success. Focus on:
- Clear communication with staff — both your team and the acquired team;
- Standardizing systems and processes;
- Aligning incentives; and
- Listening and learning. Why? Every shop has its own unique strengths. Respect what works.
Integration can take months or even longer. Don’t rush it, but don’t let it drift either. Have a plan and stay engaged.
Additional thoughts
Acquisitions aren’t just about getting bigger. They’re about getting better.
If you have the right foundation and mindset, acquisitions can serve as the ultimate accelerator — building your brand, expanding your reach and creating a business that not only thrives today, but stands the test of time.
Imagine a business that no longer depends on you for every decision — with multiple thriving locations, a loyal team and loyal customers. Imagine having the resources and the time to focus on strategy, growth or simply enjoying the fruits of what you’ve built.
Acquisitions, when done right, are about building a business that supports your goals and your future. That’s the power of scaling with intention.
