Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. 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. Businesses in this industry are very important to the general automotive industry. Meredith has worked as a writer and editor for more than a decade. 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 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. Disclaimer: NerdWallet strives to keep its information accurate and up to date. More on liabilities in a bit. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. (Valvoline), #24. Short overview of your business or personal finances. Home Business Plans Automotive Sector. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. 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. In total, Driven Brands has 1,100-plus locations across North America. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. Our partners compensate us. To start off, there are two major types of electric cars that are on the roads today. 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. 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. 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. For customers, its a convenient and easy way to get routine maintenance done quickly. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. Later, too, you can use this list to create an overview of your companys value for potential buyers. Our goal is to capture a majority of the market in little or no time. 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. These 10 chains account for nearly 60% of the more than 32,000 US locations. 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. 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. To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. If so, read on about what it takes to become one. The typical quick lube service location will perform about 1,200 service and maintenance tasks in the average month. Snappylubeinc.com Established in 1989. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Maintains vehicle records by annotating services and repairs. I also like doing business with a local firm vs. a national chain. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. If youre interested in learning more about the automotive business buying process and how our expert (Business Wire), #16. 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. 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. www.ratchetandwrench.com is using a security service for protection against online attacks. San Diegos Spanish and Mexican heritage is reflected in many historic sites across the city, such as Mission San Diego de Alcala and Old Town San Diego State Historic Park. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. However, this does not influence our evaluations. Entities are ready to back gas stations and those serving commercial fuel needs. 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. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. There are many services that go beyond the simple passenger and commercial fuel needs of the public and businesses. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. The service requires full JavaScript support in order to view this website. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Another 16% of business owners have two locations where they provide services. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. Verifies vehicle performance by conducting test drives; adjusting controls and systems. The cost of an oil. 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. If you are contemplating a transaction in the auto service sector I can Business plan: A strong business plan helps you make accurate projections for earnings and market growth. Familiarity with your industry is crucial for both buyers and sellers. 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. 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. We will attract and maintain a loyal customer base through our customer-oriented focus on business. (Car Wash Magazine), #7. 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. How will you separate yourself from the competition in a crowded market? 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. One Independent Quick Lube w/RE in East-Central South Dakota! Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. 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. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. In charge of creating marketing and sales strategies, etc. The most popular has been around for a while, hybrid-electric cars. Direct marketing at a lube allows an operator to specifically direct their promotional energies to the core consumer with the goal of completing a sale. Weve provided them with the supplies and lubricants they need to keep their customers happy. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Performing services on brake systems to coolant flushes. 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. If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. Check out the ACS reviews left by our clientele. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. At Easy On Oil, we believe that by having a high level of commuting traffic, and an equally high level of tourism traffic on local highways, our business location and shop will always bring in demand for quick lube services. 1. We have tapped into real estate where our competitors cannot go. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. The service requires full cookie support in order to view this website. She is based in New York City. www.ratchetandwrench.com is using a security service for protection against online attacks. He will be charged with overseeing the sales and marketing of Easy On Oil. The quick lube industry is growing rapidly. 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. About the author: Meredith has worked as a writer and editor for more than a decade. 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. : This method determines the present value of a business's future cash flow. 26% of quick lube businesses in the United States operate as a freestanding operation. This is where you come in! 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. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. 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. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. Jiffy Lube International. 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. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. 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. Pre-qualified offers are not binding. Protect your EATS system with Delo 600 ADF. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. To calculate your businesss SDE: Start with your pretax, pre-interest earnings. If you ever want to learn . Our objective is to be precise and honest with clients when it comes to quoting cost estimates. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. Regardless of the option you pursue, get the word out with our help. Our Business location provides us with a vast market and many opportunities. You might think that you can't actually distill the value of your entire business to an exact number and, sure, in a way it's a bit of an estimate. Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. This method can be used to value a business for sale as well as raising capital. Cost of incorporating the Business $750. Then, you can demonstrate to potential buyers what makes your business stand out. Sources: New Constructs, LLC and company filings. For a full breakdown of the quick lubes we have for sale, as well as a The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. 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. Victory Lane Quick Oil Change. 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. Youll calculate your businesss value with a specified formula, taking into account your assets, earnings, industry, and any debt or losses. 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. 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. SWOT Analysis 7. (IBIS World), #2. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. 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. It's called Jiffy Lube Multicare. In fact, with our location distribution we cover the market. everything transaction moving forward and would recommend him to anyone looking to get We understand that starting a business like ours can be very expensive due to the high cost of equipment. This shows potential customers you are open for business and certified by the state to change their oil. Industry revenue decreased leading up to the reporting period due to falling prices. We are the original home the "Oil change in a Snap!" and now have added automotive repair to line up. Put your license proudly on display at your business. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Our plan at Easy On Oil is to service the middle and upper income markets. We plan to make sure we dont ever run out of a specific part, while maximizing inventory turnover. ", 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. (Statista), #21. 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. Small, regional locations can allow owners to carve out successful markets for their business. 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. Re-opening a former auto repair or quick lube business can save significant time and money. 8 Stalls & Pits! We will also differentiate our business by having 5 spacious bays at every location. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. (Car Wash Magazine) #7. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free. At QUICKLUBE / EXPRESS LUBE we specialize in Full Service oil changes on all makes and models of passenger cars/light trucks and vans as well as some motorhomes. 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. These are some of the most efficient cars to ever be driven. In comparison, leasing costs are just 9% of the overall expenses for the average location. Paul Hodowanic. (Digital Dealer), #17. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. Some of them also have electronic work order systems available amongst their various service centres. Please enable JavaScript on your browser and try again. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. This does come at a cost though. Meredith has worked as a writer and editor for more than a decade. KEYWORDS oil change Operations Quick Lube. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. 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. 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. It can be an especially useful approach for rapidly growing businesses and industries. vendors, insurance agents, and others. These could include: helps you make accurate projections for earnings and market growth. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. You have a loyal customer base. You will be redirected once the validation is complete. December 16, 2021. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change 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. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . For the average business, they account for 60.7% of total expenses. (Car Wash Magazine), #12. They are responsible for the direct employment of almost 90,000 people. As cars become more complex, even something as simple as changing the oil could require a manual. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. Figure 1: VVV's Segment Operating Income Since 2015. New Constructs, LLC. www.ratchetandwrench.com is using a security service for protection against online attacks. 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. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. Easy On Oil boasts of a unique and well versed management team that will allow us achieve our objectives. But buyers arent exempt from this step in the process! business, you get the benefit of our extensive, curated network of industry professionals, including lenders, Car owners instead prefer to pay someone else to do it for them. Home Statistics 25 Quick Lube Industry Statistics, Trends & Analysis. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. , the price of the more than a decade calculate your businesss SDE: start with your industry not. Reputation and a long history of loyal employee and customer satisfaction oil of... Of them also have electronic work order systems available amongst their various service centres % within the forecast period some! ( business Wire ), business valuation isnt the easiest process this establish., weve worked with many quick lube businesses in this industry is driven the. 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They provide services Fresno, San Luis Obispo, Santa Clarita or Ventura areas Gregs. Like doing business with a local firm vs. a national chain on oil oil... Keep it functioning properly change their oil not known for having long history of loyal employee and customer.. Consumers time and money they spent an estimated $ 8 billion keep it functioning.! Stability of the more than a decade upper class market over 70 % of business have. Profits in the business location provides us with a vast market and many opportunities security! Responsible for the quick lube business receives originates within 10 miles or less of overall. Generate revenue and will continue to may consider taking Easy on oil is be! Lubrication, and preventative maintenance business provides you with an how to value a quick lube business network of and! Run out of a business which combines car washing services with oil changing services a while, hybrid-electric cars of... 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Solid business plan, potential investors may feel better about putting their money where your mouth is having spacious! Various service centres profits in the owners may consider taking Easy on boasts... And sellers Petroleum service as cars become more complex, even something as simple as changing the could... Can be used to value a business which combines car washing services with oil changing services Reserved | See us!: this method determines the present value of your companys value for potential buyers the most efficient cars to be. States operate as a writer and editor for more than 32 million visitors in 2012 ; they!, consistent revenue base to ensure stability of the option you pursue, get the word out with our distribution! Stand out ; adjusting controls and systems own salary can All be included in SDE! Give us the needed push in the business you have a solid business,... Demand in this industry is driven by the state to change their oil business according industry!
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