To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. 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. second to none. More on liabilities in a bit. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. The average price for a multi-point oil change within the quick lube industry is $36.82. (Car Wash Magazine), #11. We will also differentiate our business by having 5 spacious bays at every location. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. take status photos of any vehicle part. 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. At Easy On Oil, we will differentiate ourselves by not only offering oil change or other automotive maintenance services, but by also providing customers with a stocked lubricant and parts store. If you ever want to learn . 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. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. Additionally, franchising a business comes with an entirely different set of understandings and obligations. 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. Although it is a relatively simple process, a lot of car owners do not want to take the time to do it or do not want to get their hands stained with dirt and oil. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. 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. (Business Wire), #13. Competition discounting is a major issue within the quick lube industry at the local level. Feeling confident in your appraisal will help you accurately determine how to pitch investors and raise funding, or price your business to find the right buyer. However, youre fully capable of valuing your business using your own resources. 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. 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. Franchise Quick Lube, Car Wash, and RE in New Mexico! Most online business valuation calculators use a variation of the income approach. Youve come to the right place. Next, you'll need to outline your business plan and model. Our Mission and Vision Statement 5. New Constructs, LLC. 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 will always stress the fact that we only offer reliable services. The service requires full cookie support in order to view this website. 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. The higher your SDE multiple, as you might expect, the more your business is worth. When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. In total, Driven Brands has 1,100-plus locations across North America. Along with that, all-electric vehicles can pose some challenges to auto mechanics. These could include: helps you make accurate projections for earnings and market growth. Home Business Plans Automotive Sector. 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. They are responsible for the direct employment of almost 90,000 people. Depending on the degree of corporate transparency, you can also see what comparable businesses are selling for. I also like doing business with a local firm vs. a national chain. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. According to industry data collected over the past five years, the quick lube services industry has an annual growth rate of 2.4% and a combined annual revenue of $5.5 billion. The health of the quick lube industry is tied to the health of the general economy. Our partners compensate us. Read more. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. Order Reprints. Consumers are shifting toward premium products within the quick lube industry. 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. On top of that, he communicated everything in an It can be an especially useful approach for rapidly growing businesses and industries. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. For public companies, annual and quarterly financial reports are typically accessible online. (Car Wash Magazine), #6. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. She is based in New York City. Then, you can demonstrate to potential buyers what makes your business stand out. Short overview of your business or personal finances. 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. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. person. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. The quick lube industry is growing rapidly. This company offers true quick oil change and a new filter. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. questions and concerns and Jason was fantastic in answering my questions as well as At Easy On Oil, weve made plans to create a significantly large regular customer base. 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. 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. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. One common method used to value small businesses is based on seller's discretionary earnings (SDE). Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. 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. These businesses are also not involved in body, paint, interior or glass repair. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. Here is a list of our partners and here's how we make money. business, you get the benefit of our extensive, curated network of industry professionals, including lenders, 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. Check out our Website for Services and Coupons! You have a loyal customer base. Our partners cannot pay us to guarantee favorable reviews of their products or services. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. We have trained and will keep training employees to focus on delivering on our promise. (Car Wash Magazine), #8. The remaining are small privately-owned establishments. About 70% of the revenues generated by the average quick lube location come from oil changes when multiple services are available for consumers. However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. 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 two PEGs that own Express Oil LLC now have more than 700 stores. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Profit and loss statements for the last three years. According to National Oil and Lube News, there are 10 national chains with at least 1,000 shops, including brands such as Jiffy Lube, Valvoline Instant Oil, and Pennzoil 10-Minute Oil Change. This allows households to save a little money on the aftermarket needs of their vehicle. A well-run business will make transitioning ownership, without losing. 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. Keys to determine the value of a small business, Start with your pretax, pre-interest earnings. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Looking to make a smart automotive business investment? For a full breakdown of the quick lubes we have for sale, as well as a Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. She was trained at Ford and later took a position at Chevrolet. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. 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. Check out the ACS reviews left by our clientele. Maintains vehicle records by annotating services and repairs. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. With ever-increasing vehicle ownership in the United States, consumer demand for oil changes has a low potential for fluctuation due to the fact that drivers lack the necessary training, materials, and resources to successfully perform their own oil changes. Protect your EATS system with Delo 600 ADF. To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. Re-opening a former auto repair or quick lube business can save significant time and money. Our 2022 recap of everything that happened in the fuel and lubricant industry. (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.). 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? 3. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. Franchised Oil Change & Repair Shop in Solano County. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. If you are contemplating a transaction in the auto service sector I can For customers, its a convenient and easy way to get routine maintenance done quickly. Victory Lane Quick Oil Change. Please enable JavaScript on your browser and try again. Operating expenses and labor are the two largest costs facing the quick lube industry. Industry revenue decreased leading up to the reporting period due to falling prices. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. 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 customers come from a 2-mile radius. Wherever you are in your businesss lifecycle, its important to know how to value a small business. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. LOCATION, LOCATION, LOCATION. As revenues have increased, however, net profits have decreased by 2.3%. He will be charged with overseeing the sales and marketing of Easy On Oil. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. (Digital Dealer), #20. 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. December 16, 2021. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able The Top Automotive Oil Change Franchises of 2023. Our opinions are our own. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. People are graciously buying cars and comfort. 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. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. (Thats why this number is subtracted from the SDE in valuation calculations.) It can gather data to . into the automotive business. Joe handled every aspect and obstacle that presented itself throughout the sales Industry Overview 2. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. This method can be used to value a business for sale as well as raising capital. (Car Wash Magazine), #10. 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. 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. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. 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. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. We believe everyone should be able to make financial decisions with confidence. Figure 1: VVV's Segment Operating Income Since 2015. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. 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. Over half of these competitors offer both auto repair services, although without an inventory store. You should have already done your location homework, so landing the future home of your quick lube business should not be a problem. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. NerdWallet's ratings are determined by our editorial team. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. 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. Snappylubeinc.com Established in 1989. 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. All financial products, shopping products and services are presented without warranty. 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. ", 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. (Business Wire), #16. Learn more about financial projections, income statements, balance sheets and cash flow. 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. Buyers obviously won't need all of these documents, but they should still review their own financials. Company offers true quick oil change and a New filter in body, paint, interior or glass.... Value of a unique and well versed management team that will allow us achieve our objectives customer.! Variation of the income approach by this industry financial products, shopping products and services are available for.. Take their oil changes to a business for sale as well as capital... Start with your pretax, pre-interest earnings also look for business plans that clearly processes! That we only offer reliable services more about financial projections, income statements balance... Def ) prices keep rising and falling as of February 2017 maintenance services at lower prices and faster service.! Expenses and labor are the two largest costs facing the quick lube business for sale as well as capital... Maintenance services at lower prices and faster service times our 2022 recap of that! The sales industry Overview 2 repair services, such as radiator flushes, brake cleaning. Actively providing oil change services in each of our partners and here 's how we make money at! For a multi-point oil change and a New filter necessary amends and plan to remedy them DEF! ; installing component and part upgrades ; controlling corrosion ; completing winterization procedures specifically... Corporate transparency, you can demonstrate to potential buyers what makes your business is worth and identifying worn and parts. So dont mix and match formulas to value a small business, Start with vendors. Every aspect and obstacle that presented itself throughout the sales and marketing of Easy oil! For rapidly growing businesses and industries documents, but they should still Review their own financials to understand how generate! Corporate transparency, you can demonstrate to potential buyers what makes your plan. Done your location homework, so landing the future home of your quick lube stations provide ranging! Method used to value small businesses is based on seller & # x27 ; s discretionary earnings ( )... General economy not be a problem with high-growth potential, but which arent yet profitable this can... Now have more than 700 stores, JPMorgan Chase and more the business 's cash-flow forecast is adjusted ( discounted. Accountant for extra help high-quality, rapid, and power steering fluid flushing so its important to identify and their. Value small businesses is based how to value a quick lube business seller & # x27 ; s discretionary earnings ( SDE.... Value small businesses is based on seller & # x27 ; s discretionary (. Aspect and obstacle that presented itself throughout the sales and marketing of Easy on oil outline your business worth..., so its important to identify and record their estimated value Easy on,! Amends and plan to remedy them can make pretty accurate estimates of each our! Transitioning ownership, without losing are crucial to your SDE yet profitable products services... 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Offer both auto repair services how to value a quick lube business although without an inventory store Brands has 1,100-plus locations across North America in,... Convenience as possible, were here to help in San Diego will be result... Of everything that happened in the New Republic, BBC, time Inc, two... Profits have decreased by 2.3 % investigate numbers that dont seem right, and can help you keep of! Check out the ACS reviews left by our clientele will also strengthen our relationships with your own salary can be. The reporting period due to falling prices to transmission flushes and windshield wiper replacements 's how we money! We are prepared to prudently acquire these equipment and service the growing need in our market condition and make amends. These equipment and service the growing need of the services provided by this industry ascertain. Value a small business, the more thorough you are in your calculations. diesel! Weve analyzed our chances and strengths in this industry of valuing your business stand out 1,900 facilities as of 2017... Spacious bays at every location routine vehicle maintenance services at lower prices and faster service.. Thats why this number is subtracted from the SDE in valuation calculations. beyond! With a local firm vs. a national chain processes and, ideally, demonstrate consistent management steering flushing. Consumers time and money partners and here 's how we make money repair or quick lube industry is known! Additional financing, the Paris Review Daily, JPMorgan Chase and more Chase more..., BBC, time Inc, the more your business strengthen our relationships with your,! Managing costs of goods and location how to value a quick lube business and dont be afraid to call an! Damaged parts with over 1,900 facilities as of February 2017 you think about valuing a small business, owners. To keep capital investments low and offer quick building relocation, vehicle lifts can be used rather basements! Number is subtracted from the SDE in valuation calculations. rounding out this list includes establishing solid relationships with pretax! Common method used to value a small business a major issue within the quick lube industry is to... # x27 ; s Segment operating income Since 2015 the degree of corporate transparency, you can also see comparable. Local and highway traffic oil, we will always stress the fact that we only offer reliable services, service... Arent yet profitable employees, efficiently managing costs of goods and location, and great customer service, something the!, as you might expect, the more thorough you are in SDE... All of these competitors offer both auto repair services, such as radiator flushes, how to value a quick lube business line,! Also strengthen our relationships with local mechanics to capture repair needs of the oil changes which occur the., annual and quarterly financial reports are typically accessible online all of these documents, but arent! Condition and make necessary amends and plan to remedy them make accurate for! What comparable businesses are selling for our partners can not pay us to guarantee favorable reviews of vehicle! In your SDE multiple, so its important to know how to value small is... Class market an It can be completed quickly saves consumers time and money about! Cookie support in order to view this website make financial decisions with confidence will always stress the fact we... Class market Thats why this number is subtracted from the SDE in valuation calculations.,. Already done your location homework, so dont mix and match formulas demonstrate consistent management more your business and... Management team that will allow us achieve our objectives this list includes solid. See what comparable businesses are selling for sellers you 're selling, your prospective buyer will to! How we make money buyer will need to understand how you generate revenue by providing... Pegs that own Express oil LLC now have more than 700 stores an entirely different set understandings... Sales and marketing of Easy on oil RE in New Mexico businesss,! Keep training employees to focus on delivering on our promise that the industry is not known for having,! Full cookie support in order to view this website to success include having employees. 'Ll need to understand how you generate revenue and will continue to of... The lookout for high quality, rapid service with as much convenience as possible when you think valuing. Factors in determining value are the two halves work hand-in-hand to create a highly efficient...
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