process as a consummate professional. Jason was a huge help with my transaction! 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. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. 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. This information may be different than what you see when you visit a financial institution, service provider or specific products site. What often separates one lube shop from another is its creative marketing strategies. Most locations achieve this figure with just 2-5 service bays available to them. Knowing your peer companies will also help you assess your market share and growth potential. 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. 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. Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. Out of the 450 million oil changes which occur in the United States each year, about 100 million are performed at a quick lube location. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. LOCATION, LOCATION, LOCATION. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. Our partners cannot pay us to guarantee favorable reviews of their products or services. 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. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. The two PEGs that own Express Oil LLC now have more than 700 stores. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. 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. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. 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. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. 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. For customers, its a convenient and easy way to get routine maintenance done quickly. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. Cost of incorporating the Business $750. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. 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. The higher your SDE multiple, as you might expect, the more your business is worth. Examples include: Intangible assets: These are all the non-material assets that add value to your business. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. The work done here is every bit as good or better than the nationals, the price seems at least a bit better, and I had a better experience overall. Home Business Plans Automotive Sector. Competition discounting is a major issue within the quick lube industry at the local level. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. unconditionally recommend Mike and his team. When it comes to all-electric cars, consumers either have an inexpensive car with very low range or a very expensive car with comparable range to an ICE car. person. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. ), 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. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Meredith has worked as a writer and editor for more than a decade. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. 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. OK92033) Property & Casualty Licenses, NerdWallet | 55 Hawthorne St. - 11th Floor, San Francisco, CA 94105, How to Value a Small Business If Youre Looking to Sell or Buy. The incredible breadth of skill sets and knowledge that the management team possesses will allow us to reach our expected goals. The largest technological advancement in the automotive industry is the introduction of electric vehicles. The average price for a multi-point oil change within the quick lube industry is $36.82. Franchise Quick Lube, Car Wash, and RE in New Mexico! Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. (Business Wire), #14. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Looking to make a smart automotive business investment? If youre considering acquiring a business, composing a list of your target's assets and liabilities will ground your decision in sound financial judgment and make sure you and the seller are on the same page with valuation. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. 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. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. 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. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. We will always stress the fact that we only offer reliable services. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. NerdWallet's ratings are determined by our editorial team. Disclaimer: NerdWallet strives to keep its information accurate and up to date. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. It can gather data to . Do you know anyone who might want to invest in your business in exchange for a share of the returns? Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. 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. This shows potential customers you are open for business and certified by the state to change their oil. (Digital Dealer), #17. Our Products and Services 4. 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. Another 22% of operators combine automotive repair with quick lube services. Easy On Oil will be managed by its three founding partners. Wherever you are in your businesss lifecycle, its important to know how to value a small business. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Contact us today! Also our product prices will be gotten after the appropriate retail is determined to make sure that the shelf price represents a value to the consumer and the retailer has a 50% margin. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Familiarity with your industry is crucial for both buyers and sellers. Does becoming a quick lube business owner sound good to you? So, most maintenance on electric cars will be more software driven. 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. Here is a list of our partners and here's how we make money. As 2018 kicked off, Jiffy Lube launched a new brand extension. 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. 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. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. (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.). (IMR Automotive Research), #9. So, established businesses with stable profitability often use this valuation approach. We plan to give our clients a few business cards to hand out to friends when they talk about our quick lube services or buying new parts. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. 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. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. Groups exist on the state and federal level to help with seed money. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Our 2022 recap of everything that happened in the fuel and lubricant industry. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Here's a quick example: If the present value of your current business earnings/excess compensation amounts to $500,000 and you select a discount for lack of marketability of 10%, $50,000 (10% x $500,000) will be subtracted, resulting in an estimated business value of $450,000. He will be charged with overseeing the sales and marketing of Easy On Oil. These could include: helps you make accurate projections for earnings and market growth. The annual revenue generated per employee at the average quick lube service location is about $60,000. (Valvoline). Many owners may even pursue franchising or opening several different locations to earn extra income. Approaches to a successful small-business evaluation. The average vehicle owner will change their oil about every 5,000 miles. How will you separate yourself from the competition in a crowded market? 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. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Live for the first time at our partner ilani Casino! 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. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! (Digital Dealer), #20. It must also be done for a quick lube business. In total, Driven Brands has 1,100-plus locations across North America. We have tapped into real estate where our competitors cannot go. People are graciously buying cars and comfort. This allows households to save a little money on the aftermarket needs of their vehicle. Our Business location provides us with a vast market and many opportunities. 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. Owners who pay attention to their customers needs and focus on the customer experience are often the most successful. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. Protect your EATS system with Delo 600 ADF. 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. This information may be different than what you see when you visit a financial institution, service provider or specific products site. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. So, established businesses with stable profitability often use this valuation approach. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. On average, 2/3 of business comes from . assign a green, yellow, or red status to each part. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Small, regional locations can allow owners to carve out successful markets for their business. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. On the sell side, a deep understanding of your industrys trends can help you reach an informed valuation that reflects your business assets as well as the current market. Typically, more than 70 percent of revenue is from oil changes. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. SHOP STATS . Regardless of the option you pursue, get the word out with our help. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. 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. It's called Jiffy Lube Multicare. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free. brokers, but I have to say that I have not worked with a more professional and diligent 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. 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. (IHS Automotive), #22. : This method determines the present value of a business's future cash flow. Application and Obtaining Tax Payers ID: Application for business license and permit: Leasing, renovating and equipping our facility: Generating part of the startup capital from the founder: Printing of Packaging and Promotional Materials: Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: Creating Official Website for the Company: Creating Awareness for the business (Business PR): Health and Safety and Fire Safety Arrangement: Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry. About Your Results Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. 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. However, youre fully capable of valuing your business using your own resources. Just 9% of customers come from a 2-mile radius. Our Mission and Vision Statement 5. (Car Wash Magazine), #10. This does come at a cost though. Performing services on brake systems to coolant flushes. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. Most of our competitors have adopted point-of-sale systems in their stores. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. 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. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. We will give a guarantee on all our repairs for a certain amount of miles or time. 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. Oil changing services in the United States is an industry valued at $7 billion in the United States. Our goal is to capture a majority of the market in little or no time. Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . The appeal of a quick lube business is easy to see. 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. Cost for basic insurance policy covers, permits and business license $100,000, The cost of acquiring a suitable Office facility 6 months (Re Construction of the facility inclusive) $120,000, The budget for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) $10,000, The price of purchasing of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) $12, 000, The Cost of Launching our official Website $4,000, Our budget for paying at least five employees for 6 months plus utility bills $70,000, Additional Expenditure (Business cards, Signage, repair equipment, Adverts and Promotions et al) $234,000. In 2011, 31% of consumers preferred a premium product. One Independent Quick Lube w/RE in East-Central South Dakota! Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. Here is a list of our partners. 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). We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. Liabilities include any debt or outstanding credit on your businesss books, and they detract from the overall value of a business. The average price for a multi-point oil change within the quick lube industry is $36.82. His expertise in getting deals done is 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. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. One common method used to value small businesses is based on seller's discretionary earnings (SDE). Next, you'll need to outline your business plan and model. ", 100 Best Side Hustles for Teens to Make Money, 10 Proven Psychological Pricing Strategies with Examples, 100 Office Etiquette Rules You Need to Know, 50 Best Business Letter Closings of All-Time. Sources: New Constructs, LLC and company filings. (IBIS World), #3. This influences which products we write about and where and how the product appears on a page. First, though, you have to get your financial information in order. If YES, here is a sample Quick Lube business plan template & feasibility report. The service requires full cookie support in order to view this website. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. 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. In any of those cases, buyers will be interested in the individual value of your investments or equipment. Car owners instead prefer to pay someone else to do it for them. 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. This offers incredible value to customers who need their cars fixed right away. Mike has been instrumental in helping me successfully complete 4 transactions (both Our objective is to be precise and honest with clients when it comes to quoting cost estimates. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. 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. To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. As a first time buyer, I had a lot of extra We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. Franchising a quick lube destination in the neighborhood potential customers you are in businesss... Additional financing, the electric systems are used to even out the power needs in the business TransUnion. 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