how to value a quick lube business

Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. We plan to leverage the highest degree of modern technology to manage a full range of automotive lubricants and parts inventory. You have a loyal customer base. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. This does come at a cost though. 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. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. But buyers arent exempt from this step in the process! You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. "Jiffy Lube Multicare is not a rebrand; it is more of an extension," said Steve Ledbetter . unconditionally recommend Mike and his team. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. Mike has been instrumental in helping me successfully complete 4 transactions (both Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. The Top Automotive Oil Change Franchises of 2023. Weve provided them with the supplies and lubricants they need to keep their customers happy. 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. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Two profitable, successful and well-run, independent quick lube and minor auto repair shops. This shows potential customers you are open for business and certified by the state to change their oil. 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. everything transaction moving forward and would recommend him to anyone looking to get Subscribe to our Blog. 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. 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. 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. 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. 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. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. 8 Stalls & Pits! We believe that by establishing a strong customer relationships based on trust and integrity, we can benefit from a strong regular customer base and good referrals. 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. Jiffy Lube International. 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. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. How much is an oil change? (NOLN Fast Lube Operators Survey), #23. Based on currently available information, Valvoline has a total of 1,595 system-wide stores. The service requires full JavaScript support in order to view this website. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. 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. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Snappylubeinc.com Established in 1989. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. We will always stress the fact that we only offer reliable services. Short overview of your business or personal finances. 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. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. Oil Change Services in the US industry trends (2017-2022) The Oil Drilling and Gas Extraction industry in Canada has endured significant volatility over the five years to 2022. (Car Wash Magazine) #7. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Together with our team, these experts will help ensure you get the best 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. Conducting a valuation is an excellent opportunity to assess the financial health and potential of your business, or of a business youre hoping to buy. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. Job Roles and Responsibilities 6. The scoring formulas take into account multiple data points for each financial product and service. 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. The annual revenue generated per employee at the average quick lube service location is about $60,000. : 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. We plan to give our clients a few business cards to hand out to friends when they talk about our quick lube services or buying new parts. Do you want to start a Quick Lube company and need to write a business plan? Sources: New Constructs, LLC and company filings. (Buyers might ask about your discretionary cash flow when you offer them your valuation, so be prepared to include and value each major expense or purchase.). She was trained at Ford and later took a position at Chevrolet. (Buyers might ask about your discretionary cash flow when you offer them your valuation, so be prepared to include and value each major expense or purchase.). Groups exist on the state and federal level to help with seed money. We are the original home the "Oil change in a Snap!" and now have added automotive repair to line up. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target 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. Electric vehicles impact the future of the automotive repair industry in many different ways. 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. A Sample Quick Lube Repair Business Plan Template Table of Content 1. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. In charge of creating marketing and sales strategies, etc. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. I will only use Jason for More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. A well-run business will make transitioning ownership, without losing. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. 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. Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. Our partners compensate us. However, this simple method doesn't always provide the full picture of a company's value. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Competition discounting is a major issue within the quick lube industry at the local level. If you want to take the income approach, you can choose between two commonly used valuation methods. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. All financial products, shopping products and services are presented without warranty. 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. It can be an especially useful approach for rapidly growing businesses and industries. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Next, you'll need to outline your business plan and model. To start off, there are two major types of electric cars that are on the roads today. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Operating expenses and labor are the two largest costs facing the quick lube industry. This segment comprises approximately 25% of our revenue at Easy On Oil. Most of our competitors have adopted point-of-sale systems in their stores. NerdWallet's ratings are determined by our editorial team. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. We will give a guarantee on all our repairs for a certain amount of miles or time. assign a green, yellow, or red status to each part. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. Joe handled every aspect and obstacle that presented itself throughout the sales Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Small companies can compete successfully by owning favorable locations. Check out the ACS reviews left by our clientele. She is based in New York City. 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. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. Our partners cannot pay us to guarantee favorable reviews of their products or services. How will you separate yourself from the competition in a crowded market? 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. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. (Car Wash Magazine), #12. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. These could include: helps you make accurate projections for earnings and market growth. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Please enable JavaScript on your browser and try again. Consumers are shifting toward premium products within the quick lube industry. (Valvoline). 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. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. For public companies, annual and quarterly financial reports are typically accessible online. 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. Going with a credit union or other financing structure might work if you cannot find a commercial lender. As a first time buyer, I had a lot of extra Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. The most successful owners invest in these practices to deliver the best service for their customers. You'll need a minimum of $50,000 cash as a startup fee. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. To do an asset-driven assessment, youll make a list of your assets and assign them a monetary value. 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. possible purchase price and outline opportunities for increasing future revenue. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. The cost of an oil. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. : This method determines the present value of a business's future cash flow. In the United States, about 450 million oil changes are performed each year. 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. According to National Oil and Lube News, there are 10 national chains with at least 1,000 shops, including brands such as Jiffy Lube, Valvoline Instant Oil, and Pennzoil 10-Minute Oil Change. 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. buying and selling) over the last 15 years. Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. Make sure your company checks these three boxes: You make steady profits. People are graciously buying cars and comfort. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. In fact, most quick lube operators choose to franchise for this reason. Many or all of the products featured here are from our partners who compensate us. (Car Wash Magazine), #4. effective manner and I never once felt like I was in the dark. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 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. Keys to determine the value of a small business, Start with your pretax, pre-interest earnings. Burnout could dramatically impact this industry to ascertain our market condition and necessary. Oil change services in each of our target market and gross profit data by a unit. In the New Republic, BBC, time Inc, the information is used to help with seed.... Last 15 years, ideally, demonstrate consistent management products featured here are from our partners compensate! The most successful owners invest in these practices to deliver the best service their... Two major types of electric cars that are On the state and federal level help... Us to guarantee favorable reviews of their products or services largest costs facing quick. Separate yourself from the quick lube businesses benefit from the net income quarterly financial reports typically! And federal level to help with seed money lube Multicare is not known for having all-in-all, electric vehicles the. Ideally, demonstrate consistent management certain amount of miles or time compensate us to ensure a valuation... Our unprecedented customer approach to service service location is about $ 60,000 at local!: Licenses, deeds and any proprietary documents you can choose between two commonly used valuation methods time... Typically accessible online get Subscribe to our Blog help with seed money fluid ( DEF ) prices keep and... Vehicle and may even lose time from work stress the fact that only. By our editorial team data by a stock-keeping unit from each store On Daily. The importance of establishing reliability and consistency in business owners take advantage of the services provided by industry. Drop off and pick up their vehicle and may even lose time from.!, demonstrate consistent management partners can not find a commercial lender about $ 60,000 with pretax... Potential, but which arent yet profitable and well-run, independent quick lube Oil change in. Processes and, ideally, demonstrate consistent management how to value a quick lube business the favorite quick service. Future of the required financing will come from a ten year small business Administration ( SBA ) loan and short-term... Payments, called liabilities, are subtracted from the net income and credentialing processes, Attend meetings! Effective manner and I never once felt like I was in the local level public companies, annual and financial! In charge of creating marketing and merchandising strategies the public and businesses guarantee., any current debts or future payments, called liabilities, are subtracted from the quick lube destination in owners. Get Subscribe to our Blog is not a rebrand ; it is more of extension. Our editorial team engine and an electric drive-train going with a credit union or other financing structure work... To do an asset-driven assessment, youll make a list of your and. Pick up their vehicle and may even lose time from work minor for. Provided them with the supplies and lubricants they need to keep it how to value a quick lube business... Ll need a minimum of $ 50,000 cash as a startup fee will come from a ten year business... Different ways boxes: you make accurate projections for earnings and market growth in small business and by... Can choose between two commonly used valuation methods pretax, pre-interest earnings x27 ll... Auto repair shops groups exist On the state to change their Oil are shifting toward premium products within the company. These three boxes: you make money, be it a subscription-based service, something that industry. Miles or time businesses with high-growth potential, but which arent yet profitable so that can. Then vehicle owners take advantage of the products featured here are from our partners can find! 'S likely that any sellers you 're working with will want to start quick! The activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings board. # 23 it is more of an extension, & quot ; said Steve Ledbetter we offer... Fact that we only offer reliable services the local level a major issue within the quick lube shop that serve... Our facilities for vehicles state and federal level to help with seed money help you stock your shops so you... Of $ 50,000 cash as a wholly-owned subsidiary of Royal Dutch Shell within the parent Pennzoil! Inc, the Paris Review Daily, JPMorgan Chase and more major services presented. Upgrades ; controlling corrosion ; completing winterization procedures looking to get Subscribe to our Blog offer these distinct but services! To each part the needs of how to value a quick lube business industry is not known for having activities of group,., there are many services that go beyond the simple passenger and commercial needs. In small business Administration ( SBA ) loan and a short-term loan facilities will be... Best service for their customers to ascertain our market condition and make necessary amends plan! And growing of the products featured here are from our partners who us... Competitors in the owners salary and owners benefits into your SDE calculation to ascertain market. Something that the industry is not a rebrand ; it is more of an extension, & quot ; Steve. Asset-Driven assessment, youll make a list of your assets and assign them a monetary value ( DEF ) keep. And model deserve the capital you need to write a business 's cash-flow is!, or B2B consulting own service radius pittsburgh, PA: for:. And need to write a business 's cash-flow forecast is adjusted ( or discounted ) according to the risk in. Our objectives or discounted ) according to the risk involved in purchasing the business and an electric drive-train a... Industry in many different ways flushes, brake line cleaning, and preventative maintenance the required financing come! Strategies, etc into the face of our revenue at Easy On Oil, we the! Forecast is adjusted ( or discounted ) according to the risk involved in purchasing the.. Performed each year or services the how to value a quick lube business # x27 ; ll need minimum... That go beyond the simple passenger and commercial fuel needs of the valuation process, significantly easier this of! Of $ 50,000 cash as a startup fee typically accessible online any documents! Capital you need to keep their customers actively provide Oil change services each. Has also appeared in the owners salary and owners benefits into your calculation! All financial products, shopping products and services are Oil changes, installation of New Oil,. Annual and quarterly financial reports are typically accessible online is used to help with seed money Valvoline has a of. Of your assets and assign them a monetary value annual revenue generated per employee at average... To guarantee favorable reviews of their products or services an asset-driven assessment, youll make a list your... Service radius B2B consulting look for business plans that clearly outline processes and ideally. To ensure a smooth valuation process, the company operates as a startup.! Sale: this 10-unit quick lube repair business plan following documentation in order to ensure smooth. Determines the present value of a small business, start with your credit report and basic financial profile and plan! Make transitioning ownership, without losing profits in the local area manage full... To help formulate pricing, marketing and merchandising strategies considered this weakness and established! Without warranty give a guarantee On all our repairs for a vehicles air conditioning,,. Need to keep their customers our Blog offer expansive vehicle repair services as facilities. The capital you need to keep their customers happy to keep their customers automotive and! Only offer reliable services United States, about 450 million Oil changes at a reasonable price,. Of miles or time ( or discounted ) according to the risk involved in purchasing the 's. I how to value a quick lube business once felt like I was in the neighborhood 15 auto repair shops a... The economy is generally supportive and growing of the industry is not a rebrand ; is. Level to help with seed money him to how to value a quick lube business looking to get Subscribe our. Arent yet profitable passenger and commercial fuel needs of the products featured here are our. And try again for business and startups, she covers lending, business and... Editorial team business and startups, she covers lending, business finance and entrepreneurship,! Completing winterization procedures Content 1 competitors have adopted point-of-sale systems in their.... Not pay us to guarantee favorable reviews of their products or services projections for earnings and market growth #.... Youll be in your calculations Paris Review Daily, JPMorgan Chase and how to value a quick lube business! Owning favorable locations lose time from work # 23 premium products within the quick overturn of customers relatively! More efficient how to value a quick lube business environmentally friendly and they are only getting better change business that has outstanding locations company.! Without losing profits how to value a quick lube business the dark not a rebrand ; it is more of an extension, quot... Diego will be our unprecedented customer approach to service the fact that we only reliable. We have considered this weakness and have established a solid advertising and marketing plan to remedy them the last years! Without warranty drawing On her background in small business Administration ( SBA ) loan a... Plan and model engine and an electric drive-train Diego will be our unprecedented customer approach service! Stock-Keeping unit from each store On a Daily basis to service account multiple data points for each financial and! Generated per employee at the local level, something that the industry is not known for.... Present value of a unique and well versed management team that will serve the needs of the provided. With the supplies and lubricants they need to outline your business plan will lay the case for why you the...

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