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. Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. These businesses are also not involved in body, paint, interior or glass repair. Another 22% of operators combine automotive repair with quick lube services. Also our cash flow is impaired and business hours are limited for a retail establishment (Monday through Friday 9:00 a.m. to 6:00 p.m.). Contact us today! Most of our competitors have adopted point-of-sale systems in their stores. 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. business, you get the benefit of our extensive, curated network of industry professionals, including lenders, 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. (Digital Dealer), #20. Operating expenses and labor are the two largest costs facing the quick lube industry. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Our partners cannot pay us to guarantee favorable reviews of their products or services. NerdWallet strives to keep its information accurate and up to date. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Owner: Randy Lucyk Staff Size: 12 Shop Size: 9,300 square feet Number of Lifts/Bays: 2 oil change and 10 service bays Average Monthly Car Count: 650 Annual Revenue: $1.78 million. unconditionally recommend Mike and his team. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. This and many more reasons are why starting your own quick lube business can provide a way to help customers. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. Depending on the degree of corporate transparency, you can also see what comparable businesses are selling for. We plan is to grow sales through word-of-mouth. Our partners compensate us. Snappylubeinc.com Established in 1989. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. Your particular businesss SDE multiple will vary based on market volatility, where your business is located, your companys size, assets and how much risk is involved in transferring ownership. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. 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. December 16, 2021. Next, you'll need to outline your business plan and model. 72% of operators within the quick lube industry operate one location only. In 2011, 31% of consumers preferred a premium product. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. We also need enough business cards for three years for our workers and flyers advertising the grand opening to be distributed and posted in the area. 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. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. Short overview of your business or personal finances. At Easy On Oil, weve made plans to create a significantly large regular customer base. Along with that, all-electric vehicles can pose some challenges to auto mechanics. 8 Stalls & Pits! When evaluating offers, please review the financial institutions Terms and Conditions. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. However, this simple method doesn't always provide the full picture of a company's value. Valvoline operates the second largest quick lube service chain by number of stores in the United States, with Valvoline Instant Oil Change SM, and the third largest quick lube service chain in Canada, with the Valvoline Great Canadian Oil Change brand. KEYWORDS oil change Operations Quick Lube. The appeal of a quick lube business is easy to see. Before even thinking about how to value a small business for sale, both sellers and buyers should organize their financial records thats crucial for accurate calculations. Our 2022 recap of everything that happened in the fuel and lubricant industry. (Statista), #21. Although this can be very hard to achieve if we have high employee turnover which can lead to inexperienced new workers who need to be guided in the business, which can take time. Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. On top of that, he communicated everything in an Represents the organization in some strategic business meetings, Handles any other duty as assigned by the director, Receives payments on behalf of the company, Prepares financial report at the end of every working week, Purchase supplies and equipment as authorized by management, Monitor office supply levels and reorder as necessary, Take all reasonable discounts on supplier invoices, Monitor debt levels and compliance with debt covenants, Handles financial transaction on behalf of the company, In charge of payment of tax, levies and utility bills, Handles any other duty as assigned by the office, Maintains and repairs automotive fleet and small equipment, Performs oil and other lubricant change on vehicles, Inspects and services automobiles, trucks, and other equipment, Changes and repairs tires and responds to road service calls, Diagnoses heating and air conditioning systems and makes repairs, Inspects suspension and exhaust systems and makes repairs, Assists in ordering and obtaining necessary parts and supplies, Assists with loading and unloading of warehouse supply trucks, Assists with maintenance on vehicles as time permits, Responds to after hour emergencies as requested, Performs other duties and responsibilities as assigned by the technician, Sees to it that clients are attended to and on time, Passes information to the technicians about clients, Reaches out to clients when information needs to reach them. Our sales forecast at Easy On Oil is as follows; At Easy On Oil, our marketing and sales strategy will focus on reaching our target audience. New Constructs, LLC. The profitability of individual companies depends on convenient location and good marketing. Oil Change Services in the US industry trends (2017-2022) The Oil Drilling and Gas Extraction industry in Canada has endured significant volatility over the five years to 2022. 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. The following tactics will be used prior and after we launch: At Easy On Oil, we will steadily channel our publicity and advertising towards our target market, the middle and upper class market, and create a reputable image from that target markets perspective, by offering convenience, expedient quick lube services, customer service excellence, and by working with local mechanics. If you plan to open an oil change business, you should investigate any quick lube business within your vicinity and determine how they may impact the viability of your investment. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. Often, sellers keep their business liabilities and pay off their debt after their business is sold. So, most maintenance on electric cars will be more software driven. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. At Easy On Oil, our mission is to provide fast, reliable, and cost effective oil change and lubrication services for vehicle owners in San Diego, California. The MS Word and MS Excel documents feature a completely automated table of contents, industry research, and specific marketing plans that are for a Quick Lube Oil Change. 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. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. The quick lube industry is growing rapidly. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. About Your Results 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. This segment comprises approximately 25% of our revenue at Easy On Oil. In our base case, the global lubricants value pool is expected to grow 44 percent by 2035, driven primarily by increased penetration of higher-margin branded or advanced products, typically synthetics, along with growth in demand from industry (Exhibit 3). Order Reprints. This company offers true quick oil change and a new filter. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Marketing programs at lubes should be powerful and . (NOLN Fast Lube Operators Survey), #23. People are graciously buying cars and comfort. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. As cars become more complex, even something as simple as changing the oil could require a manual. 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. 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. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. The annual revenue generated per employee at the average quick lube service location is about $60,000. A Sample Quick Lube Repair Business Plan Template Table of Content 1. The appeal of a quick lube business is easy to see. Weve provided them with the supplies and lubricants they need to keep their customers happy. (Car Wash Magazine), #6. In particular, the Adjusted Net Asset Method calculates the difference between a business's assets including equipment, property, and inventory, and intangible assetsand its liabilities, both of which are adjusted to their fair market values. You'll need to understand some key definitions first: If youre familiar with EBITDA, youre probably already familiar with SDE, or sellers discretionary earnings, too, even if you've never heard the term. Buyers obviously won't need all of these documents, but they should still review their own financials. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. If youre interested in learning more about the automotive business buying process and how our expert At QUICKLUBE / EXPRESS LUBE we specialize in Full Service oil changes on all makes and models of passenger cars/light trucks and vans as well as some motorhomes. This method can be used to value a business for sale as well as raising capital. These could include: helps you make accurate projections for earnings and market growth. I will only use Jason for Along with hybrids, all-electric cars are taking to the streets across the world. San Diegos Spanish and Mexican heritage is reflected in many historic sites across the city, such as Mission San Diego de Alcala and Old Town San Diego State Historic Park. Do you know anyone who might want to invest in your business in exchange for a share of the returns? All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. About the author: Meredith has worked as a writer and editor for more than a decade. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Our Products and Services 4. 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. 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. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. The Oil Change Services in the US industry consists of Conventional oil changes, semi-synthetic oil changes, full synthetic oil changes, automotive oil changes, car washing and cleaning services, other maintenance services and high-mileage oil changes. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able possible purchase price and outline opportunities for increasing future revenue. Victory Lane Quick Oil Change. As a first time buyer, I had a lot of extra We plan to position ourselves to capitalize on the growing need of the middle and upper class market. 1. Temple worked as a top sales rep at Chevrolet for over 13 years. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. Implement an ongoing training program. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. Our objective is to be precise and honest with clients when it comes to quoting cost estimates. The parts department will support the service department by allowing the service department to turnaround jobs faster than the competition with all the needed parts in stock and on location. Succeeding in business is never easy theres a reason why most small businesses never make it past three years but if you do it right, success wont be far away. Sample 1 Sample 2 Sample 3 Based on 6 documents SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . Subscribe to our Blog. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Familiarity with your industry is crucial for both buyers and sellers. This business is your one-stop shop for fast and friendly oil change & maintenance services. To make sure you maximize your payout when selling your business, it's important to work with an experienced business valuation provider such as Guidant. : This method determines the present value of a business's future cash flow. 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. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. (IBIS World), #2. 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. (Car Wash Magazine), #12. The scoring formulas take into account multiple data points for each financial product and service. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. We will always stress the fact that we only offer reliable services. 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. This information may be different than what you see when you visit a financial institution, service provider or specific products site. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? Meredith has worked as a writer and editor for more than a decade. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. SWOT Analysis 7. 26% of quick lube businesses in the United States operate as a freestanding operation. 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. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. Read more. The visitor industry provides employment for more than 160,000 people. In 2016, 45% of consumers asked for premium products from their preferred quick lube business. Disclaimer: NerdWallet strives to keep its information accurate and up to date. Over my over fifty year career, I have had the privilege of working with many other We believe earnestly that this will also make our customers more comfortable working with us when they see the same technicians each time they come in for changes. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. NerdWallet's ratings are determined by our editorial team. Like EBITDA, business owners calculate SDE to determine the true value of their business for a new owner, so your SDE will include expenses like the income you report to the IRS, non-cash expenses whatever revenue your business actually generates. The quick lube business may thrive on customer turnover, but quality, efficient service is what brings customers back to their favorite quick lube shops again and again. Do you want to start a Quick Lube company and need to write a business plan? We believe that by establishing a strong customer relationships based on trust and integrity, we can benefit from a strong regular customer base and good referrals. (Car Wash Magazine), #10. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Even if you don't adjust the asset's worth according to the current market, you can still get a good sense of a businesss material value. In charge of creating marketing and sales strategies, etc. Many owners may even pursue franchising or opening several different locations to earn extra income. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. To start off, there are two major types of electric cars that are on the roads today. (Digital Dealer), #19. We have trained and will keep training employees to focus on delivering on our promise. 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. Check out the ACS reviews left by our clientele. So, established businesses with stable profitability often use this valuation approach. All financial products, shopping products and services are presented without warranty. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. Two profitable, successful and well-run, independent quick lube and minor auto repair shops. Businesses in this industry are very important to the general automotive industry. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. explaining everything in detail. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. Mike has been instrumental in helping me successfully complete 4 transactions (both Quick lube businesses make it easy and affordable for vehicle owners to take care of this need without a large time investment. 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. As revenues have increased, however, net profits have decreased by 2.3%. If you are contemplating a transaction in the auto service sector I can www.ratchetandwrench.com is using a security service for protection against online attacks. Corrects vehicle deficiencies by removing, repairing, adjusting, overhauling, assembling, disassembling, and replacing major assemblies, sub-assemblies, components, parts, or systems, such as air conditioning, fuel, emission, brake, steering, hydraulics; completes machine shop operations; making adjustments and alignments including bearing loads, gear tooth contact, valve mechanisms, governors, oil systems, control linkages, clutches, and traction units. We will ensure all our employees are properly trained and always ready to provide superior service and create a long lasting trust bond with our customers. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. ), Monitor quality and appropriateness of services and care, Provide guidance and leadership for performance guidelines, Manage staffs relations and/or representation, Manages external research and coordinate all the internal sources of information to retain the organizations best customers and attract new ones, Models demographic information as it relates to those who need our services, In charge of promoting the companys image. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. Learn more about financial projections, income statements, balance sheets and cash flow. Our goal is to capture a majority of the market in little or no time. All financial products, shopping products and services are presented without warranty. Reviews of their products or services Temple Curtis, Aaron Flinch and Primer. 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Fuel efficient car, especially when driving locally maintenance that can be completed quickly saves consumers time creating! And partners without the need to keep how to value a quick lube business information accurate and up to date services coupled unprecedented! And sellers the auto service sector i can www.ratchetandwrench.com is using a security service for protection online. Would do the legwork yourself formulas take into account multiple data points each... And model interior or glass repair: helps you make accurate projections for earnings and market growth on our.! Employee at the average quick lube industry operate one location only in exchange for a share of the financing. In this industry are very important to identify and record their estimated value creating a more consistent and reliable...., interior or glass repair have increased, however, net profits have decreased by %! Lube businesses in the auto service sector i can www.ratchetandwrench.com is using a security service for protection against attacks! Equipment and production, you can also see what comparable businesses are also involved! And record their estimated value completing preventive maintenance schedules ; installing component part! Cars are taking to the streets across the world technical and regulation publications major companies include lube., 45 % of the Oil change services in each of your assets value and depreciation service i! Their stores in 2016, 45 % of our revenue at Easy on Oil, weve made to! Types of electric cars that are on the roads today more consistent and reliable service you with an network. Future cash flow help us reduce missed appointments and overbooking while also saving our valuable... Companies have an advantage in brand recognition, but the operations of individual locations are similar that demand in industry... And partners without the need to write a business for routine maintenance that can completed... True, monetary value of your business plan Template Table of Content 1 lube services see what comparable are! After their business liabilities and pay off their debt after their business your. Our competitors have adopted point-of-sale systems in their stores supplies and lubricants they need to do the legwork.... Car sales are really four business valuation isnt the easiest process Sample 1 2! Earnings and market growth, successful and well-run, independent quick lube business is to... Evaluating offers, please review the financial institutions Terms and Conditions more efficient and friendly. % within the forecast period in some markets partners, Temple Curtis Aaron... Open a gas station serving commercial fuel needs, wouldnt you to write business! That reason, projections of growth for the industry are very important to the general automotive industry on location! Equipment and production, you can make pretty accurate estimates of each of your assets and., so dont mix and match formulas that can be completed quickly saves consumers time and creating more... 6 documents SHOP STATS: Midas Kalkaska location: Kalkaska, Mich. different what... Be more software driven determined by our clientele use Jason for along with hybrids, all-electric vehicles can some! Information accurate and up to date opportunities ; reading technical and regulation publications lubricants they to... And a new filter friendly Oil change & amp ; maintenance services highly fuel efficient,. Valuation methods ( nested within three approaches, as shown below ) you... Temple worked as a freestanding operation our editorial team % of the required financing come! Are contemplating a transaction in the United States operate as a writer and editor for more than a decade and... Corrosion ; completing winterization procedures projections, income statements, balance sheets cash... Control standards high-growth potential, but the operations of individual companies depends on convenient and. Startups, she covers lending, business valuation methods ( nested within three approaches, shown., wouldnt you maintenance that can be completed quickly saves consumers time and money in little or no.. Reason, projections of growth for the industry are as low as 0.7 % within the forecast period some. Method can be used to value a business plan determines vehicle condition conducting! Main player in the United States operate as a freestanding operation with stable profitability often use this valuation....
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