Then, you can demonstrate to potential buyers what makes your business stand out. As franchises in the industry go, Victory Lane keeps it simple. person. Even if you don't adjust the asset's worth according to the current market, you can still get a good sense of a businesss material value. 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. 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. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. Groups exist on the state and federal level to help with seed money. buying and selling) over the last 15 years. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. The Top Automotive Oil Change Franchises of 2023. Franchise Quick Lube, Car Wash, and RE in New Mexico! (Car Wash Magazine), #8. 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. Do you want to start a Quick Lube company and need to write a business plan? explaining everything in detail. So, established businesses with stable profitability often use this valuation approach. No matter what, applications must be filled out and fees paid. The service requires full JavaScript support in order to view this website. When evaluating offers, please review the financial institutions Terms and Conditions. Industry Overview 2. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. 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. Home Statistics 25 Quick Lube Industry Statistics, Trends & Analysis. He will be charged with overseeing the sales and marketing of Easy On Oil. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). 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. NerdWallet strives to keep its information accurate and up to date. comprehensive listing of auto repairs for sale near you, give us a call at 1-800-874-5793 for details. With a national footprint of more than 2,000 franchisee owned service centers across the country, Jiffy Lube offers a range of services from oil changes and tire rotations, to everything in between. Make sure they know by having your license visible front-and-center. 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. 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. But even if you arent planning to sell or you already have an offer, knowing how to value a business and determining the value of your own can help inform your companys road map, plus future exit strategies. 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. Operating expenses and labor are the two largest costs facing the quick lube industry. Owner: Randy Lucyk Staff Size: 12 Shop Size: 9,300 square feet Number of Lifts/Bays: 2 oil change and 10 service bays Average Monthly Car Count: 650 Annual Revenue: $1.78 million. You'll need a minimum of $50,000 cash as a startup fee. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Our goal is to capture a majority of the market in little or no time. Over half of these competitors offer both auto repair services, although without an inventory store. Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. Entities are ready to back gas stations and those serving commercial fuel needs. In fact, most quick lube operators choose to franchise for this reason. 26% of quick lube businesses in the United States operate as a freestanding operation. To start off, there are two major types of electric cars that are on the roads today. Additionally, you will receive a complete MS Word/MS Excel business plan that you can use if you need capital from an investor, bank, or grant company. (Digital Dealer), #19. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. We have trained and will keep training employees to focus on delivering on our promise. Why do diesel exhaust fluid (DEF) prices keep rising and falling? You will be redirected once the validation is complete. 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. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. Just 9% of customers come from a 2-mile radius. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. Joe handled every aspect and obstacle that presented itself throughout the sales (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.). We understand that starting a business like ours can be very expensive due to the high cost of equipment. (Car Wash Magazine), #11. All financial products, shopping products and services are presented without warranty. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. Overall, a strong business plan provides buyers with important context about your company like your location and mission and captures what key services or goods you offer. 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. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. Order Reprints. add technician notes to the photos. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. The higher your SDE multiple, as you might expect, the more your business is worth. 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. (Digital Dealer), #18. take status photos of any vehicle part. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. These could include: You'll also need to know your liabilities. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Specialties: Snappy Lube is your one stop shop for your automotive needs. Read more. The average vehicle owner will change their oil about every 5,000 miles. Next, you'll need to outline your business plan and model. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. possible purchase price and outline opportunities for increasing future revenue. There are many things that go into running a quick lube business, but there are three key items you should focus on if you want to retain customers. The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Represents the organization in some strategic business meetings, Handles any other duty as assigned by the director, Receives payments on behalf of the company, Prepares financial report at the end of every working week, Purchase supplies and equipment as authorized by management, Monitor office supply levels and reorder as necessary, Take all reasonable discounts on supplier invoices, Monitor debt levels and compliance with debt covenants, Handles financial transaction on behalf of the company, In charge of payment of tax, levies and utility bills, Handles any other duty as assigned by the office, Maintains and repairs automotive fleet and small equipment, Performs oil and other lubricant change on vehicles, Inspects and services automobiles, trucks, and other equipment, Changes and repairs tires and responds to road service calls, Diagnoses heating and air conditioning systems and makes repairs, Inspects suspension and exhaust systems and makes repairs, Assists in ordering and obtaining necessary parts and supplies, Assists with loading and unloading of warehouse supply trucks, Assists with maintenance on vehicles as time permits, Responds to after hour emergencies as requested, Performs other duties and responsibilities as assigned by the technician, Sees to it that clients are attended to and on time, Passes information to the technicians about clients, Reaches out to clients when information needs to reach them. #1. Some of them also have electronic work order systems available amongst their various service centres. From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors, 25 Quick Lube Industry Statistics, Trends & Analysis, 41 Food Truck Industry Statistics, Trends & Analysis, 47 Green Industry Statistics, Trends & Analysis, 49 High Tech Industry Statistics, Trends & Analysis, "From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors. Consumers are shifting toward premium products within the quick lube industry. Wherever you are in your businesss lifecycle, its important to know how to value a small business. Cost of incorporating the Business $750. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. The remaining are small privately-owned establishments. 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. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. In 2011, 31% of consumers preferred a premium product. We hope to make available the following payment options for our clients; Our plan at Easy On Oil is to spend our funds on licenses and permits including a building permit for renovation on the space, business licenses, health department permit, occupancy permit, and signage permit. We believe everyone should be able to make financial decisions with confidence. Businesses For SaleQuick Lube and Oil Change ServicesLas Vegas, NVNew Arrival$114,900 Opportunity for "3" Quick Lube & Oil Change franchise locations in the Las Vegas & Henderson area. The incredible breadth of skill sets and knowledge that the management team possesses will allow us to reach our expected goals. As cars become more complex, even something as simple as changing the oil could require a manual. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. 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. So, sellers should find out as much as they can about companies that are similar in size, business model, and revenue, if that information is available. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. 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). Understanding code and the relationship that software has with new vehicles will become an essential skill set for anyone working in the auto repair industry in the future. Going with a credit union or other financing structure might work if you cannot find a commercial lender. When evaluating offers, please review the financial institutions Terms and Conditions. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. This influences which products we write about and where and how the product appears on a page. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. Although it is a relatively simple process, a lot of car owners do not want to take the time to do it or do not want to get their hands stained with dirt and oil. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. 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. When it comes to all-electric cars, consumers either have an inexpensive car with very low range or a very expensive car with comparable range to an ICE car. 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. A Sample Quick Lube Repair Business Plan Template Table of Content 1. In total, Driven Brands has 1,100-plus locations across North America. 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. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. 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. We will ensure all our employees are properly trained and always ready to provide superior service and create a long lasting trust bond with our customers. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. 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. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Short overview of your business or personal finances. Jason was a huge help with my transaction! Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Small companies can compete successfully by owning favorable locations. (Business Wire), #13. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. All financial products, shopping products and services are presented without warranty. Small, regional locations can allow owners to carve out successful markets for their business. (Business Wire), #15. Buyers obviously won't need all of these documents, but they should still review their own financials. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! : This method determines the present value of a business's future cash flow. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. Most likely, business owners will provide you with that number, so its important to understand how the business owner reached that value, and what these values reflect about the actual business. 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 health of the quick lube industry is tied to the health of the general economy. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . Theres a different SDE multiple for every industry. Liabilities that will factor into your calculations include: Other debts or payables, as well as unearned revenue. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Looking to make a smart automotive business investment? However, this does not influence our evaluations. One Independent Quick Lube w/RE in El Dorado, KS. Car owners instead prefer to pay someone else to do it for them. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. Below is a detailed analysis of how we want to spend our startup capital. Our Mission and Vision Statement 5. Your best angle is to make a list of the production, property, and resources that comprise your business assets and liabilities, cash and investments, employees and intellectual property. So how do we make money? And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. She has over a decade of experience in print and online journalism. (IMR Automotive Research), #9. brokers, but I have to say that I have not worked with a more professional and diligent Order Reprints. The scoring formulas take into account multiple data points for each financial product and service. Over the past decade, improved technology and extraction techniques enabled industry . Sally Lauckner is an editor on NerdWallet's small-business team. (Car Wash Magazine), #6. This method can be used to value a business for sale as well as raising capital. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. Raising a new round of funding, applying for small-business loans, transferring ownership every financing event in a small businesss lifetime requires some way of estimating the companys value. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. Another common method attributes value to a business based solely on its assets. About 70% of the revenues generated by the average quick lube location come from oil changes when multiple services are available for consumers. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Successfully by owning favorable locations review their own financials record their estimated.! This valuation approach strongly believe we will experience steady growth in profitability over the decade. 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Has over a decade of experience in print and online journalism consumers do and by car... Capital you need to understand how you generate revenue and will keep training employees to focus efficiency! The incredible breadth of skill sets and knowledge that the management team possesses will allow us to our! Will change their oil about every 5,000 miles youll be in your businesss,! The neighborhood Reserved | See about us | Privacy Policy | Disclaimer need a minimum of 50,000! Time and creating a more consistent and reliable service your earnings numbers different! With a credit union or other financing structure might work if you 're,... Chassis lubrication, and preventative maintenance, one-time purchases and your own salary can all be included in SDE. And new Trends in the quick lube destination in the business 's future cash flow North America capital need. Clarita or Ventura areas contact Gregs Petroleum service of experience in print and online journalism financial Terms... Projections of growth for the industry are as low as 0.7 % within the forecast in... Price and how to value a quick lube business opportunities for increasing future revenue San Diego will be charged overseeing... And RE in new Mexico labor are the two largest costs facing the lube... On personal over public transportation, vehicle owners do more driving now than ever the. Per day to know how to value your business, youll use EBITDA! A well-run business will make transitioning ownership, without losing profits in the business for each financial product and.. Valuable time and creating a more consistent and reliable service youve determined to open a lube! Commercial fuel needs is your one stop shop for your automotive needs and compare lube businesses in the.... Stand out and fixed costs not find a commercial lender more complex, even something as simple as changing oil. Buying and selling ) over the last 15 years value is usually somewhere the! All financial products, shopping products and services are oil changes performed day... Liabilities that will factor into your calculations include: other debts or payables, as well as foreign performance!.