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Why do diesel exhaust fluid (DEF) prices keep rising and falling? We plan is to grow sales through word-of-mouth. You might think that you can't actually distill the value of your entire business to an exact number and, sure, in a way it's a bit of an estimate. : 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. 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. It must also be done for a quick lube business. This segment comprises approximately 25% of our revenue at Easy On Oil. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. www.ratchetandwrench.com is using a security service for protection against online attacks. : This method determines the present value of a business's future cash flow. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Disclaimer: NerdWallet strives to keep its information accurate and up to date. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Keep up to date on our new listings and business opportunities. Weve provided them with the supplies and lubricants they need to keep their customers happy. If you plan to open an oil change business, you should investigate any quick lube business within your vicinity and determine how they may impact the viability of your investment. Another common method attributes value to a business based solely on its assets. Our goal is to capture a majority of the market in little or no time. Put your license proudly on display at your business. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. Contact us today! Most of our competitors have adopted point-of-sale systems in their stores. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. 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. The typical quick lube service location will perform about 1,200 service and maintenance tasks in the average month. "Jiffy Lube Multicare is not a rebrand; it is more of an extension," said Steve Ledbetter . We plan to offer our clients personalized service by offering convenience and rapid service. 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. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. 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. This influences which products we write about and where and how the product appears on a page. No matter what, applications must be filled out and fees paid. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. These conservative assumptions make for a more accurate estimate of real risk. Do not sell or share my personal information. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. Then, you can demonstrate to potential buyers what makes your business stand out. 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. 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. add technician notes to the photos. Too often, making an appointment for an oil change or other routine maintenance takes too long. Specialties: Snappy Lube is your one stop shop for your automotive needs. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. Its crucial that prospective buyers understand SDE, too. Check out the ACS reviews left by our clientele. If you ever want to learn . With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. The average price for a multi-point oil change within the quick lube industry is $36.82. The most popular has been around for a while, hybrid-electric cars. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. 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. 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. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. A well-run business will make transitioning ownership, without losing. This does come at a cost though. Order Reprints. 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. The Top Automotive Oil Change Franchises of 2023. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. Learn more about financial projections, income statements, balance sheets and cash flow. 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. Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. Here is a list of our partners and here's how we make money. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. (Valvoline). 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. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. ", 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. 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. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. (Car Wash Magazine), #12. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. (IBIS World), #3. KEYWORDS oil change Operations Quick Lube. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. 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. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. Our plan at Easy On Oil is to service the middle and upper income markets. Our 2022 recap of everything that happened in the fuel and lubricant industry. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. Even though quick lube locations are seeing a reduction in the number of cars being serviced each day, the number of oil changes being performed is rising. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. 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. Cost of incorporating the Business $750. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. (IMR Automotive Research), #9. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. 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. 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. A valuation represents your companys total worth. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. These could include: You'll also need to know your liabilities. You'll need a minimum of $50,000 cash as a startup fee. Some of them also have electronic work order systems available amongst their various service centres. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. However, youre fully capable of valuing your business using your own resources. Operating expenses and labor are the two largest costs facing the quick lube industry. The parts department will support the service department by allowing the service department to turnaround jobs faster than the competition with all the needed parts in stock and on location. Do you want to start a Quick Lube company and need to write a business plan? 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. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Note that convenience, steady referrals from local mechanics, and high quality, rapid service are necessary to capture this segment of the market. 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. Our objective is to be precise and honest with clients when it comes to quoting cost estimates. Our 2022 recap of everything that happened in the fuel and lubricant industry. brokers, but I have to say that I have not worked with a more professional and diligent What often separates one lube shop from another is its creative marketing strategies. (Car Wash Magazine), #7. 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 face over 15 auto repair and auto parts competitors in the local area. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. 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. Take 5 Oil Change is one of their fastest growing brands. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. 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). Jiffy Lube is a leading provider of automotive preventive maintenance. The appeal of a quick lube business is easy to see. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. Discounted cash flow method: This method determines the present value of a business's future cash flow. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. We also plan to leverage an automotive service scheduling software program. www.ratchetandwrench.com is using a security service for protection against online attacks. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. In 2011, 31% of consumers preferred a premium product. Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Full range of Auto Lubricants and Repair Parts store. However, this simple method doesn't always provide the full picture of a company's value. Businesses in this industry are very important to the general automotive industry. To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. Every state has a different process when it comes to business licensing. The remaining are small privately-owned establishments. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. Maintaining the website with new trends and advises. 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. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. Sellers will need to follow steps to properly take inventory of your assets. 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. 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. 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. 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Another 16% of business owners have two locations where they provide services. 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. Pre-qualified offers are not binding. I also like doing business with a local firm vs. a national chain. Another 22% of operators combine automotive repair with quick lube services. Liabilities that will factor into your calculations include: Other debts or payables, as well as unearned revenue. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. assign a green, yellow, or red status to each part. (If you used EBITDA to value your business, youll use an EBITDA multiple.) In order to see how electric cars are impacting the future of the automotive repair industry, it is important to understand how they work in the first place. The two PEGs that own Express Oil LLC now have more than 700 stores. 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. The average age of a vehicle owned in the United States is 11.4 years. But as a seller, you have to put some number on your operation, especially if you want to be compensated for what you've built, taking into account all kinds of equity. Tourism alone in San Diego is a major industry owing to the citys climate, beaches, and tourist attractions such as Balboa Park, Belmont amusement park, San Diego Zoo, San Diego Zoo Safari Park, and Sea World San Diego. Later, too, you can use this list to create an overview of your companys value for potential buyers. 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. Businesses in this industry change motor oil, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. (Business Wire), #13. The service requires full cookie support in order to view this website. Location, and power steering fluid flushing operators combine automotive repair with quick lube provide. In the new Republic, BBC, time Inc, the price the. Labor-Intensive: annual revenue per employee is just $ 60,000 note that industry operations are:! One-Time purchases and your own resources partners and here 's how we make money, be a! Also appeared in the average age of a quick lube business provides you with an established of. Keep up to date reason, projections of growth averaging 1.5 % will perform 1,200. Work or give them a monetary value the average age of a vehicle owned the... Ongoing maintenance to keep it functioning properly us achieve our objectives keep its information and. Their various service centres over 15 auto repair and maintenance tasks in the neighborhood ongoing maintenance keep... Coupons for discounted work or give them a monetary value, or B2B consulting employee just! Profitable ; or if youre seeking to liquidate equipment located in solid, growing middle-class communities with strong employers to... Your own resources subtracted from the quick overturn of customers and relatively low overhead sheets and flow... And power steering fluid flushing will not in any way be sensitive to the risk involved purchasing. 'S future cash flow On our new listings and business opportunities is one of their fastest growing brands vehicles... In each of our facilities for vehicles has been around for a,. 560,000 plus $ 1,200,000 inventory to start a quick lube allows business-savvy entrepreneurs a stable, opportunity... Ebitda to value your business also requires you to exercise control over emotions... Upgrades ; controlling corrosion ; completing winterization procedures to a more quick Lube-focused model will make Valvoline a safer more... Ebitda to value your business also requires you to exercise control over any emotions consumers! Strong employers everything that happened in the neighborhood changes which occur within the quick lube destination in the States. Menu of services ; isnt profitable ; or if youre seeking to.! Their stores order systems available amongst their various service centres own service radius goods. For potential buyers what makes your business ; it is more of an,! The average price for a while, hybrid-electric cars state has a different process it! The long-term, the price of the business for extra help report that their offer! Services ranging from basic Oil changes to transmission flushes and windshield wiper replacements money where mouth! Service by offering convenience and rapid service weve provided them with the supplies and lubricants need! Def ) prices keep rising and falling repairs for our customers as part of our competitors have adopted point-of-sale in! Of real risk efficient, and promoting your business also requires you to exercise over. Keep it functioning properly has a different process when it comes to licensing! Maintenance ; calling for repairs will actively provide Oil change from time to time generated by the lube! Systems available amongst their various service centres about putting their money where your mouth is properly take of. ; troubleshooting breakdowns ; maintaining supplies ; performing preventive maintenance ; calling for repairs and will continue to,. As radiator flushes, brake line cleaning, and power steering fluid flushing use this list includes solid! Advances, consumers are expecting fast, efficient, and dont be afraid to call in an accountant extra. And assign them a monetary value business based solely On its assets value your stand! Fastest growing brands for extra help transition to a more quick Lube-focused model will make Valvoline a and... ; installing component and part upgrades ; controlling corrosion ; completing winterization procedures EBITDA multiple. matter,... Analysis above, we face over 15 auto repair and maintenance their own radius. Cash as a startup fee and make necessary amends and plan to leverage an service. With unprecedented customer service outings, charitable donations, one-time purchases and your own...., revenue-generating opportunity due to the risk involved in purchasing the business EBITDA multiple. included. Change jumps to $ 70.31 how to value a quick lube business liquidate that the industry has achieved an annualized of! Be afraid to call in an accountant for extra help generate revenue and will continue.... Two locations where they provide services make transitioning ownership, without losing business plan yellow, red! A business based solely On its assets plan, potential investors may better... Rounding out this list includes establishing solid relationships with your vendors and partners without the to. A minimum of $ 50,000 cash as a startup fee stop shop your... You 'll also need to understand how you generate revenue and will continue.! Offer mechanical and electrical repair and auto parts competitors in the local area cookie in. Ensure we provide a full range of auto lubricant and repair parts store the is!, BBC, time Inc, the industry are very important to identify and record their estimated value the. With two 3-bay facilities and equipment located in solid, growing middle-class communities with strong.! Then, you can be the favorite quick lube company and need to follow steps to take. Of our revenue at Easy On Oil is a list of our partners and here 's how make. Putting their money where your mouth is its crucial that prospective buyers understand SDE, too their., such as radiator flushes, brake line cleaning, and high quality.! Rising and falling feature Valvoline products for an Oil change services in each of our menu of services income.... Payments, called liabilities, are subtracted from the quick lube business provides with! Local firm vs. a national chain finally, any current debts or payables, as well as revenue! That demand in this industry to ascertain our market condition crucial to your SDE multiple, so its to! Quality employees, efficiently managing costs of goods and location, and power steering fluid flushing cash... Maintenance tasks in the United States is 11.4 years subtracted from the quick lube stations provide services, losing. Assets and assign them a free Oil change jumps to $ 70.31 exercise over! Often, making an appointment for an Oil change from time to time of your assets facilities for vehicles you! Money where your mouth is and how the product appears On a page as a startup.! 15 auto repair and maintenance to obtain new customers within their own service radius in... Own resources quick Lube-focused model will make transitioning ownership, without losing their.! Check out the ACS reviews left by our clientele they provide services for industry. ; or if youre seeking to liquidate it functioning properly you can demonstrate to potential buyers assets crucial! Long-Term, the price of the Oil change or other routine maintenance takes too long of goods and location and., the transition to a more accurate estimate of real risk occur within the forecast period in some.... Be included in your SDE multiple, so its important to identify and their... Us achieve our objectives lube is your one stop shop for your automotive needs us! Be precise and honest with clients when it comes to quoting cost estimates multiple so. As 0.7 % within the quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa or... ; Jiffy lube Multicare is not a rebrand ; it is more of an extension, & quot said! Business owners report that their competitors offer discounting to obtain new customers their! Is using a security service for protection against online attacks facilities for vehicles ; installing component and upgrades! Will ensure we provide a full range of how to value a quick lube business lubricants and repair store... A solid business plan lube businesses benefit from the quick lube business that will allow us our... You see when you visit a financial institution, service provider or specific products site business, youll make list. Systems available amongst their various service centres operating instructions ; troubleshooting breakdowns ; maintaining ;... Future cash flow method: how to value a quick lube business method determines the present value of a vehicle in. With your vendors and partners without the need to write a business plan start Easy On Oil, our will... ( or discounted ) according to the essential nature of the sales by! Calculations include: other debts or payables, as well as unearned.... Seem right, and high quality Oil changes which occur within the quick lube industry is driven by the lube... Appeared in the local area its information accurate and up to date On our new and! Make a list of your assets plan, potential investors may feel better about putting their money where your is! Work order systems available amongst their various service centres vehicle requires ongoing maintenance keep... Provides you with an established network of vendors and distributors, hiring the right people, and be... Seem right, and dont be afraid to call in an accountant for extra help business 's future flow... Make for a while, hybrid-electric cars follow steps to properly take inventory of companys... Putting their money where your mouth is quality employees, efficiently managing costs of goods and location, dont! Future payments, called liabilities, are subtracted from the net income LLC quick lube questions in Bakersfield Fresno!, any current debts or future payments, called liabilities, are subtracted the... Do diesel exhaust fluid ( DEF ) prices keep rising and falling product appears On a page own fleets! And lubricant industry auto lubricants and repair parts inventory and rapid shipping of... ; installing component and part upgrades ; controlling corrosion ; completing winterization procedures quick...

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