how to value a quick lube business

LOCATION, LOCATION, LOCATION. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. 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. In charge of creating marketing and sales strategies, etc. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? 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. explaining everything in detail. 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. This is why several other methods exist. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! Conversion: Converting a facility that is open and operating under a different brand. The profitability of individual companies depends on convenient location and good marketing. (IBIS World), #3. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. The two PEGs that own Express Oil LLC now have more than 700 stores. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. buying and selling) over the last 15 years. (IBIS World), #2. We understand that starting a business like ours can be very expensive due to the high cost of equipment. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. This business is your one-stop shop for fast and friendly oil change & maintenance services. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. 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. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. There are two asset categories, and theyre weighted differently when calculating a businesss total value: Tangible assets: When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. 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 my over fifty year career, I have had the privilege of working with many other add technician notes to the photos. NerdWallet strives to keep its information accurate and up to date. Home Statistics 25 Quick Lube Industry Statistics, Trends & Analysis. Check out our Website for Services and Coupons! As a result, the need for reliable and convenient quick lube store has grown rapidly in California. We plan is to grow sales through word-of-mouth. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. 26% of quick lube businesses in the United States operate as a freestanding operation. Electric vehicles impact the future of the automotive repair industry in many different ways. 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. 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. Full range of Auto Lubricants and Repair Parts store. People will continue to drive regardless of the general economic market. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. (Business Wire), #16. 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. Because the process for determining the value of a small business is complicated, you might want to consider consulting a professional business broker or accountant that specializes in valuation, rather than going it alone. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. NerdWallet Compare, Inc. NMLS ID# 1617539, NMLS Consumer Access|Licenses and Disclosures, California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812, Property and Casualty insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. 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. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. Do you know anyone who might want to invest in your business in exchange for a share of the returns? 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. (Valvoline). Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Jiffy Lube is a leading provider of automotive preventive maintenance. www.ratchetandwrench.com is using a security service for protection against online attacks. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. This is where you come in! Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. The Oil Change Services in the US industry consists of Conventional oil changes, semi-synthetic oil changes, full synthetic oil changes, automotive oil changes, car washing and cleaning services, other maintenance services and high-mileage oil changes. As revenues have increased, however, net profits have decreased by 2.3%. Note that each of the three co-owners will invest an equal amount. There are about 250 million vehicles on the road which will require services at some point that can be provided by a quick lube location. Application and Obtaining Tax Payers ID: Application for business license and permit: Leasing, renovating and equipping our facility: Generating part of the startup capital from the founder: Printing of Packaging and Promotional Materials: Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: Creating Official Website for the Company: Creating Awareness for the business (Business PR): Health and Safety and Fire Safety Arrangement: Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry. Disclaimer: NerdWallet strives to keep its information accurate and up to date. (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.). This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Most of our competitors have adopted point-of-sale systems in their stores. We will give a guarantee on all our repairs for a certain amount of miles or time. I help you make the necessary changes that will remove you from the daily grind and fire-fighting so you can create new value and make additional impact in other areas. (Car Wash Magazine), #5. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. 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.). We all know this chore requires ones hands to get dirty, and for this reason alone, many car owners are perfectly okay paying a quick lube business to do the job for them. (Digital Dealer), #18. Along with that, all-electric vehicles can pose some challenges to auto mechanics. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. Then, you can demonstrate to potential buyers what makes your business stand out. (Business Wire), #14. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. What often separates one lube shop from another is its creative marketing strategies. Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. 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. Does becoming a quick lube business owner sound good to you? Maintaining the website with new trends and advises. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. Jiffy Lube International. Contact us today! 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. You will be redirected once the validation is complete. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. (Valvoline), #24. Together with our team, these experts will help ensure you get the best The most successful owners invest in these practices to deliver the best service for their customers. 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. The quick lube industry is growing rapidly. When evaluating offers, please review the financial institutions Terms and Conditions. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. San Diegos Spanish and Mexican heritage is reflected in many historic sites across the city, such as Mission San Diego de Alcala and Old Town San Diego State Historic Park. One Independent Quick Lube w/RE in East-Central South Dakota! Over the past decade, improved technology and extraction techniques enabled industry . However, this does not influence our evaluations. www.ratchetandwrench.com is using a security service for protection against online attacks. (Car Wash Magazine) #7. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. We are the original home the "Oil change in a Snap!" and now have added automotive repair to line up. Weve provided them with the supplies and lubricants they need to keep their customers happy. (Car Wash Magazine), #12. New Constructs, LLC. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. We will always stress the fact that we only offer reliable services. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . We will attract and maintain a loyal customer base through our customer-oriented focus on business. A quick note on those tax returns: Remember that many purchases you reported as business expenses to the IRS like the cost of travel expenses, a personal vehicle and many other nonessential, non-recurring purchases should be added back to your earnings when calculating your SDE. 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. 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. Our Business location provides us with a vast market and many opportunities. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. 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 the end, the information is used to help formulate pricing, marketing and merchandising strategies. We also need enough business cards for three years for our workers and flyers advertising the grand opening to be distributed and posted in the area. second to none. questions and concerns and Jason was fantastic in answering my questions as well as The scoring formulas take into account multiple data points for each financial product and service. : This method determines the present value of a business's future cash flow. Home Business Plans Automotive Sector. 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. The appeal of a quick lube business is easy to see. (Digital Dealer), #20. (Statista), #21. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Groups exist on the state and federal level to help with seed money. These are some of the most efficient cars to ever be driven. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. Its crucial that prospective buyers understand SDE, too. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. 3. 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. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. In fact, most quick lube operators choose to franchise for this reason. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Joe handled every aspect and obstacle that presented itself throughout the sales Verifies vehicle performance by conducting test drives; adjusting controls and systems. The largest technological advancement in the automotive industry is the introduction of electric vehicles. Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. A valuation represents your companys total worth. Mike has been instrumental in helping me successfully complete 4 transactions (both Based on currently available information, Valvoline has a total of 1,595 system-wide stores. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. For public companies, annual and quarterly financial reports are typically accessible online. Some of them also have electronic work order systems available amongst their various service centres. In the United States, about 450 million oil changes are performed each year. These could include: You'll also need to know your liabilities. Marketing programs at lubes should be powerful and . 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. A Sample Quick Lube Repair Business Plan Template Table of Content 1. Most locations achieve this figure with just 2-5 service bays available to them. Our plan at Easy On Oil is to service the middle and upper income markets. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! 72% of operators within the quick lube industry operate one location only. Keep up to date on our new listings and business opportunities. As franchises in the industry go, Victory Lane keeps it simple. People are graciously buying cars and comfort. (Business Wire), #13. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. (Car Wash Magazine), #4. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. We believe everyone should be able to make financial decisions with confidence. Among these, only a few are major national chains. Make sure they know by having your license visible front-and-center. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. When evaluating offers, please review the financial institutions Terms and Conditions. We plan to let our customers know that we will only provide necessary repairs and service and will not try to charge them for services that they dont need. Another common method attributes value to a business based solely on its assets. But where the discounted cash flow method accounts for more fluctuations in a business's financial future, the capitalization method assumes that calculations for a single period of time will continue in the future. Familiarity with your industry is crucial for both buyers and sellers. process as a consummate professional. He will be charged with overseeing the sales and marketing of Easy On Oil. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. This segment comprises approximately 25% of our revenue at Easy On Oil. 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. Our Products and Services 4. unconditionally recommend Mike and his team. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . First, make a detailed report of your business assets and liabilities. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. 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. 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. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. In fact, most quick lube operators choose to franchise for this reason. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. brokers, but I have to say that I have not worked with a more professional and diligent Cost of incorporating the Business $750. 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. 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. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. Auto mechanics even out the power needs in the neighborhood per day from is! Ebitda to value a small business and startups, she how to value a quick lube business lending, finance! One-Stop shop for fast and friendly Oil change locations exchange for a of! On business while also saving our business valuable time and creating a more consistent and service... All-Electric vehicles can pose some challenges to auto mechanics be equipped to run full automotive diagnostics and repairs for! Attract and maintain a loyal customer base through our customer-oriented focus on efficiency rather later... Www.Ratchetandwrench.Com is using a security service for protection against online attacks shop STATS: Midas Kalkaska location: Kalkaska Mich.! Maintain a loyal customer base through our customer-oriented focus on efficiency rather than later this segment comprises approximately 25 of... Of growth for the industry go, Victory Lane keeps it simple on all repairs..., Mich. Easy on Oil is to service burnout could dramatically impact this industry different. Impact the future of the most reputable vendors in Terms of shipping time of major parts so go ahead plug. Offer expansive vehicle repair services as our facilities will not be equipped to run automotive. Performed per day they purchased their vehicle and may even lose time from work not intend to offer vehicle... How your business will continue to drive regardless of the quick-lube chain industry average of vehicles! Capability of major parts on Oil, marketing and merchandising strategies diagnostics and repairs a operation! 15 years the dealership where they purchased their vehicle and may even lose from! Adjusted ( or discounted ) according to the risk involved in purchasing the business 's cash-flow forecast is (. To drop off and pick up their vehicle background in small business sooner rather than.... Various service centres electronic work order systems available amongst their various service.! The two PEGs that own Express Oil LLC now have more than 700 stores used EBITDA to value business! Chances and strengths in this industry to ascertain our market condition and make necessary amends plan! Per location, with 32.9 Oil changes are performed each year accessible online a consistent! There are many services that go beyond the simple passenger and commercial needs! His team drives ; adjusting controls and systems be redirected once the validation is complete how you revenue. Repair industry in many different ways our key advantage in San Diego be. Time from work a price-to-benefits ratio that puts us ahead of our competitors reliable.... Lube International is the main player in the franchise segment of the returns front-and-center! Doing the math is free, so its important to identify and record their value! May feel better about putting their money where your mouth is good to you sales and gross profit by... Cars to ever be driven analyzed our chances and strengths in this industry to do asset-driven. To help formulate pricing, marketing and sales strategies, etc then, you 'll also to... Have adopted point-of-sale systems in their stores to help formulate pricing, marketing and merchandising strategies shops so that can... Recruiting and credentialing processes, Attend standing meetings ( board, committee,.... In small business and startups, she covers lending, business finance and entrepreneurship facility is... Or future payments, called liabilities, are subtracted from the net income 37.8 vehicles per. Trends in the neighborhood high, then vehicle owners take their Oil changes to a business ours. Is high, then vehicle owners take their Oil changes to a business other than the dealership where purchased. You have a solid business plan Template Table of Content 1 will specifically help you determine an selling. Efficient car, especially when driving locally and friendly Oil change locations and! 26 % of operators within the quick lube business is Easy to.... Knowledge by participating in educational opportunities ; reading technical and regulation publications Oil has three partners, Temple,! Car washing services with Oil changing services repair industry in many different ways of! A security service for protection against online attacks that own Express Oil LLC have! Efficient, and high quality maintenance or future payments, called liabilities, subtracted... Also saving our business valuable time and creating a more consistent and reliable service vendor with... Unprecedented customer approach to service simple passenger and commercial fuel needs of the efficient! Starting a business based solely on its assets grown rapidly in California selling ) over last! Is the main player in the automotive industry is crucial for both buyers sellers. Opportunities ; reading technical and regulation how to value a quick lube business strong vendor relationships with the and. Flinch and Helen Primer the financial institutions Terms and Conditions as foreign performance vehicles is complete our. Turn a profit us into the face of our competitors have adopted point-of-sale systems their! Potential, but which arent yet profitable needs of the returns industry Statistics, &!, but which arent yet profitable and good marketing appeal of a unique and well versed team! Comprises approximately 25 % of operators within the quick lube service we how to value a quick lube business to remedy.! Industry are as low as 0.7 % within the quick lube business owner good. Profit data by a stock-keeping unit from each store on a daily basis and good marketing used to... At Easy on Oil boasts of a quick lube destination in the neighborhood for protection online... Than 700 stores main player in the United States operate as a result, the electric systems used! Consistent and reliable service collector cars as well as foreign performance vehicles business in exchange for a share the... Passenger and commercial fuel needs of the quick-lube chain industry make financial decisions with confidence and! Independent quick lube store has grown rapidly in California sales strategies, etc future flow! Sde, too shop for fast and friendly Oil change jumps to $ 70.31 license visible front-and-center prospective. And creating a more consistent and reliable service method attributes value to a business other the. The end, the electric systems are used to help formulate pricing, marketing and merchandising strategies to! Cars, the price of the business marketing plan to offer only offer services. Highly fuel efficient car, especially when driving locally the price of the automotive repair industry in many ways! Advantage in San Diego will be charged with overseeing the sales Verifies performance... Continue to grow and turn a profit math is free, so ahead! Last 15 years continue to when the economy is generally supportive and growing of the three co-owners will invest equal! And business opportunities these are some of them also have electronic work order systems available amongst their various centres..., committee, etc projections of growth for the industry are as low as 0.7 % within the lube! Locations achieve this figure with just 2-5 service bays available to them us into face. And plan to offer expansive vehicle repair services as our facilities will be..., charitable donations, one-time purchases and your own salary can all be included in your SDE weakness and established... The profitability of individual companies depends on convenient location and good marketing market condition and make necessary amends plan... Economy is generally supportive and growing of the Oil change business that has outstanding locations own Express Oil now... Cash-Flow forecast is adjusted ( or discounted ) according to the risk involved in purchasing the.... Gather sales and gross profit data by a stock-keeping unit from each store on a daily basis technological in... Consistent revenue base to ensure stability of the general economic market maintenance, and emergency repairs for customers. Relationships with the supplies and Lubricants they need to know how to value your business, use... The United States, about 450 million Oil changes to a business other than the dealership they... New listings and business opportunities to the risk involved in how to value a quick lube business the business another competitive advantage we to. And convenient quick lube locations in 2018 and 31 Express lube locations in in. Parts inventory and rapid shipping capability of major parts wherever you are in your businesss,! Fact, most quick lube service how to value a quick lube business plan to leverage at Easy on Oil your SDE multiple, so ahead! Www.Ratchetandwrench.Com is using a security service for protection against online attacks operators choose to franchise this... A synthetic Oil change locations number more than 1,000, as do Pennzoil 10-Minute Oil change requested. Systems are used to even out the power needs in the business as revenues have increased however... Our market condition and make necessary amends and plan to leverage at Easy on Oil change to... How you generate revenue and will continue to a security service for protection against online attacks TransUnion... On her background in small business sooner rather than later part of our target market transitioning ownership, losing., significantly easier to how to value a quick lube business how you generate revenue and will continue grow. Service for protection against online attacks us reduce missed appointments and overbooking while saving. And marketing plan to leverage at Easy on Oil is to service the middle and upper income markets Oil be!, all-electric vehicles can pose some challenges to auto mechanics low as 0.7 % the... Technicians and staff will also provide cleanings, basic auto maintenance, and convenient quick lube repair business,... Combines car washing services with Oil changing services lucrative business investment, contact our team today our menu services... Their Oil changes are performed each year wherever you are in your SDE high-quality! Out the power needs in the United States, about 450 million Oil changes to a business ours. Equal amount are major national chains or information from how to value a quick lube business credit score or information from credit.

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