Protect your EATS system with Delo 600 ADF. And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. At Easy On Oil, weve made plans to create a significantly large regular customer base. Home Business Plans Automotive Sector. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. 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. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. Does becoming a quick lube business owner sound good to you? (Business Wire), #16. The profitability of individual companies depends on convenient location and good marketing. The quick lube industry is growing rapidly. 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 also plan to leverage an automotive service scheduling software program. 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. 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. 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. Report has it that most individuals in this market segment are willing to pay an extra premium within the pricing of quick lube services to avoid the common inconveniences of having a vehicle tied up in a repair shop. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. (Car Wash Magazine), #11. The most popular brand-name for freestanding businesses is Jiffy Lube. Protect your EATS system with Delo 600 ADF. The higher your SDE multiple, as you might expect, the more your business is worth. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. Businesses in this industry are very important to the general automotive industry. 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. Industry Overview 2. (Business Wire), #15. "Jiffy Lube Multicare is not a rebrand; it is more of an extension," said Steve Ledbetter . Subscribe to our Blog. This and many more reasons are why starting your own quick lube business can provide a way to help customers. We plan is to grow sales through word-of-mouth. 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. It can be an especially useful approach for rapidly growing businesses and industries. The service requires full JavaScript support in order to view this website. People will continue to drive regardless of the general economic market. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. www.ratchetandwrench.com is using a security service for protection against online attacks. These businesses are also not involved in body, paint, interior or glass repair. Also, electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. In 2011, 31% of consumers preferred a premium product. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. In fact, with our location distribution we cover the market. There are about 250 million vehicles on the road which will require services at some point that can be provided by a quick lube location. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Quick Lube has significant advantages over the 3 rd party retail model, including: Direct Customer Relationship: As noted above, Quick Lube lets Valvoline own the relationship with its consumers. Our 2022 recap of everything that happened in the fuel and lubricant industry. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. Most locations achieve this figure with just 2-5 service bays available to them. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Why do diesel exhaust fluid (DEF) prices keep rising and falling? Meredith has worked as a writer and editor for more than a decade. Among these, only a few are major national chains. Going with a credit union or other financing structure might work if you cannot find a commercial lender. Here is a list of our partners. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. The appeal of a quick lube business is easy to see. Routine maintenance services like adjusting tire pressure, changing windshield wipers, replacing light bulbs, and topping off auto fluid levels are usually done in 10 minutes or less. Over my over fifty year career, I have had the privilege of working with many other 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. However, youre fully capable of valuing your business using your own resources. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Examples include: These are all the non-material assets that add value to your business. Do you want to start a Quick Lube company and need to write a business plan? We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. Theres a different SDE multiple for every industry. 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 average age of a vehicle owned in the United States is 11.4 years. 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. In comparison, leasing costs are just 9% of the overall expenses for the average 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. However, this does not influence our evaluations. Discounted cash flow method: This method determines the present value of a business's future cash flow. Approaches to a successful small-business evaluation. If you want to take the income approach, you can choose between two commonly used valuation methods. 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. If so, read on about what it takes to become one. This process is automatic. Another 16% of business owners have two locations where they provide services. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. In the United States, about 450 million oil changes are performed each year. In fact, most quick lube operators choose to franchise for this reason. Short overview of your business or personal finances. Keys to determine the value of a small business, Start with your pretax, pre-interest earnings. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. One Independent Quick Lube w/RE in East-Central South Dakota! Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. (IMR Automotive Research), #9. How will you separate yourself from the competition in a crowded market? 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. 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. effective manner and I never once felt like I was in the dark. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Pre-qualified offers are not binding. 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. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. business, you get the benefit of our extensive, curated network of industry professionals, including lenders, 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. 3. Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. vendors, insurance agents, and others. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. 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. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. The health of the quick lube industry is tied to the health of the general economy. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and 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. (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.). This allows households to save a little money on the aftermarket needs of their vehicle. 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 At some point, every vehicle requires ongoing maintenance to keep it functioning properly. This system establishes a service history for each vehicle, provides customers with a comprehensive sales document, and enables the service centre to maintain a service custom. Disclaimer: NerdWallet strives to keep its information accurate and up to date. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. 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. 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. Typically, more than 70 percent of revenue is from oil changes. Quick Lube operating income is up to $162 million TTM . Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. possible purchase price and outline opportunities for increasing future revenue. Car owners instead prefer to pay someone else to do it for them. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. 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. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. You'll need a minimum of $50,000 cash as a startup fee. brokers, but I have to say that I have not worked with a more professional and diligent Through 2028, the quick lube industry is expected to see lower levels of growth than in the past 5 yeas. We plan to offer our clients personalized service by offering convenience and rapid service. Another 22% of operators combine automotive repair with quick lube services. These 10 chains account for nearly 60% of the more than 32,000 US locations. Our partners compensate us. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. 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. buying and selling) over the last 15 years. So, established businesses with stable profitability often use this valuation approach. Easy On Oil will serve the San Diego, California market with four convenient locations and will grow into a business with excellent sales within 3 years. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. I also like doing business with a local firm vs. a national chain. 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. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. Examples include: Intangible assets: These are all the non-material assets that add value to your business. process as a consummate professional. About the author: Meredith has worked as a writer and editor for more than a decade. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. Another common method attributes value to a business based solely on its assets. 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. 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. add technician notes to the photos. text the finished report to the customer's mobile device. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Executive Summary 3. Its crucial that prospective buyers understand SDE, too. To start off, there are two major types of electric cars that are on the roads today. (IHS Automotive), #22. unconditionally recommend Mike and his team. Your market's volume is expanding, and you have the opportunity for growth. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. 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. So, most hybrid-electric cars do not ever run on electricity alone. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. His expertise in getting deals done is 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. As a first time buyer, I had a lot of extra Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. questions and concerns and Jason was fantastic in answering my questions as well as Please enable JavaScript on your browser and try again. 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