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. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Here is a list of our partners and here's how we make money. A valuation represents your companys total worth. 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 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. Over my over fifty year career, I have had the privilege of working with many other Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. 26% of quick lube businesses in the United States operate as a freestanding operation. Verifies vehicle performance by conducting test drives; adjusting controls and systems. 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. Short overview of your business or personal finances. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. 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. Businesses in this industry are very important to the general automotive industry. Make sure your company checks these three boxes: You make steady profits. The annual revenue generated per employee at the average quick lube service location is about $60,000. Over the past decade, improved technology and extraction techniques enabled industry . Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. Also, electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. Theres a different SDE multiple for every industry. The average vehicle owner will change their oil about every 5,000 miles. 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 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. 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. This method can be used to value a business for sale as well as raising capital. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. (Thats why this number is subtracted from the SDE in valuation calculations.) Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. 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. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. One common method used to value small businesses is based on seller's discretionary earnings (SDE). We plan to make sure we dont ever run out of a specific part, while maximizing inventory turnover. But where the discounted cash flow method accounts for more fluctuations in a business's financial future, the capitalization method assumes that calculations for a single period of time will continue in the future. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. 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. 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. 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. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! Protect your EATS system with Delo 600 ADF. 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. take status photos of any vehicle part. Our goal is to capture a majority of the market in little or no time. SHOP STATS . There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. And beyond conducting your valuation, you'll need your finances in order to transfer business ownership, regardless. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. 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. Typically, more than 70 percent of revenue is from oil changes. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. The profitability of individual companies depends on convenient location and good marketing. It can be an especially useful approach for rapidly growing businesses and industries. However, this does not influence our evaluations. vendors, insurance agents, and others. 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. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. (IBIS World), #3. Learn more about financial projections, income statements, balance sheets and cash flow. 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. In fact, most quick lube operators choose to franchise for this reason. 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. 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. The cost of an oil. Performing services on brake systems to coolant flushes. Please enable JavaScript on your browser and try again. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. text the finished report to the customer's mobile device. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. 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. Read more. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. As 2018 kicked off, Jiffy Lube launched a new brand extension. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. First, though, you have to get your financial information in order. One Independent Quick Lube w/RE in East-Central South Dakota! 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. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. everything transaction moving forward and would recommend him to anyone looking to get 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. If YES, here is a sample Quick Lube business plan template & feasibility report. 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. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Pre-qualified offers are not binding. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. We also plan to leverage an automotive service scheduling software program. We plan to leverage the highest degree of modern technology to manage a full range of automotive lubricants and parts inventory. It's called Jiffy Lube Multicare. assign a green, yellow, or red status to each part. Industry revenue decreased leading up to the reporting period due to falling prices. Sources: New Constructs, LLC and company filings. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. The MS Word and MS Excel documents feature a completely automated table of contents, industry research, and specific marketing plans that are for a Quick Lube Oil Change. Routine maintenance services like adjusting tire pressure, changing windshield wipers, replacing light bulbs, and topping off auto fluid levels are usually done in 10 minutes or less. All financial products, shopping products and services are presented without warranty. 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. Quick Lube operating income is up to $162 million TTM . 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. Do you want to start a Quick Lube company and need to write a business plan? So, most maintenance on electric cars will be more software driven. There are about 250 million vehicles on the road which will require services at some point that can be provided by a quick lube location. The quick lube industry is growing rapidly. The income approach to business valuation determines the amount of income a business can expect to generate in the future. 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. www.ratchetandwrench.com is using a security service for protection against online attacks. Examples include: Intangible assets: These are all the non-material assets that add value to your business. If youre interested in learning more about the automotive business buying process and how our expert These could include: helps you make accurate projections for earnings and market growth. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. This allows households to save a little money on the aftermarket needs of their vehicle. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. #1. Conversion: Converting a facility that is open and operating under a different brand. 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. Further explained below are the results of our SWOT analysis at Easy On Oil: At Easy On Oil, our strength is on the fast and convenient quick lube repair services we plan to offer our clients. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. Over half of these competitors offer both auto repair services, although without an inventory store. Order Reprints. 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. 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. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. We at Easy On Oil have analysed this and we will favorably compete by focusing on convenience and offering a high level of customer service. 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. Our plan at Easy On Oil is to service the middle and upper income markets. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. (Digital Dealer), #18. 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. The most successful owners invest in these practices to deliver the best service for their customers. 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. 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. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Another common method attributes value to a business based solely on its assets. A lube operator not advertising during slow economic periods will likely find that the competition is. This is why several other methods exist. Familiarity with your industry is crucial for both buyers and sellers. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Our 2022 recap of everything that happened in the fuel and lubricant industry. (Business Wire), #15. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. to post every listing on the site. Re-opening a former auto repair or quick lube business can save significant time and money. Our opinions are our own. Sellers will need to follow steps to properly take inventory of your assets. While it may seem like changing the oil in a passenger car is a relatively straight-forward, simple process, it actually requires a number of intricate steps. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. 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. As cars become more complex, even something as simple as changing the oil could require a manual. 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. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. The appeal of a quick lube business is easy to see. Along with that, all-electric vehicles can pose some challenges to auto mechanics. Maintains vehicle records by annotating services and repairs. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Another 22% of operators combine automotive repair with quick lube services. In any of those cases, buyers will be interested in the individual value of your investments or equipment. This information may be different than what you see when you visit a financial institution, service provider or specific products site. It must also be done for a quick lube business. 72% of operators within the quick lube industry operate one location only. She has over a decade of experience in print and online journalism. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. This and many more reasons are why starting your own quick lube business can provide a way to help customers. (Car Wash Magazine), #7. Jiffy Lube is a leading provider of automotive preventive maintenance. Every state has a different process when it comes to business licensing. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. 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. A Sample Quick Lube Repair Business Plan Template Table of Content 1. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. He will be charged with overseeing the sales and marketing of Easy On Oil. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. We have tapped into real estate where our competitors cannot go. 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. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. 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. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. 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