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. 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. Sources: New Constructs, LLC and company filings. Meredith has worked as a writer and editor for more than a decade. 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. business, you get the benefit of our extensive, curated network of industry professionals, including lenders, Small, regional locations can allow owners to carve out successful markets for their business. (Car Wash Magazine), #11. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. 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. Implement an ongoing training program. 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. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. We have trained and will keep training employees to focus on delivering on our promise. This process is automatic. add technician notes to the photos. assign a green, yellow, or red status to each part. (Business Wire), #15. comprehensive listing of auto repairs for sale near you, give us a call at 1-800-874-5793 for details. Then, you can demonstrate to potential buyers what makes your business stand out. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. It is part of the San DiegoTijuana conurbation, the second-largest trans-border agglomeration between the U.S. and a bordering country after DetroitWindsor, with a population of 4,922,723 people. Please enable JavaScript on your browser and try again. When evaluating offers, please review the financial institutions Terms and Conditions. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. 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. Make sure they know by having your license visible front-and-center. Put your license proudly on display at your business. 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. Victory Lane includes basic maintenance checks such as flushes and fills, antifreeze and wiper fluids. (Statista), #21. 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. We plan to offer our clients personalized service by offering convenience and rapid service. While it may seem like changing the oil in a passenger car is a relatively straight-forward, simple process, it actually requires a number of intricate steps. In any of those cases, buyers will be interested in the individual value of your investments or equipment. You'll need a minimum of $50,000 cash as a startup fee. 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. Oil changing services in the United States is an industry valued at $7 billion in the United States. If you ever want to learn . 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. Protect your EATS system with Delo 600 ADF. questions and concerns and Jason was fantastic in answering my questions as well as It's likely that any sellers you're working with will want to see your credit report and basic financial profile. A typical location performs about 1,200 jobs per month. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. Jason was a huge help with my transaction! For public companies, annual and quarterly financial reports are typically accessible online. We believe everyone should be able to make financial decisions with confidence. These are some of the most efficient cars to ever be driven. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Most of our competitors have adopted point-of-sale systems in their stores. 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. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. We all know this chore requires ones hands to get dirty, and for this reason alone, many car owners are perfectly okay paying a quick lube business to do the job for them. Short overview of your business or personal finances. Keep up to date on our new listings and business opportunities. I also like doing business with a local firm vs. a national chain. (Digital Dealer), #20. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. 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. (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.). Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. Later, too, you can use this list to create an overview of your companys value for potential buyers. (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.). However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. vendors, insurance agents, and others. They are responsible for the direct employment of almost 90,000 people. In 2011, 31% of consumers preferred a premium product. So, most hybrid-electric cars do not ever run on electricity alone. New Constructs, LLC. (Valvoline), #24. Consumers are shifting toward premium products within the quick lube industry. 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. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. We are the original home the "Oil change in a Snap!" and now have added automotive repair to line up. The two PEGs that own Express Oil LLC now have more than 700 stores. Along with hybrids, all-electric cars are taking to the streets across the world. Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. 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). (Digital Dealer), #19. Great reputation and a long history of loyal employee and customer satisfaction. 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. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. 1. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. 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. With Easy On Oil as a technologically savvy business with computerized monitoring of all automotive lubricant and repair parts inventory, we plan to make sure that parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. 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. In 2016, 45% of consumers asked for premium products from their preferred quick lube business. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Check out the ACS reviews left by our clientele. 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. What often separates one lube shop from another is its creative marketing strategies. How much is an oil change? 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. Cost of incorporating the Business $750. Our Products and Services 4. Temple worked as a top sales rep at Chevrolet for over 13 years. Maintaining the website with new trends and advises. Liabilities include any debt or outstanding credit on your businesss books, and they detract from the overall value of a business. Another 16% of business owners have two locations where they provide services. I will only use Jason for 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. Profit and loss statements for the last three years. (Car Wash Magazine), #6. Disclaimer: NerdWallet strives to keep its information accurate and up to date. The average price for a multi-point oil change within the quick lube industry is $36.82. Overall, a strong business plan provides buyers with important context about your company like your location and mission and captures what key services or goods you offer. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? 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. Whether you plan on bankrolling your business yourself or finding backing from a lender, no business plan can see the light of day without some cold, hard cash backing it up. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. These could include: helps you make accurate projections for earnings and market growth. Make sure your company checks these three boxes: You make steady profits. 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. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. Depending on the degree of corporate transparency, you can also see what comparable businesses are selling for. Easy On Oil will be managed by its three founding partners. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Often, sellers keep their business liabilities and pay off their debt after their business is sold. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . Contact us today! Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. In fact, most quick lube operators choose to franchise for this reason. Many or all of the products featured here are from our partners who compensate us. More on liabilities in a bit. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. The average price for a multi-point oil change within the quick lube industry is $36.82. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change : 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. Protect your EATS system with Delo 600 ADF. 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. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Conducting a valuation is an excellent opportunity to assess the financial health and potential of your business, or of a business youre hoping to buy. This and many more reasons are why starting your own quick lube business can provide a way to help customers. Many owners may even pursue franchising or opening several different locations to earn extra income. 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. The profitability of individual companies depends on convenient location and good marketing. She is based in New York City. (Car Wash Magazine), #5. Wherever you are in your businesss lifecycle, its important to know how to value a small business. In total, Driven Brands has 1,100-plus locations across North America. Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. Performing services on brake systems to coolant flushes. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. Sally Lauckner is an editor on NerdWallet's small-business team. People are graciously buying cars and comfort. This company offers true quick oil change and a new filter. 26% of quick lube businesses in the United States operate as a freestanding operation. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. Additionally, franchising a business comes with an entirely different set of understandings and obligations. The Top Automotive Oil Change Franchises of 2023. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Most online business valuation calculators use a variation of the income approach. The most popular brand-name for freestanding businesses is Jiffy Lube. You should have already done your location homework, so landing the future home of your quick lube business should not be a problem. 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. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Over my over fifty year career, I have had the privilege of working with many other There are many things that go into running a quick lube business, but there are three key items you should focus on if you want to retain customers. 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. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Marketing programs at lubes should be powerful and . More often, small businesses should use SDE for their business valuations, since small-business owners usually pull a large percentage of their businesss revenue for their salary and living expenses. At Easy On Oil, weve made plans to create a significantly large regular customer base. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. Competition discounting is a major issue within the quick lube industry at the local level. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. 72% of operators within the quick lube industry operate one location only. Our 2022 recap of everything that happened in the fuel and lubricant industry. KEYWORDS oil change Operations Quick Lube. Why do diesel exhaust fluid (DEF) prices keep rising and falling? We have tapped into real estate where our competitors cannot go. Even though quick lube locations are seeing a reduction in the number of cars being serviced each day, the number of oil changes being performed is rising. 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. Note that each of the three co-owners will invest an equal amount. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Our Business location provides us with a vast market and many opportunities. Businesses in this industry change motor oil, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). Sellers will need to follow steps to properly take inventory of your assets. Typically, more than 70 percent of revenue is from oil changes. Direct marketing at a lube allows an operator to specifically direct their promotional energies to the core consumer with the goal of completing a sale. Just 9% of customers come from a 2-mile radius. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? The most successful owners invest in these practices to deliver the best service for their customers. About 70% of the revenues generated by the average quick lube location come from oil changes when multiple services are available for consumers. As you can deduce from its name, the market approach to valuing a business determines a companys value based on the purchases and sales of comparable companies within the same industry. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. Online business valuation calculators use a variation of the people of San Diego be... Success include having quality employees, efficiently managing costs of goods and location and... The world display at your business mostly holds investments or real estate includes two half-acre lots with two facilities... Drop off and pick up their vehicle and may even pursue franchising or opening different. 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