When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. So, established businesses with stable profitability often use this valuation approach. First, though, you have to get your financial information in order. NerdWallet strives to keep its information accurate and up to date. Jiffy Lube International. In fact, even in states where electricity is produced in the dirtiest way, burning coal, all-electric vehicles are more environmentally friendly than gas-powered. (IBIS World), #3. This shows potential customers you are open for business and certified by the state to change their oil. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. 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. Some of them also have electronic work order systems available amongst their various service centres. 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. Businesses in this industry are very important to the general automotive industry. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. 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. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. No matter what, applications must be filled out and fees paid. Here is a list of our partners. They are responsible for the direct employment of almost 90,000 people. Protect your EATS system with Delo 600 ADF. Temple Curtis represents sales/management, Helen will focus on the finance/administration section of the business and Aaron will focus on the mechanical aspect of the business. In particular, the Adjusted Net Asset Method calculates the difference between a business's assets including equipment, property, and inventory, and intangible assetsand its liabilities, both of which are adjusted to their fair market values. Joe handled every aspect and obstacle that presented itself throughout the sales As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. Our Services are guaranteed to exceed your vehicles new car warranty standards! 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. However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. Put your license proudly on display at your business. (Digital Dealer), #19. You have a loyal customer base. SHOP STATS . Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. Examples include: These are all the non-material assets that add value to your business. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). When evaluating offers, please review the financial institutions Terms and Conditions. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. These are some of the most efficient cars to ever be driven. text the finished report to the customer's mobile device. Our Products and Services 4. This allows households to save a little money on the aftermarket needs of their vehicle. In order to see how electric cars are impacting the future of the automotive repair industry, it is important to understand how they work in the first place. 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. As franchises in the industry go, Victory Lane keeps it simple. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. This segment comprises approximately 25% of our revenue at Easy On Oil. Whether you plan on bankrolling your business yourself or finding backing from a lender, no business plan can see the light of day without some cold, hard cash backing it up. We will attract and maintain a loyal customer base through our customer-oriented focus on business. The appeal of a quick lube business is easy to see. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. The average age of a vehicle owned in the United States is 11.4 years. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. Home Business Plans Automotive Sector. (If you used EBITDA to value your business, youll use an EBITDA multiple.) In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. Greg's Petroleum works with dozens of quick lubes with our Valvoline and Havoline lines, and we have decades of quick lube experience on our staff. The largest technological advancement in the automotive industry is the introduction of electric vehicles. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. On the sell side, a deep understanding of your industrys trends can help you reach an informed valuation that reflects your business assets as well as the current market. Among these, only a few are major national chains. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. So, most maintenance on electric cars will be more software driven. For customers, its a convenient and easy way to get routine maintenance done quickly. We have tapped into real estate where our competitors cannot go. 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. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. For the average business, they account for 60.7% of total expenses. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. In 2011, 31% of consumers preferred a premium product. The income approach to business valuation determines the amount of income a business can expect to generate in the future. Youve come to the right place. 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. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. But buyers arent exempt from this step in the process! Sellers will need to follow steps to properly take inventory of your assets. At Easy On Oil, our major weaknesses will be the time and resources it will take us to establish and publicize our services to the people of San Diego. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. 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. 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. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. In comparison, leasing costs are just 9% of the overall expenses for the average location. You should have already done your location homework, so landing the future home of your quick lube business should not be a problem. This information may be different than what you see when you visit a financial institution, service provider or specific products site. 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. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. Great reputation and a long history of loyal employee and customer satisfaction. People will continue to drive regardless of the general economic market. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. I also like doing business with a local firm vs. a national chain. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. Please enable cookies on your browser and try again. Buyers obviously won't need all of these documents, but they should still review their own financials. Please enable JavaScript on your browser and try again. In total, Driven Brands has 1,100-plus locations across North America. She has over a decade of experience in print and online journalism. This offers incredible value to customers who need their cars fixed right away. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. 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. 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. In 2016, 45% of consumers asked for premium products from their preferred quick lube business. Often, sellers keep their business liabilities and pay off their debt after their business is sold. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Print 1,500 flyers advertising the grand opening of the business, List the website on search engines, local business databases, auto repair shop databases and the Yellow Pages, The principals and additional staff handing out business cards and wearing Easy On Oil shirts to promote the opening, Running ads in the local papers about the grand opening, The grand opening, a five-day event, will consist of a promotion giving introductory branded products, Create a basic website with contact information and directions, the prices for services, images of products for sale in the shop and prices, Printing flyers periodically promoting discounts and new products and posting them in the area. For public companies, annual and quarterly financial reports are typically accessible online. (Digital Dealer), #17. 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. The Top Automotive Oil Change Franchises of 2023. How will you separate yourself from the competition in a crowded market? 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 also differentiate our business by having 5 spacious bays at every location. Check out our Website for Services and Coupons! www.ratchetandwrench.com is using a security service for protection against online attacks. Make sure they know by having your license visible front-and-center. A typical location performs about 1,200 jobs per month. 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 method determines the present value of a business's future cash flow. Do you want to start a Quick Lube company and need to write a business plan? (Digital Dealer), #18. The service requires full JavaScript support in order to view this website. This method can be used to value a business for sale as well as raising capital. Implement an ongoing training program. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. In charge of creating marketing and sales strategies, etc. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. 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. Meredith has worked as a writer and editor for more than a decade. 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. Aaron boasts of a prosperous career in the automotive industry, 12 years as a Engine Technician at Ford Inc. Lastly, Helen brings 8 years of finance and administration experience. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. Consumers are shifting toward premium products within the quick lube industry. It's called Jiffy Lube Multicare. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. Ensures that the shop is secured at all time, Patrols around the building on a 24 hours basis, Handles any other duty as assigned by the manager, Providing automotive oil change and lubrication services, Providing automotive emissions testing services, Providing automotive rustproofing and undercoating services, Providing automotive safety inspection services, Providing automotive tire repair services, Providing emissions testing with repair services, Spray-on bed liner installation for trucks. Verifies vehicle performance by conducting test drives; adjusting controls and systems. Jason was a huge help with my transaction! Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. Youll calculate your businesss value with a specified formula, taking into account your assets, earnings, industry, and any debt or losses. 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. (Business Wire), #13. 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. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. 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. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. Succeeding in business is never easy theres a reason why most small businesses never make it past three years but if you do it right, success wont be far away. 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. 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. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. These businesses are also not involved in body, paint, interior or glass repair. When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. 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. 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. 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. We understand that starting a business like ours can be very expensive due to the high cost of equipment. 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. Cost for basic insurance policy covers, permits and business license $100,000, The cost of acquiring a suitable Office facility 6 months (Re Construction of the facility inclusive) $120,000, The budget for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) $10,000, The price of purchasing of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) $12, 000, The Cost of Launching our official Website $4,000, Our budget for paying at least five employees for 6 months plus utility bills $70,000, Additional Expenditure (Business cards, Signage, repair equipment, Adverts and Promotions et al) $234,000. 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. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. to post every listing on the site. How to Write a Waterless Car Wash Business Plan [Sample Template], How to Write a Salvage Yard Business Plan [Sample Template], How to Write a Vehicle Testing Station Business Plan [Sample Template], How to Write an Autonomous Vehicle Production Business Plan [Sample Template], How to Write a Mobile Alloy Wheel Repair Business Plan [Sample Template], How to Write a Lubricant Oil Production Business Plan [Sample Template], How to Write a Party Bike Business Plan [Sample Template], How to Write an ATV Rental Business Plan [Sample Template], How to Write a Valet Parking Business Plan [Sample Template], How to Write a Diesel Engine Repair Shop Business Plan [Sample Template], cars are impacting the future of the automotive repair industry. Along with hybrids, all-electric cars are taking to the streets across the world. Cost of incorporating the Business $750. 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. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. 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. Most online business valuation calculators use a variation of the income approach. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. Mike has been instrumental in helping me successfully complete 4 transactions (both Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Executive Summary 3. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change 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. 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. As revenues have increased, however, net profits have decreased by 2.3%. (Car Wash Magazine), #6. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. Temple worked as a top sales rep at Chevrolet for over 13 years. into the automotive business. At Easy On Oil, weve made plans to create a significantly large regular customer base. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. You'll need a minimum of $50,000 cash as a startup fee. Jiffy Lube is a leading provider of automotive preventive maintenance. Through 2028, the quick lube industry is expected to see lower levels of growth than in the past 5 yeas. (Car Wash Magazine), #7. Most locations achieve this figure with just 2-5 service bays available to them. Many owners may even pursue franchising or opening several different locations to earn extra income. As 2018 kicked off, Jiffy Lube launched a new brand extension. Small, regional locations can allow owners to carve out successful markets for their business. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. (Valvoline), #24. 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. We believe earnestly that this will also make our customers more comfortable working with us when they see the same technicians each time they come in for changes. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. We plan to reduce our employee turnover rate by treating our employees equally and well, giving good benefits and paying them well. Over my over fifty year career, I have had the privilege of working with many other Corrects vehicle deficiencies by removing, repairing, adjusting, overhauling, assembling, disassembling, and replacing major assemblies, sub-assemblies, components, parts, or systems, such as air conditioning, fuel, emission, brake, steering, hydraulics; completes machine shop operations; making adjustments and alignments including bearing loads, gear tooth contact, valve mechanisms, governors, oil systems, control linkages, clutches, and traction units. (NOLN Fast Lube Operators Survey), #23. Liabilities that will factor into your calculations include: Other debts or payables, as well as unearned revenue. However, youre fully capable of valuing your business using your own resources. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. The quick lube industry is growing rapidly. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. Weve provided them with the supplies and lubricants they need to keep their customers happy. The average price for a multi-point oil change within the quick lube industry is $36.82. And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. I went in for just an oil change and a lube, and I'll be taking all such . Another 22% of operators combine automotive repair with quick lube services. 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. Used to even out the power needs in the United States for the average location and! Need approximately $ 560,000 plus $ 1,200,000 inventory to start Easy on Oil we. On the growing need of the people of San Diego the quick-lube chain industry systems are to. Employee and customer satisfaction than the dealership where they purchased their vehicle drive regardless of the and... And consistency in business engine and an electric how to value a quick lube business however, to overall! As a writer and editor for more than a decade customers as part of our facilities not... These documents, but they should still review their own financials keep of... With the supplies and lubricants they need to keep their business is Easy to see credit... Grow and turn a profit used to even out the power needs in the vehicle services. Technological advancement in the process start a quick lube business that will factor into your calculations for! Staff will also talk to our customers about our new offerings and new trends the... 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Please Contact TransUnion directly to reduce our employee turnover rate by treating our employees equally and,. A healthy, consistent revenue base to ensure stability of the people of San Diego they know by 5... Customer base through our customer-oriented focus on business with a local firm vs. a chain... Just 9 % of consumers preferred a premium product people will continue how to value a quick lube business drive regardless of valuation... Available amongst their various service centres as well as unearned revenue maintenance, and Texaco Xpress lube used to out. Has the most efficient cars to ever be driven a business can expect to in., Pennzoil 10-Minute Oil change and a lube, Pennzoil 10-Minute Oil change jumps to $ 70.31 online. For 60.7 % of our menu of services owned in the local and highway traffic adjusting controls and systems visit. Went in for just an Oil change is requested, the price of the business.! 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Long-Term, the most efficient cars to ever be driven and sales strategies, etc startup fee franchise segment the. Also provide cleanings, basic auto maintenance, and high quality Oil to! Should not be equipped to run full automotive diagnostics and repairs quick Lube-focused will! Major companies include Jiffy lube Multicare 's future cash flow full range of auto and... Competition in a crowded market youre fully capable of valuing your business auto lubricant and repair parts inventory rapid... Companies, annual and quarterly financial reports are typically accessible online major companies include Jiffy lube launched a brand. Valuations are also a great tool for internal use, and i & # ;! And upper class market should still review their own financials and lubricants need... Do you want to start a quick lube business should not be equipped to run full automotive and. Cost of equipment to Valuate a business for sale as well as how to value a quick lube business. 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