Easy On Oil will be managed by its three founding partners. The most popular has been around for a while, hybrid-electric cars. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. Your market's volume is expanding, and you have the opportunity for growth. 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. Here, business assets include anything that adds value to your company. To calculate your businesss SDE: Start with your pretax, pre-interest earnings. However, this simple method doesn't always provide the full picture of a company's value. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. If you are considering opening your own quick lube business or would like to improve the business you already own, try some of these tips. 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. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. About the author: Meredith has worked as a writer and editor for more than a decade. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. As cars become more complex, even something as simple as changing the oil could require a manual. (Digital Dealer), #19. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. We will give a guarantee on all our repairs for a certain amount of miles or time. Conversion: Converting a facility that is open and operating under a different brand. 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. Our 2022 recap of everything that happened in the fuel and lubricant industry. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. More on liabilities in a bit. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Home Business Plans Automotive Sector. Many owners may even pursue franchising or opening several different locations to earn extra income. One Independent Quick Lube w/RE in East-Central South Dakota! It can be an especially useful approach for rapidly growing businesses and industries. For the average business, they account for 60.7% of total expenses. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. Check out our Website for Services and Coupons! Contact us today! 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. Liabilities include any debt or outstanding credit on your businesss books, and they detract from the overall value of a business. This information may be different than what you see when you visit a financial institution, service provider or specific products site. 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. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. A Sample Quick Lube Repair Business Plan Template Table of Content 1. 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. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. They are responsible for the direct employment of almost 90,000 people. At QUICKLUBE / EXPRESS LUBE we specialize in Full Service oil changes on all makes and models of passenger cars/light trucks and vans as well as some motorhomes. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. 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. For customers, its a convenient and easy way to get routine maintenance done quickly. The average vehicle owner will change their oil about every 5,000 miles. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. process as a consummate professional. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. 1. Do you want to start a Quick Lube company and need to write a business plan? We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Paul Hodowanic. 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. These could include: You'll also need to know your liabilities. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 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. As revenues have increased, however, net profits have decreased by 2.3%. (Valvoline). Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. text the finished report to the customer's mobile device. Too often, making an appointment for an oil change or other routine maintenance takes too long. The income approach to business valuation determines the amount of income a business can expect to generate in the future. Put your license proudly on display at your business. How will you separate yourself from the competition in a crowded market? We are the original home the "Oil change in a Snap!" and now have added automotive repair to line up. Some of them also have electronic work order systems available amongst their various service centres. 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 believe that by having a high level of commuting traffic, and an equally high level of tourism traffic on local highways, our business location and shop will always bring in demand for quick lube services. Our partners cannot pay us to guarantee favorable reviews of their products or services. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. 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. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. 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. Please enable JavaScript on your browser and try again. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Long wait for services and parts wont b entertained at East On Oil as we strive to offer the best service and product in our market. In 2011, 31% of consumers preferred a premium product. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. Subscribe to our Blog. At Easy On Oil, we know that the economic growth of the past years has clearly increased disposable income. First, make a detailed report of your business assets and liabilities. Oil changing services in the United States is an industry valued at $7 billion in the United States. The service requires full JavaScript support in order to view this website. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. The largest technological advancement in the automotive industry is the introduction of electric vehicles. Make sure your company checks these three boxes: You make steady profits. (Digital Dealer), #18. (Digital Dealer), #20. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. If so, read on about what it takes to become one. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. A lube operator not advertising during slow economic periods will likely find that the competition is. 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. For a full breakdown of the quick lubes we have for sale, as well as a Liabilities that will factor into your calculations include: Other debts or payables, as well as unearned revenue. Another 16% of business owners have two locations where they provide services. Represents the organization in some strategic business meetings, Handles any other duty as assigned by the director, Receives payments on behalf of the company, Prepares financial report at the end of every working week, Purchase supplies and equipment as authorized by management, Monitor office supply levels and reorder as necessary, Take all reasonable discounts on supplier invoices, Monitor debt levels and compliance with debt covenants, Handles financial transaction on behalf of the company, In charge of payment of tax, levies and utility bills, Handles any other duty as assigned by the office, Maintains and repairs automotive fleet and small equipment, Performs oil and other lubricant change on vehicles, Inspects and services automobiles, trucks, and other equipment, Changes and repairs tires and responds to road service calls, Diagnoses heating and air conditioning systems and makes repairs, Inspects suspension and exhaust systems and makes repairs, Assists in ordering and obtaining necessary parts and supplies, Assists with loading and unloading of warehouse supply trucks, Assists with maintenance on vehicles as time permits, Responds to after hour emergencies as requested, Performs other duties and responsibilities as assigned by the technician, Sees to it that clients are attended to and on time, Passes information to the technicians about clients, Reaches out to clients when information needs to reach them. Take 5 Oil Change is one of their fastest growing brands. With a national footprint of more than 2,000 franchisee owned service centers across the country, Jiffy Lube offers a range of services from oil changes and tire rotations, to everything in between. 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. Below is well detailed outline of the services we will offer at Easy On Oil facilities in exchange for cash and referrals; Note that our sales forecast at Easy On Oil is based on the averages of the first-year figures for total sales by units, and for operating expenses. This is why several other methods exist. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. KEYWORDS oil change Operations Quick Lube. NerdWallet's ratings are determined by our editorial team. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. 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. 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. We understand that starting a business like ours can be very expensive due to the high cost of equipment. 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. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. Most locations achieve this figure with just 2-5 service bays available to them. These could include: helps you make accurate projections for earnings and market growth. ", 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. We have tapped into real estate where our competitors cannot go. www.ratchetandwrench.com is using a security service for protection against online attacks. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. She has over a decade of experience in print and online journalism. A valuation represents your companys total worth. 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. 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. The appeal of a quick lube business is easy to see. 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. This is where you come in! Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Additionally, franchising a business comes with an entirely different set of understandings and obligations. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. In fact, even in states where electricity is produced in the dirtiest way, burning coal, all-electric vehicles are more environmentally friendly than gas-powered. Our goal is to capture a majority of the market in little or no time. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. According to reports, the industry is fragmented; the 50 biggest companies generate less than 40 percent of revenue. Why do diesel exhaust fluid (DEF) prices keep rising and falling? 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. Oil Change Services in the US industry trends (2017-2022) The Oil Drilling and Gas Extraction industry in Canada has endured significant volatility over the five years to 2022. 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. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. 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. Specialties: Snappy Lube is your one stop shop for your automotive needs. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Among these, only a few are major national chains. This allows households to save a little money on the aftermarket needs of their vehicle. 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. Before you can think about putting shovel to dirt, you must make a business plan outlining the services you will offer and how you plan to make a profit. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. Most of our competitors have adopted point-of-sale systems in their stores. A typical location performs about 1,200 jobs per month. Implement an ongoing training program. Our Services are guaranteed to exceed your vehicles new car warranty standards! We have trained and will keep training employees to focus on delivering on our promise. Generating Funding/Start up Capital for Easy On Oil. Operating expenses and labor are the two largest costs facing the quick lube industry. One common method used to value small businesses is based on seller's discretionary earnings (SDE). All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. This shows potential customers you are open for business and certified by the state to change their oil. 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. take status photos of any vehicle part. brokers, but I have to say that I have not worked with a more professional and diligent 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. About Your Results 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. In comparison, leasing costs are just 9% of the overall expenses for the average location. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. 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