LOCATION, LOCATION, LOCATION. Meredith has worked as a writer and editor for more than a decade. She is based in New York City. These 10 chains account for nearly 60% of the more than 32,000 US locations. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. NerdWallet's ratings are determined by our editorial team. 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. 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 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. To calculate your businesss SDE: Start with your pretax, pre-interest earnings. Our Mission and Vision Statement 5. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. However, youre fully capable of valuing your business using your own resources. So, established businesses with stable profitability often use this valuation approach. Re-opening a former auto repair or quick lube business can save significant time and money. Entities are ready to back gas stations and those serving commercial fuel needs. In the United States, about 450 million oil changes are performed each year. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! 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. The Top Automotive Oil Change Franchises of 2023. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . It's likely that any sellers you're working with will want to see your credit report and basic financial profile. 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. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. The average price for a multi-point oil change within the quick lube industry is $36.82. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of 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. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Quick Lube operating income is up to $162 million TTM . Note that each of the three co-owners will invest an equal amount. (IHS Automotive), #22. A good rule of thumb is to estimate how much a piece of equipment would sell for today, and use that number. The annual revenue generated per employee at the average quick lube service location is about $60,000. 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. Check out the ACS reviews left by our clientele. Cost of incorporating the Business $750. If you want to take the income approach, you can choose between two commonly used valuation methods. Sample 1 Sample 2 Sample 3 Based on 6 documents However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. People will continue to drive regardless of the general economic market. Youve come to the right place. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. Groups exist on the state and federal level to help with seed money. (If you used EBITDA to value your business, youll use an EBITDA multiple.) The higher your SDE multiple, as you might expect, the more your business is worth. 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. Buyers obviously won't need all of these documents, but they should still review their own financials. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. The average age of a vehicle owned in the United States is 11.4 years. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. 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. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Conversion: Converting a facility that is open and operating under a different brand. 8 Stalls & Pits! Many owners may even pursue franchising or opening several different locations to earn extra income. All financial products, shopping products and services are presented without warranty. Live for the first time at our partner ilani Casino! 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. Knowing your peer companies will also help you assess your market share and growth potential. December 16, 2021. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. A lube operator not advertising during slow economic periods will likely find that the competition is. Industry Overview 2. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. It can gather data to . 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. Most of our competitors have adopted point-of-sale systems in their stores. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. 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. Based on currently available information, Valvoline has a total of 1,595 system-wide stores. Keep up to date on our new listings and business opportunities. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. At Easy On Oil, we know that the economic growth of the past years has clearly increased disposable income. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . Pre-qualified offers are not binding. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. Liabilities include any debt or outstanding credit on your businesss books, and they detract from the overall value of a business. (Thats why this number is subtracted from the SDE in valuation calculations.) add technician notes to the photos. (Car Wash Magazine), #7. This method can be used to value a business for sale as well as raising capital. Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. 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. Additionally, franchising a business comes with an entirely different set of understandings and obligations. Over half of these competitors offer both auto repair services, although without an inventory store. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. 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. 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. 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. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Our partners cannot pay us to guarantee favorable reviews of their products or services. Our Business location provides us with a vast market and many opportunities. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Marketing programs at lubes should be powerful and . They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. (IBIS World), #3. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. The remaining are small privately-owned establishments. In charge of creating marketing and sales strategies, etc. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. 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. Performing services on brake systems to coolant flushes. In 2011, 31% of consumers preferred a premium product. Joe handled every aspect and obstacle that presented itself throughout the sales 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. Franchised Oil Change & Repair Shop in Solano County. He will be charged with overseeing the sales and marketing of Easy On Oil. (Digital Dealer), #20. 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. Next, you'll need to outline your business plan and model. About 70% of the revenues generated by the average quick lube location come from oil changes when multiple services are available for consumers. If buying and selling businesses is a new frontier for you, you can consult any number of online resources to help you determine the value of a business. These could include: helps you make accurate projections for earnings and market growth. More on liabilities in a bit. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Here is a list of our partners and here's how we make money. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. This process is automatic. Order Reprints. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. They are responsible for the direct employment of almost 90,000 people. 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