However, due to the confidentiality agreements stipulated by some of our current sellers, were not able Its crucial that prospective buyers understand SDE, too. 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 average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. Verifies vehicle performance by conducting test drives; adjusting controls and systems. Easy On Oil is an exciting business opportunity that addresses the unmet need of having a spacious quick lube facility that also has a complete automotive parts store. Performing services on brake systems to coolant flushes. But buyers arent exempt from this step in the process! 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. When evaluating offers, please review the financial institutions Terms and Conditions. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. Protect your EATS system with Delo 600 ADF. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. This segment comprises approximately 25% of our revenue at Easy On Oil. 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. Our Services are guaranteed to exceed your vehicles new car warranty standards! 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. 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. 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. 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. Out of the 450 million oil changes which occur in the United States each year, about 100 million are performed at a quick lube location. 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. She has over a decade of experience in print and online journalism. 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. LOCATION, LOCATION, LOCATION. 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. Subscribe to our Blog. 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. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. 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. Joe handled every aspect and obstacle that presented itself throughout the sales If you are contemplating a transaction in the auto service sector I can (IBIS World), #3. This offers incredible value to customers who need their cars fixed right away. The average price for a multi-point oil change within the quick lube industry is $36.82. At Easy On Oil, we will differentiate ourselves by not only offering oil change or other automotive maintenance services, but by also providing customers with a stocked lubricant and parts store. everything transaction moving forward and would recommend him to anyone looking to get Too often, making an appointment for an oil change or other routine maintenance takes too long. Our Products and Services 4. The quick lube industry focuses on providing oil changing services for automobiles. Familiarity with your industry is crucial for both buyers and sellers. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! Determines vehicle condition by conducting inspections and identifying worn and damaged parts. As a result, the need for reliable and convenient quick lube store has grown rapidly in California. Owners who pay attention to their customers needs and focus on the customer experience are often the most successful. The average age of a vehicle owned in the United States is 11.4 years. 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. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. 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. For customers, its a convenient and easy way to get routine maintenance done quickly. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. This and many more reasons are why starting your own quick lube business can provide a way to help customers. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. If so, read on about what it takes to become one. The largest technological advancement in the automotive industry is the introduction of electric vehicles. www.ratchetandwrench.com is using a security service for protection against online attacks. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. (Digital Dealer), #17. 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. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. In 2011, 31% of consumers preferred a premium product. person. Here, business assets include anything that adds value to your company. However, youre fully capable of valuing your business using your own resources. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. This is why several other methods exist. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. 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. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . NerdWallet strives to keep its information accurate and up to date. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. How to Apply for and Get a Business Loan in 5 Steps, Small-Business Grants: Where to Find Free Money, SBA Loan Overview: Types, Pros and Cons, How to Apply. vendors, insurance agents, and others. The service requires full cookie support in order to view this website. Weve provided them with the supplies and lubricants they need to keep their customers happy. Make sure your company checks these three boxes: You make steady profits. First, though, you have to get your financial information in order. 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. 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. 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. (Car Wash Magazine), #6. However, this does not influence our evaluations. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. 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. 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. Approaches to a successful small-business evaluation. 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. In comparison, leasing costs are just 9% of the overall expenses for the average location. 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. 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. (Car Wash Magazine), #12. 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. Our plan at Easy On Oil is to service the middle and upper income markets. 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. Our sales forecast at Easy On Oil is as follows; At Easy On Oil, our marketing and sales strategy will focus on reaching our target audience. 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. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. You will be redirected once the validation is complete. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. Re-opening a former auto repair or quick lube business can save significant time and money. (Business Wire), #15. (Valvoline). Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. Here is a list of our partners. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. (IMR Automotive Research), #9. ", 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. 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. Check out the ACS reviews left by our clientele. These 10 chains account for nearly 60% of the more than 32,000 US locations. In any of those cases, buyers will be interested in the individual value of your investments or equipment. assign a green, yellow, or red status to each part. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. Short overview of your business or personal finances. However, this simple method doesn't always provide the full picture of a company's value. As 2018 kicked off, Jiffy Lube launched a new brand extension. In charge of creating marketing and sales strategies, etc. Long wait for services and parts wont b entertained at East On Oil as we strive to offer the best service and product in our market. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Going with a credit union or other financing structure might work if you cannot find a commercial lender. Read more. We plan is to grow sales through word-of-mouth. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. We understand that starting a business like ours can be very expensive due to the high cost of equipment. New Constructs, LLC. When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. 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. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. Snappylubeinc.com Established in 1989. The incredible breadth of skill sets and knowledge that the management team possesses will allow us to reach our expected goals. Our partners cannot pay us to guarantee favorable reviews of their products or services. 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. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Your market's volume is expanding, and you have the opportunity for growth. (Digital Dealer), #20. This company offers true quick oil change and a new filter. Small companies can compete successfully by owning favorable locations. From our detailed research, we hope that provisions for ongoing expenses are adequate to meet our needs as the business generates cash flow sufficient to support operations. One common method used to value small businesses is based on seller's discretionary earnings (SDE). 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. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. effective manner and I never once felt like I was in the dark. To start off, there are two major types of electric cars that are on the roads today. www.ratchetandwrench.com is using a security service for protection against online attacks. On top of that, he communicated everything in an Keys to determine the value of a small business, Start with your pretax, pre-interest earnings. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. into the automotive business. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. On average, 2/3 of business comes from . Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. 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.