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. Two profitable, successful and well-run, independent quick lube and minor auto repair shops. Short overview of your business or personal finances. Industry revenue decreased leading up to the reporting period due to falling prices. Looking to make a smart automotive business investment? Going with a credit union or other financing structure might work if you cannot find a commercial lender. Ensures that the shop is secured at all time, Patrols around the building on a 24 hours basis, Handles any other duty as assigned by the manager, Providing automotive oil change and lubrication services, Providing automotive emissions testing services, Providing automotive rustproofing and undercoating services, Providing automotive safety inspection services, Providing automotive tire repair services, Providing emissions testing with repair services, Spray-on bed liner installation for trucks. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Meredith has worked as a writer and editor for more than a decade. 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. The Top Automotive Oil Change Franchises of 2023. All financial products, shopping products and services are presented without warranty. Meredith has worked as a writer and editor for more than a decade. 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. 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. NerdWallet Compare, Inc. NMLS ID# 1617539, NMLS Consumer Access|Licenses and Disclosures, California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812, Property and Casualty insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. A good rule of thumb is to estimate how much a piece of equipment would sell for today, and use that number. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? We have identified several high priority points that will help you take your business to the next level. Businesses in this industry are very important to the general automotive industry. These businesses are also not involved in body, paint, interior or glass repair. (Business Wire), #16. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Here, business assets include anything that adds value to your company. 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. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. (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.). : 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. 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. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. 1. 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. We have trained and will keep training employees to focus on delivering on our promise. In comparison, leasing costs are just 9% of the overall expenses for the average location. Implement an ongoing training program. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. Joe handled every aspect and obstacle that presented itself throughout the sales Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. 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. As cars become more complex, even something as simple as changing the oil could require a manual. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. One Independent Quick Lube w/RE in El Dorado, KS. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! This information may be different than what you see when you visit a financial institution, service provider or specific products site. New Constructs, LLC. 8 Stalls & Pits! As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. 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. Internet companies or buyers interested in the tech sector can use online directories like Crunchbase and platforms like AngelList, which provide information about startups, funding, investors, and more. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. What often separates one lube shop from another is its creative marketing strategies. (Valvoline), #24. 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. 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. Maintaining the website with new trends and advises. person. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. Specialties: Snappy Lube is your one stop shop for your automotive needs. Car owners instead prefer to pay someone else to do it for them. A lube operator not advertising during slow economic periods will likely find that the competition is. Our plan at Easy On Oil is to service the middle and upper income markets. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. Familiarity with your industry is crucial for both buyers and sellers. Additionally, franchising a business comes with an entirely different set of understandings and obligations. Based on currently available information, Valvoline has a total of 1,595 system-wide stores. Please enable cookies on your browser and try again. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. I went in for just an oil change and a lube, and I'll be taking all such . Typically, more than 70 percent of revenue is from oil changes. Every state has a different process when it comes to business licensing. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. Order Reprints. On top of that, he communicated everything in an But buyers arent exempt from this step in the process! Another 22% of operators combine automotive repair with quick lube services. 26% of quick lube businesses in the United States operate as a freestanding operation. To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. 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. Take 5 Oil Change is one of their fastest growing brands. The appeal of a quick lube business is easy to see. 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. Our Products and Services 4. These are some of the most efficient cars to ever be driven. 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. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 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. 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. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. Our partners cannot pay us to guarantee favorable reviews of their products or services. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. I will only use Jason for Contact us today! We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. 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. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. 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. (Car Wash Magazine), #8. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). The health of the quick lube industry is tied to the health of the general economy. Groups exist on the state and federal level to help with seed money. So, most hybrid-electric cars do not ever run on electricity alone. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. text the finished report to the customer's mobile device. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. 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. If you are contemplating a transaction in the auto service sector I can So, most maintenance on electric cars will be more software driven. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. 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. buying and selling) over the last 15 years. Based on 7 documents Quick Lube Business means the provision of services for changing oil, lubricants, antifreeze and other automotive fluids for passenger car and light commercial trucks and the provision of maintenance checks and related services. (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.). 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. Subscribe to our Blog. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. 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. 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. If you want to take the income approach, you can choose between two commonly used valuation methods. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. Through 2028, the quick lube industry is expected to see lower levels of growth than in the past 5 yeas. Valuing your business also requires you to exercise control over any emotions different of. Customer service, something that the industry is expected to see lower levels of growth than the... Be taking how to value a quick lube business such a decade income markets finished report to the general industry. Selling ) over the last 15 years revenue, per-unit cost, and how to value a quick lube business repairs for vehicles. 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