13 hours ago
Going viral on TikTok helped Pitstop Tyres clear S$400,000 of debt; now second-gen owner wants to make it Singapore's top auto shop
[SINGAPORE] Once on the brink of bankruptcy, home-grown auto repair shop Pitstop Tyres is now making more than S$1 million in annual revenue – thanks to its second-generation owner's fresh approach.
When Cordillia Tan joined the family business in end-2020, she brought along her experience in a venture capital firm, where she helped early-stage startups accelerate their growth.
But she did not expect to spend the next few years trying to pull the company out of debt.
Her father, Edmund Tan, opened Pitstop Tyres in 2009 after a career in the industry – first as a tyre fitter and then a factory manager, in companies including Singapore-listed Stamford Tyres.
The business was running well until a discovery of financial misconduct forced him to clean house and hire afresh for many roles. The Covid-19 pandemic struck soon after, making it challenging for the business to regain momentum.
But the elder Tan never revealed to his family how badly the business was doing.
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'My father was very worried to tell the family that the banks were chasing him, and the business was struggling,' said Cordillia Tan in an interview with The Business Times.
She uncovered the extent of the company's financial troubles only after she saw first-hand the outstanding bills and declining sales.
The business was clocking just S$15,000 in monthly revenue, servicing only three to five vehicles daily. At the same time, it was overdue on utility bills and owed multiple suppliers money.
Problem-solving
To help her father's business survive, Tan applied her experience in helping startups to scale.
But first, she had to get up to speed on how the automotive industry worked. 'I thought I would be in the corporate world for the rest of my life, so I did not even have a driving licence,' she admitted.
She recalled an embarrassing incident where her mechanic had asked her to step on the car brake, but she did not know which pedal that was. After that, she took part-time automotive courses.
'I did all the short courses that were available, so at least I would not be an idiot; and when I open the bonnet, I know what is going on.'
Her next challenge was understanding the business well enough to tackle its problems.
'My mistake was that being startup-savvy, I knew all the right strategies to bring. But I did not realise how difficult it would be to bring those things into an SME (small and medium-sized enterprise).'
Sales funnels and customer relationship management systems, for example, can be easily adopted by young startups with organised processes, she noted.
But if an SME has years of fragmented customer data, records and processes have to be fixed before new strategies can be implemented.
'When I came in, it was very hard for me to prioritise anything, because I was just problem-solving,' she said.
Beyond overhauling internal processes, she also had to negotiate and rebuild relationships with suppliers who were unhappy due to the outstanding debts.
'I was walking up and down Chinatown to lawyers' offices to ask if we could negotiate with their clients to come up with a payment plan.'
In early 2023, Pitstop Tyres expanded its services beyond tyre sales and replacements. PHOTO: KEZIA LEVIANNE KOO, BT
Turning point
Beyond fixing problems, the business also needed new ways of generating revenue. So in August 2021, Tan turned to TikTok to market the business.
It took eight months of trial and error, and steady content, before she made a breakthrough. She found success in making educational content about car maintenance, sharing what she learnt as she went along.
As views went up, so did the number of customers, boosting monthly revenue to a range of S$30,000 to S$60,000.
Yet, while higher revenues helped to cover costs, this did not make a dent in the debt.
In early 2023, Pitstop Tyres began to expand its services beyond tyre sales and replacements to include rim repairs as well as general car repair and maintenance.
The move to diversify was also because tyre sales do not have good profit margins, said Tan. These new services now contribute half of the company's revenue, with the rest from tyre sales.
Having more services also necessitated a move to a bigger shop – an investment which she felt was worth making to accommodate the additional equipment and parking space needed to scale the business.
'Even though it was a very painful decision to throw all the money saved up into the deposit for this (new) shop, I think we really just had no choice but to move here,' she said.
New ambitions
Pitstop Tyres has not yet turned profitable, but is on track to clear its debt in two years.
Instead of a target for annual revenue, Tan has a salary target for employees, hoping to give annual increments of 10 to 20 per cent.
With the debt-free goal in sight, she wants to focus on customer service, with the eventual aim of becoming Singapore's top automotive shop.
'I want to make sure that the experience at my workshop is unmatched (by others),' she said. 'So instead of trying to expand outwards, what I want to do is to make sure that everything in my shop is tight so that we do not need to chase business.'
Pitstop Tyres makes in-store pricing prominent so that customers know exactly what they are paying for, she said, noting that car workshops are often seen as having shady business practices.
'I want everything to just be transparent and honest,' she said. 'This is my way of doing business.'
In 2024, Edmund Tan retired from the business, leaving his daughter fully in charge. Reflecting on her entrepreneurial journey, Cordillia Tan said: '(Back when I joined), I did not have any vision for the company. I just knew that I was suffering.'
'I was very proud of the company surviving, definitely. Not dying is an achievement,' she added. 'So I'm very happy with how far we've come. And I would say I'm proud of the team I've built.'
