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. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. It can be an especially useful approach for rapidly growing businesses and industries. The largest technological advancement in the automotive industry is the introduction of electric vehicles. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. person. These businesses are also not involved in body, paint, interior or glass repair. Jason was a huge help with my transaction! So, most maintenance on electric cars will be more software driven. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. Check out the ACS reviews left by our clientele. The income approach to business valuation determines the amount of income a business can expect to generate in the future. www.ratchetandwrench.com is using a security service for protection against online attacks. 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. But buyers arent exempt from this step in the process! Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. assign a green, yellow, or red status to each part. into the automotive business. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. Quick Lube operating income is up to $162 million TTM . 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. 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. The quick lube industry is growing rapidly. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. I also like doing business with a local firm vs. a national chain. Here's a quick example: If the present value of your current business earnings/excess compensation amounts to $500,000 and you select a discount for lack of marketability of 10%, $50,000 (10% x $500,000) will be subtracted, resulting in an estimated business value of $450,000. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. www.ratchetandwrench.com is using a security service for protection against online attacks. 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. Take 5 Oil Change is one of their fastest growing brands. Great reputation and a long history of loyal employee and customer satisfaction. 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. So, established businesses with stable profitability often use this valuation approach. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. When evaluating offers, please review the financial institutions Terms and Conditions. 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. A lube operator not advertising during slow economic periods will likely find that the competition is. Franchised Oil Change & Repair Shop in Solano County. About the author: Meredith has worked as a writer and editor for more than a decade. 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. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. 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. 1. 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. 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? 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. As a result, the need for reliable and convenient quick lube store has grown rapidly in California. So how do we make money? Check out our Website for Services and Coupons! According to reports, the industry is fragmented; the 50 biggest companies generate less than 40 percent of revenue. We believe everyone should be able to make financial decisions with confidence. We will also differentiate our business by having 5 spacious bays at every location. Based on 7 documents Quick Lube Business means the provision of services for changing oil, lubricants, antifreeze and other automotive fluids for passenger car and light commercial trucks and the provision of maintenance checks and related services. 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. If YES, here is a sample Quick Lube business plan template & feasibility report. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. Many owners may even pursue franchising or opening several different locations to earn extra income. (Business Wire), #15. 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. text the finished report to the customer's mobile device. In the United States, about 450 million oil changes are performed each year. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Although there will still be many different tasks to complete with your hands, we will grow and advance with this trend by employing the services of a software engineer in due time. The higher your SDE multiple, as you might expect, the more your business is worth. You have a loyal customer base. 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. Small companies can compete successfully by owning favorable locations. If so, read on about what it takes to become one. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. In fact, most quick lube operators choose to franchise for this reason. unconditionally recommend Mike and his team. 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. The quick lube business may thrive on customer turnover, but quality, efficient service is what brings customers back to their favorite quick lube shops again and again. No matter what, applications must be filled out and fees paid. (Digital Dealer), #18. We understand that starting a business like ours can be very expensive due to the high cost of equipment. Electric vehicles impact the future of the automotive repair industry in many different ways. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. This business is your one-stop shop for fast and friendly oil change & maintenance services. Temple worked as a top sales rep at Chevrolet for over 13 years. In fact, with our location distribution we cover the market. She is based in New York City. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. 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. Our 2022 recap of everything that happened in the fuel and lubricant industry. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. 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. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. This company offers true quick oil change and a new filter. Sources: New Constructs, LLC and company filings. (Car Wash Magazine), #11. Here is a list of our partners. A typical location performs about 1,200 jobs per month. 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. 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. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. 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. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. Businesses in this industry are very important to the general automotive industry. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. A good rule of thumb is to estimate how much a piece of equipment would sell for today, and use that number. 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. Short overview of your business or personal finances. In any of those cases, buyers will be interested in the individual value of your investments or equipment. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. NerdWallet strives to keep its information accurate and up to date. 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. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. Weve provided them with the supplies and lubricants they need to keep their customers happy. 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. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 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. Theres a different SDE multiple for every industry. The average age of a vehicle owned in the United States is 11.4 years. Why do diesel exhaust fluid (DEF) prices keep rising and falling? This approach works best for newer businesses with high-growth potential, but which arent yet profitable. Businesses in this industry change motor oil, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. 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. People are graciously buying cars and comfort. In charge of creating marketing and sales strategies, etc. 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. (Car Wash Magazine), #10. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. The appeal of a quick lube business is easy to see. The remaining are small privately-owned establishments. Most locations achieve this figure with just 2-5 service bays available to them. Easy On Oil will serve the San Diego, California market with four convenient locations and will grow into a business with excellent sales within 3 years. It can gather data to . Industry Overview 2. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. 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. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Discounted cash flow method: This method determines the present value of a business's future cash flow. Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. 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. This method can be used to value a business for sale as well as raising capital. Maintains vehicle records by annotating services and repairs. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. In fact, most quick lube operators choose to franchise for this reason. brokers, but I have to say that I have not worked with a more professional and diligent We plan to position ourselves to capitalize on the growing need of the middle and upper class market. Its crucial that prospective buyers understand SDE, too. A quick note on those tax returns: Remember that many purchases you reported as business expenses to the IRS like the cost of travel expenses, a personal vehicle and many other nonessential, non-recurring purchases should be added back to your earnings when calculating your SDE. 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. 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. In this industry are very important to the general automotive industry is introduction! 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Which arent yet profitable status to each part and record their estimated value yet.
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