The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. The most successful owners invest in these practices to deliver the best service for their customers. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. Generating Funding/Start up Capital for Easy On Oil. 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. Contact us today! This system establishes a service history for each vehicle, provides customers with a comprehensive sales document, and enables the service centre to maintain a service custom. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. ", 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. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. vendors, insurance agents, and others. (Car Wash Magazine) #7. You have a loyal customer base. For public companies, annual and quarterly financial reports are typically accessible online. Victory Lane Quick Oil Change. 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. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . If a synthetic oil change is requested, the price of the oil change jumps to $70.31. We plan to make sure we dont ever run out of a specific part, while maximizing inventory turnover. Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. If you ever want to learn . (Car Wash Magazine), #5. 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. KEYWORDS oil change Operations Quick Lube. And beyond conducting your valuation, you'll need your finances in order to transfer business ownership, regardless. Most online business valuation calculators use a variation of the income approach. Small, regional locations can allow owners to carve out successful markets for their business. Even though quick lube locations are seeing a reduction in the number of cars being serviced each day, the number of oil changes being performed is rising. Together with our team, these experts will help ensure you get the best process as a consummate professional. NerdWallet strives to keep its information accurate and up to date. 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. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. The work done here is every bit as good or better than the nationals, the price seems at least a bit better, and I had a better experience overall. (Digital Dealer), #20. Youve come to the right place. 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. It is part of the San DiegoTijuana conurbation, the second-largest trans-border agglomeration between the U.S. and a bordering country after DetroitWindsor, with a population of 4,922,723 people. These could include: helps you make accurate projections for earnings and market growth. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Sources: New Constructs, LLC and company filings. (If you used EBITDA to value your business, youll use an EBITDA multiple.) (IMR Automotive Research), #9. 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. Figure 1: VVV's Segment Operating Income Since 2015. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. Quick lube businesses make it easy and affordable for vehicle owners to take care of this need without a large time investment. We believe everyone should be able to make financial decisions with confidence. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. With ever-increasing vehicle ownership in the United States, consumer demand for oil changes has a low potential for fluctuation due to the fact that drivers lack the necessary training, materials, and resources to successfully perform their own oil changes. 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. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. The service requires full JavaScript support in order to view this website. When evaluating offers, please review the financial institutions Terms and Conditions. Particularly if this is your first company, or if you run a family-owned and operated business, take care to approach valuation as objectively as possible to come to an accurate number. 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. Our partners cannot pay us to guarantee favorable reviews of their products or services. 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. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. Our Mission and Vision Statement 5. (Car Wash Magazine), #4. 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). 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. She has over a decade of experience in print and online journalism. 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 a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. 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. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. However, youre fully capable of valuing your business using your own resources. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! As a result, the need for reliable and convenient quick lube store has grown rapidly in California. So, established businesses with stable profitability often use this valuation approach. He will be charged with overseeing the sales and marketing of Easy On Oil. 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. Make sure your company checks these three boxes: You make steady profits. This process is automatic. Regularly getting the oil changed is one of the most important maintenance tasks you can do for your car, and fortunately, it's one of the cheapest. Profit and loss statements for the last three years. In fact, most quick lube operators choose to franchise for this reason. Buyers obviously won't need all of these documents, but they should still review their own financials. Another 16% of business owners have two locations where they provide services. As a first time buyer, I had a lot of extra We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. Small companies can compete successfully by owning favorable locations. 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. Jiffy Lube International. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. Executive Summary 3. This company offers true quick oil change and a new filter. Mike has been instrumental in helping me successfully complete 4 transactions (both brokers, but I have to say that I have not worked with a more professional and diligent You'll need a minimum of $50,000 cash as a startup fee. Verifies vehicle performance by conducting test drives; adjusting controls and systems. The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. We will always stress the fact that we only offer reliable services. Before even thinking about how to value a small business for sale, both sellers and buyers should organize their financial records thats crucial for accurate calculations. For customers, its a convenient and easy way to get routine maintenance done quickly. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. 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. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Another common method attributes value to a business based solely on its assets. Additionally, franchising a business comes with an entirely different set of understandings and obligations. 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. 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. So, most maintenance on electric cars will be more software driven. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. Often, sellers keep their business liabilities and pay off their debt after their business is sold. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. On top of that, he communicated everything in an Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. This segment comprises approximately 25% of our revenue at Easy On Oil. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. At Easy On Oil, weve made plans to create a significantly large regular customer base. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. 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. Another 22% of operators combine automotive repair with quick lube services. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Approaches to a successful small-business evaluation.
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