Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Typically, more than 70 percent of revenue is from oil changes. Over my over fifty year career, I have had the privilege of working with many other Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. If you want to take the income approach, you can choose between two commonly used valuation methods. 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. Also our cash flow is impaired and business hours are limited for a retail establishment (Monday through Friday 9:00 a.m. to 6:00 p.m.). Businesses in this industry are very important to the general automotive industry. They are responsible for the direct employment of almost 90,000 people. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. We will always stress the fact that we only offer reliable services. Pre-qualified offers are not binding. Specialties: Snappy Lube is your one stop shop for your automotive needs. 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. When evaluating offers, please review the financial institutions Terms and Conditions. Here is a list of our partners and here's how we make money. 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. About Your Results Our plan at Easy On Oil is to service the middle and upper income markets. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. The average price for a multi-point oil change within the quick lube industry is $36.82. The remaining are small privately-owned establishments. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. This does come at a cost though. (Car Wash Magazine), #11. second to none. We plan to reduce our employee turnover rate by treating our employees equally and well, giving good benefits and paying them well. 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. Here, business assets include anything that adds value to your company. 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. Put your license proudly on display at your business. Car owners instead prefer to pay someone else to do it for them. Valvoline operates the second largest quick lube service chain by number of stores in the United States, with Valvoline Instant Oil Change SM, and the third largest quick lube service chain in Canada, with the Valvoline Great Canadian Oil Change brand. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. We will give a guarantee on all our repairs for a certain amount of miles or time. Job Roles and Responsibilities 6. In fact, most quick lube operators choose to franchise for this reason. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Victory Lane Quick Oil Change. 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. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! (Car Wash Magazine) #7. Easy On Oil will serve the San Diego, California market with four convenient locations and will grow into a business with excellent sales within 3 years. Most of our competitors have adopted point-of-sale systems in their stores. take status photos of any vehicle part. vendors, insurance agents, and others. Capitalization of earnings method: The capitalization of earnings method also calculates a businesss future profitability, taking into account the businesss cash flow, annual rate of return, or ROI, and its expected value. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. Sally Lauckner is an editor on NerdWallet's small-business team. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? Each uses a different aspect or variable of a business to calculate its numerical value either a businesss income, assets, or using market data on similar companies. In the United States, about 450 million oil changes are performed each year. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. So, established businesses with stable profitability often use this valuation approach. A Sample Quick Lube Repair Business Plan Template Table of Content 1. Once you have a plan and purchasing power in place, it is time to secure your location, get your business license, and business insurance policy. 3. Does becoming a quick lube business owner sound good to you? Business plan: A strong business plan helps you make accurate projections for earnings and market growth. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Then, you can demonstrate to potential buyers what makes your business stand out. Sources: New Constructs, LLC and company filings. add technician notes to the photos. 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. Also, our wide range of auto lubricants and repair parts inventory that is (nearly) never out of stock will further cement our place as a reckoning force in the industry. 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. Over half of these competitors offer both auto repair services, although without an inventory store. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. into the automotive business. Our objective is to be precise and honest with clients when it comes to quoting cost estimates. Full range of Auto Lubricants and Repair Parts store. Looking to make a smart automotive business investment? How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. Most online business valuation calculators use a variation of the income approach. This business is your one-stop shop for fast and friendly oil change & maintenance services. Our 2022 recap of everything that happened in the fuel and lubricant industry. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. New Constructs, LLC. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. These businesses are also not involved in body, paint, interior or glass repair. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. In total, Driven Brands has 1,100-plus locations across North America. In fact, most quick lube operators choose to franchise for this reason. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. He will be charged with overseeing the sales and marketing of Easy On Oil. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. Entities are ready to back gas stations and those serving commercial fuel needs. Generating Funding/Start up Capital for Easy On Oil. 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. You should have already done your location homework, so landing the future home of your quick lube business should not be a problem. (Business Wire), #15. You have a loyal customer base. 8 Stalls & Pits! We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. Make sure your company checks these three boxes: You make steady profits. 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. Just 9% of customers come from a 2-mile radius. She is based in New York City. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change Determines vehicle condition by conducting inspections and identifying worn and damaged parts. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. (IHS Automotive), #22. Our Business location provides us with a vast market and many opportunities. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. Read more. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! Every state has a different process when it comes to business licensing. How much is an oil change? We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. But if you have more financial information on hand, you can try a more comprehensive business valuation tool that includes both profit and revenue, as well as assets and liability, in the calculation. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. (Car Wash Magazine), #12. Based on currently available information, Valvoline has a total of 1,595 system-wide stores. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. I also like doing business with a local firm vs. a national chain. 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. 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. Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. 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. 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. comprehensive listing of auto repairs for sale near you, give us a call at 1-800-874-5793 for details. ", 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. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Most locations achieve this figure with just 2-5 service bays available to them. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. Our vision at Easy On Oil is to become the leading business that offers Quick Lube repair services and a well-stocked repair parts shop in San Diego, California. We plan to leverage the highest degree of modern technology to manage a full range of automotive lubricants and parts inventory. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. In 2011, 31% of consumers preferred a premium product. (Business Wire), #13. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. (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.). 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services.
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