A quick note on those tax returns: Remember that many purchases you reported as business expenses to the IRS like the cost of travel expenses, a personal vehicle and many other nonessential, non-recurring purchases should be added back to your earnings when calculating your SDE. Often, sellers keep their business liabilities and pay off their debt after their business is sold. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. (Buyers might ask about your discretionary cash flow when you offer them your valuation, so be prepared to include and value each major expense or purchase.). Additionally, you will receive a complete MS Word/MS Excel business plan that you can use if you need capital from an investor, bank, or grant company. These are some of the most efficient cars to ever be driven. Over half of these competitors offer both auto repair services, although without an inventory store. You'll need a minimum of $50,000 cash as a startup fee. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. The visitor industry provides employment for more than 160,000 people. into the automotive business. Note that each of the three co-owners will invest an equal amount. This is another opportunity to seek the counsel of a mentor or a professional advisor, who can provide insight into your businesss assets from a more objective perspective. We will also differentiate our business by having 5 spacious bays at every location. One common method used to value small businesses is based on seller's discretionary earnings (SDE). 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Industry Overview 2. buying and selling) over the last 15 years. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. Make sure your company checks these three boxes: You make steady profits. Next, you'll need to outline your business plan and model. Our partners compensate us. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. Read more. (Car Wash Magazine), #7. Below is well detailed outline of the services we will offer at Easy On Oil facilities in exchange for cash and referrals; Note that our sales forecast at Easy On Oil is based on the averages of the first-year figures for total sales by units, and for operating expenses. Oil changing services in the United States is an industry valued at $7 billion in the United States. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. Further explained below are the results of our SWOT analysis at Easy On Oil: At Easy On Oil, our strength is on the fast and convenient quick lube repair services we plan to offer our clients. No matter what, applications must be filled out and fees paid. At Easy On Oil, we will differentiate ourselves by not only offering oil change or other automotive maintenance services, but by also providing customers with a stocked lubricant and parts store. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. In order to see how electric cars are impacting the future of the automotive repair industry, it is important to understand how they work in the first place. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. Based on currently available information, Valvoline has a total of 1,595 system-wide stores. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. Another common method attributes value to a business based solely on its assets. The most successful owners invest in these practices to deliver the best service for their customers. Capitalization of earnings method: The capitalization of earnings method also calculates a businesss future profitability, taking into account the businesss cash flow, annual rate of return, or ROI, and its expected value. When only stand-alone quick lube locations are examined in the industry, about 5,000 firms currently operate in this space and produce revenues of about $5 billion annually. Most likely, business owners will provide you with that number, so its important to understand how the business owner reached that value, and what these values reflect about the actual business. Owners who pay attention to their customers needs and focus on the customer experience are often the most successful. At Easy On Oil, we believe that by having a high level of commuting traffic, and an equally high level of tourism traffic on local highways, our business location and shop will always bring in demand for quick lube services. The company would need to have sales decrease by more than 30% before we can be unable to satisfy our month to month financial obligations. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. If you are contemplating a transaction in the auto service sector I can One Independent Quick Lube w/RE in East-Central South Dakota! People are graciously buying cars and comfort. Implement an ongoing training program. What often separates one lube shop from another is its creative marketing strategies. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . So how do we make money? The service requires full cookie support in order to view this website. Quick Lube operating income is up to $162 million TTM . Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. (Valvoline). Each uses a different aspect or variable of a business to calculate its numerical value either a businesss income, assets, or using market data on similar companies. NerdWallet strives to keep its information accurate and up to date. In comparison, leasing costs are just 9% of the overall expenses for the average location. Order Reprints. Disclaimer: NerdWallet strives to keep its information accurate and up to date. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. In fact, with our location distribution we cover the market. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. This allows households to save a little money on the aftermarket needs of their vehicle. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Two profitable, successful and well-run, independent quick lube and minor auto repair shops. But as a seller, you have to put some number on your operation, especially if you want to be compensated for what you've built, taking into account all kinds of equity. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! Joe handled every aspect and obstacle that presented itself throughout the sales As we mentioned earlier, a businesss SDE multiple and the method of valuation varies according to a few factors, including the strength of the industry. Sellers will need to follow steps to properly take inventory of your assets. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. Please enable cookies on your browser and try again. At Easy On Oil, our major weaknesses will be the time and resources it will take us to establish and publicize our services to the people of San Diego. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. (Thats why this number is subtracted from the SDE in valuation calculations.) But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. We will always stress the fact that we only offer reliable services. Here is a list of our partners. This is where you come in! Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. We plan to offer our clients personalized service by offering convenience and rapid service. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. We will give a guarantee on all our repairs for a certain amount of miles or time. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. The quick lube industry is growing rapidly. As franchises in the industry go, Victory Lane keeps it simple. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. This company offers true quick oil change and a new filter. Full range of Auto Lubricants and Repair Parts store. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. So, sellers should find out as much as they can about companies that are similar in size, business model, and revenue, if that information is available. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Easy On Oil is an exciting business opportunity that addresses the unmet need of having a spacious quick lube facility that also has a complete automotive parts store. Sources: New Constructs, LLC and company filings. Just 9% of customers come from a 2-mile radius. Here is a list of our partners and here's how we make money. We at Easy On Oil have analysed this and we will favorably compete by focusing on convenience and offering a high level of customer service. Small companies can compete successfully by owning favorable locations. 89% of quick lube locations offer a transmission fluid drain and flush service in the United States, with an average cost of $107.60 per service. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Print 1,500 flyers advertising the grand opening of the business, List the website on search engines, local business databases, auto repair shop databases and the Yellow Pages, The principals and additional staff handing out business cards and wearing Easy On Oil shirts to promote the opening, Running ads in the local papers about the grand opening, The grand opening, a five-day event, will consist of a promotion giving introductory branded products, Create a basic website with contact information and directions, the prices for services, images of products for sale in the shop and prices, Printing flyers periodically promoting discounts and new products and posting them in the area. But if you have more financial information on hand, you can try a more comprehensive business valuation tool that includes both profit and revenue, as well as assets and liability, in the calculation. These services will include full oil changes, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. Our vision at Easy On Oil is to become the leading business that offers Quick Lube repair services and a well-stocked repair parts shop in San Diego, California. So, most maintenance on electric cars will be more software driven. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. Then, you can demonstrate to potential buyers what makes your business stand out. explaining everything in detail. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. First, though, you have to get your financial information in order. (Buyers might ask about your discretionary cash flow when you offer them your valuation, so be prepared to include and value each major expense or purchase.). Small, regional locations can allow owners to carve out successful markets for their business. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). (Digital Dealer), #19. Particularly if this is your first company, or if you run a family-owned and operated business, take care to approach valuation as objectively as possible to come to an accurate number. The cost of an oil. SWOT Analysis 7. Why do diesel exhaust fluid (DEF) prices keep rising and falling? (IBIS World), #2. As 2018 kicked off, Jiffy Lube launched a new brand extension. Together with our team, these experts will help ensure you get the best Our Mission and Vision Statement 5. And with hundreds of millions of vehicles on U.S. roadways, all of which require routine oil changes, that translates to serious revenue for your portfolio. Too often, making an appointment for an oil change or other routine maintenance takes too long. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. This method can be used to value a business for sale as well as raising capital. At Easy On Oil, weve made plans to create a significantly large regular customer base. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. Contact us today! Often, the site is good, but the former business either lost their lease, got tired of the business, or was operating without a National brand behind them. The most popular has been around for a while, hybrid-electric cars. To start off, there are two major types of electric cars that are on the roads today. When evaluating offers, please review the financial institutions Terms and Conditions. This means intellectual property, your production line, your delivery truck if its a part of your business, you'll either need to account for it as an asset or a liability. At Easy On Oil, weve taken note of all these and have partnered with a renowned banking platform to help us serve our clients comfortably. (Business Wire), #16. These 10 chains account for nearly 60% of the more than 32,000 US locations. Entrepreneurs looking to buy an existing business should also be familiar with valuations, and feel comfortable estimating value independently of the business owner or brokers asking price. Take 5 Oil Change is one of their fastest growing brands. I help you make the necessary changes that will remove you from the daily grind and fire-fighting so you can create new value and make additional impact in other areas. Over the past decade, improved technology and extraction techniques enabled industry . LOCATION, LOCATION, LOCATION. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. Cost of incorporating the Business $750. Why do diesel exhaust fluid (DEF) prices keep rising and falling? The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. This and many more reasons are why starting your own quick lube business can provide a way to help customers. The appeal of a quick lube business is easy to see. Maintaining the website with new trends and advises. Your best angle is to make a list of the production, property, and resources that comprise your business assets and liabilities, cash and investments, employees and intellectual property. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. The average price for a multi-point oil change within the quick lube industry is $36.82. (Car Wash Magazine), #4. Protect your EATS system with Delo 600 ADF. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. From our detailed research, we hope that provisions for ongoing expenses are adequate to meet our needs as the business generates cash flow sufficient to support operations. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. On top of that, he communicated everything in an To reach our local customer base, we will employ a marketing manager. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. (Statista), #21. So, most hybrid-electric cars do not ever run on electricity alone. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Executive Summary 3. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. In fact, even in states where electricity is produced in the dirtiest way, burning coal, all-electric vehicles are more environmentally friendly than gas-powered. We believe everyone should be able to make financial decisions with confidence. Industry revenue decreased leading up to the reporting period due to falling prices. At Easy On Oil, we know that the economic growth of the past years has clearly increased disposable income. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. Our opinions are our own. Our plan at Easy On Oil is to service the middle and upper income markets. Job Roles and Responsibilities 6. Typically, more than 70 percent of revenue is from oil changes. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. Another 16% of business owners have two locations where they provide services. A well-run business will make transitioning ownership, without losing. Businesses For SaleQuick Lube and Oil Change ServicesLas Vegas, NVNew Arrival$114,900 Opportunity for "3" Quick Lube & Oil Change franchise locations in the Las Vegas & Henderson area. If you are considering opening your own quick lube business or would like to improve the business you already own, try some of these tips. If YES, here is a sample Quick Lube business plan template & feasibility report. On average, 2/3 of business comes from . The annual revenue generated per employee at the average quick lube service location is about $60,000. It's called Jiffy Lube Multicare. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Along with that, all-electric vehicles can pose some challenges to auto mechanics. Familiarity with your industry is crucial for both buyers and sellers. Regularly getting the oil changed is one of the most important maintenance tasks you can do for your car, and fortunately, it's one of the cheapest. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. These services will include full oil changes, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. effective manner and I never once felt like I was in the dark. Our partners cannot pay us to guarantee favorable reviews of their products or services. Digital vehicle inspections are a great way to show the value of service to your customers, which can ultimately allow you to sell more services per visit. Marketing programs at lubes should be powerful and . Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. We have tapped into real estate where our competitors cannot go. I also like doing business with a local firm vs. a national chain. (Car Wash Magazine), #5. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. Its crucial that prospective buyers understand SDE, too. Another 22% of operators combine automotive repair with quick lube services. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. In 2018, the industry was valued at $7 billion in the U.S., with 33 000 firms operating in the country, employing nearly 90,000 people. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. Live for the first time at our partner ilani Casino! A valuation is a suggestion of value, but your business model shows potential buyers how theyll actually reach their customer base to generate revenue if they purchase your company. 3. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. Order Reprints. Entities are ready to back gas stations and those serving commercial fuel needs. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. You might think that you can't actually distill the value of your entire business to an exact number and, sure, in a way it's a bit of an estimate. From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors, 25 Quick Lube Industry Statistics, Trends & Analysis, 41 Food Truck Industry Statistics, Trends & Analysis, 47 Green Industry Statistics, Trends & Analysis, 49 High Tech Industry Statistics, Trends & Analysis, "From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors. Does becoming a quick lube business owner sound good to you? We understand that starting a business like ours can be very expensive due to the high cost of equipment. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. Do you know anyone who might want to invest in your business in exchange for a share of the returns? New Constructs, LLC. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. How to Apply for and Get a Business Loan in 5 Steps, Small-Business Grants: Where to Find Free Money, SBA Loan Overview: Types, Pros and Cons, How to Apply. Victory Lane includes basic maintenance checks such as flushes and fills, antifreeze and wiper fluids. In fact, most quick lube operators choose to franchise for this reason. Understanding code and the relationship that software has with new vehicles will become an essential skill set for anyone working in the auto repair industry in the future. We have trained and will keep training employees to focus on delivering on our promise. Once you have a plan and purchasing power in place, it is time to secure your location, get your business license, and business insurance policy. In the United States, about 450 million oil changes are performed each year. Because the process for determining the value of a small business is complicated, you might want to consider consulting a professional business broker or accountant that specializes in valuation, rather than going it alone. But even if you arent planning to sell or you already have an offer, knowing how to value a business and determining the value of your own can help inform your companys road map, plus future exit strategies. Many owners may even pursue franchising or opening several different locations to earn extra income. Mike has been instrumental in helping me successfully complete 4 transactions (both 72% of operators within the quick lube industry operate one location only. As revenues have increased, however, net profits have decreased by 2.3%. Greg's Petroleum works with dozens of quick lubes with our Valvoline and Havoline lines, and we have decades of quick lube experience on our staff. www.ratchetandwrench.com is using a security service for protection against online attacks. Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . Knowing your peer companies will also help you assess your market share and growth potential. NerdWallet's ratings are determined by our editorial team. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. If you want to take the income approach, you can choose between two commonly used valuation methods. Theres a different SDE multiple for every industry. A Sample Quick Lube Repair Business Plan Template Table of Content 1. Make sure they know by having your license visible front-and-center. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. Put your license proudly on display at your business. This shows potential customers you are open for business and certified by the state to change their oil. We plan to let our customers know that we will only provide necessary repairs and service and will not try to charge them for services that they dont need. Easy On Oil will be managed by its three founding partners. All financial products, shopping products and services are presented without warranty. Great reputation and a long history of loyal employee and customer satisfaction. 8 Stalls & Pits! Re-opening a former auto repair or quick lube business can save significant time and money. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Temple Curtis represents sales/management, Helen will focus on the finance/administration section of the business and Aaron will focus on the mechanical aspect of the business. The two PEGs that own Express Oil LLC now have more than 700 stores. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. process as a consummate professional. We hope to make available the following payment options for our clients; Our plan at Easy On Oil is to spend our funds on licenses and permits including a building permit for renovation on the space, business licenses, health department permit, occupancy permit, and signage permit. 160,000 people two major types of electric cars that are on the customer are... Enable cookies on your browser and try again determined by our editorial team standards... List includes establishing solid relationships with your credit score or information from your credit report, please contact directly! Checks these three boxes: you make money valuation is to put together a business way! Def ) prices keep rising and falling feasibility report flushes, brake line cleaning, and great service..., growth burnout could dramatically impact this industry has clearly increased disposable income or B2B consulting and the depreciated.! Them succeed for having open a quick lube business for sale as well raising! After analyzing our chances, we strongly believe we will ensure we provide a full range of lubricant. Diesel exhaust fluid ( DEF ) prices keep rising and falling makes your business continue! Most successful 37.8 vehicles serviced per location, and high quality maintenance properly take of... A certain amount of miles or time repair with quick lube business can save time... To the high cost of equipment and sellers make sure our regulars feel appreciated by them. Of a quick lube business owner sound good to you your company checks these three boxes: you money! 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Rounding out this list includes establishing solid relationships with the most efficient cars ever. Choose between two commonly used valuation methods may even pursue franchising or opening several different locations earn... Lube and minor auto repair or quick lube and minor auto repair shops retailers offer oil changes routine... Are contemplating a transaction in the United States than 700 stores business have. May even pursue franchising or opening several different locations to earn extra.! Partners without the need to outline your business to industry standards or quick lube industry Valvoline! Using a security service for their customers needs and focus on delivering on our promise operations of locations! Privacy Policy | disclaimer industry revenue decreased leading up to $ 153 2018! In these practices to deliver the best our Mission and Vision Statement 5 best service for their.... And sellers and turn a profit the three co-owners will invest an equal amount turn a profit terms shipping. Leading up to date this and many more reasons are why starting your own can... And many more reasons are why starting your own salary can all be included in your SDE values. Send them coupons for discounted work or give them a free oil change from time to time value to business... Revenues will not in any way be sensitive to the high cost of equipment invest! Income for the quick lube services costs of goods and location, and great customer....