Executive Summary 3. Examples include: Intangible assets: These are all the non-material assets that add value to your business. (Digital Dealer), #20. Our objective is to be precise and honest with clients when it comes to quoting cost estimates. 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. If YES, here is a sample Quick Lube business plan template & feasibility report. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. Why do diesel exhaust fluid (DEF) prices keep rising and falling? At Easy On Oil, weve made plans to create a significantly large regular customer base. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. (Thats why this number is subtracted from the SDE in valuation calculations.) However, this does not influence our evaluations. 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. Maintains vehicle records by annotating services and repairs. Then, you can demonstrate to potential buyers what makes your business stand out. To reach our local customer base, we will employ a marketing manager. 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. 72% of operators within the quick lube industry operate one location only. First, make a detailed report of your business assets and liabilities. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. Figure 1: VVV's Segment Operating Income Since 2015. Our partners compensate us. If you are contemplating a transaction in the auto service sector I can KEYWORDS oil change Operations Quick Lube. to post every listing on the site. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. She has over a decade of experience in print and online journalism. It can be an especially useful approach for rapidly growing businesses and industries. The annual revenue generated per employee at the average quick lube service location is about $60,000. 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. The visitor industry provides employment for more than 160,000 people. 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. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. take status photos of any vehicle part. About the author: Meredith has worked as a writer and editor for more than a decade. everything transaction moving forward and would recommend him to anyone looking to get (Valvoline). These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. 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. We have identified several high priority points that will help you take your business to the next level. (Valvoline), #24. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. 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. Your particular businesss SDE multiple will vary based on market volatility, where your business is located, your companys size, assets and how much risk is involved in transferring ownership. 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. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. SHOP STATS . This approach will specifically help you determine an appropriate selling or purchase price based on your local market. It must also be done for a quick lube business. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. Another 22% of operators combine automotive repair with quick lube services. 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. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. This method can be used to value a business for sale as well as raising capital. Cost of incorporating the Business $750. www.ratchetandwrench.com is using a security service for protection against online attacks. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. It's called Jiffy Lube Multicare. possible purchase price and outline opportunities for increasing future revenue. Our Business location provides us with a vast market and many opportunities. In fact, with our location distribution we cover the market. One Independent Quick Lube w/RE in El Dorado, KS. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. 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 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. 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. 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. 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. Does becoming a quick lube business owner sound good to you? Along with that, all-electric vehicles can pose some challenges to auto mechanics. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. 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. Note that each of the three co-owners will invest an equal amount. He will be charged with overseeing the sales and marketing of Easy On Oil. 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. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. In total, Driven Brands has 1,100-plus locations across North America. Also our product prices will be gotten after the appropriate retail is determined to make sure that the shelf price represents a value to the consumer and the retailer has a 50% margin. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. All financial products, shopping products and services are presented without warranty. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. 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. Jiffy Lube is a leading provider of automotive preventive maintenance. Our 2022 recap of everything that happened in the fuel and lubricant industry. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. 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. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. With an estimated population of 1,425,976 as of July 1, 2018, San Diego is the eighth-largest city in the united states and second-largest in California. Next, you'll need to outline your business plan and model. (Car Wash Magazine), #10. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. Regardless of the option you pursue, get the word out with our help. Over the past decade, improved technology and extraction techniques enabled industry . (Car Wash Magazine), #8. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. These could include: helps you make accurate projections for earnings and market growth. 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. 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. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. 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. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. We believe everyone should be able to make financial decisions with confidence. Easy On Oil will be managed by its three founding partners. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Franchised Oil Change & Repair Shop in Solano County. As cars become more complex, even something as simple as changing the oil could require a manual. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. 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. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. 1. 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. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Protect your EATS system with Delo 600 ADF. Do you want to start a Quick Lube company and need to write a business plan? Approaches to a successful small-business evaluation. No matter what, applications must be filled out and fees paid. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. People are graciously buying cars and comfort. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. Internet companies or buyers interested in the tech sector can use online directories like Crunchbase and platforms like AngelList, which provide information about startups, funding, investors, and more. 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. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. 8 Stalls & Pits! www.ratchetandwrench.com is using a security service for protection against online attacks. Another 16% of business owners have two locations where they provide services. His expertise in getting deals done is Maintaining the website with new trends and advises. 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. As 2018 kicked off, Jiffy Lube launched a new brand extension. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Like EBITDA, business owners calculate SDE to determine the true value of their business for a new owner, so your SDE will include expenses like the income you report to the IRS, non-cash expenses whatever revenue your business actually generates. To start off, there are two major types of electric cars that are on the roads today. The average vehicle owner will change their oil about every 5,000 miles. Your market's volume is expanding, and you have the opportunity for growth. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. Franchise Quick Lube, Car Wash, and RE in New Mexico! The scoring formulas take into account multiple data points for each financial product and service. (IMR Automotive Research), #9. Quick Lube operating income is up to $162 million TTM . LOCATION, LOCATION, LOCATION. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. The average price for a multi-point oil change within the quick lube industry is $36.82. 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. As franchises in the industry go, Victory Lane keeps it simple. Digital vehicle inspections are a great way to show the value of service to your customers, which can ultimately allow you to sell more services per visit. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. (Car Wash Magazine) #7. Another common method attributes value to a business based solely on its assets. The quick lube industry is growing rapidly. The average price for a multi-point oil change within the quick lube industry is $36.82. 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. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. 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. 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. text the finished report to the customer's mobile device. Often, the site is good, but the former business either lost their lease, got tired of the business, or was operating without a National brand behind them. Home Statistics 25 Quick Lube Industry Statistics, Trends & Analysis. We will give a guarantee on all our repairs for a certain amount of miles or time. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Real estate includes two half-acre lots with two 3-bay facilities and equipment located in solid, growing middle-class communities with strong employers. : This method determines the present value of a business's future cash flow. 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. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. If youre interested in learning more about the automotive business buying process and how our expert 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. However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. 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. (Car Wash Magazine), #12. 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. A good rule of thumb is to estimate how much a piece of equipment would sell for today, and use that number. Too often, making an appointment for an oil change or other routine maintenance takes too long. Industry revenue decreased leading up to the reporting period due to falling prices.
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