So, established businesses with stable profitability often use this valuation approach. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. 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. 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. So, most maintenance on electric cars will be more software driven. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Then, you can demonstrate to potential buyers what makes your business stand out. Conversion: Converting a facility that is open and operating under a different brand. The appeal of a quick lube business is easy to see. Meredith has worked as a writer and editor for more than a decade. This company offers true quick oil change and a new filter. 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Sample 1 Sample 2 Sample 3 Based on 6 documents 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. 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. 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. As 2018 kicked off, Jiffy Lube launched a new brand extension. Industry Overview 2. 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. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . Franchise Quick Lube, Car Wash, and RE in New Mexico! Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. Each uses a different aspect or variable of a business to calculate its numerical value either a businesss income, assets, or using market data on similar companies. (Digital Dealer), #18. 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. These could include: You'll also need to know your liabilities. However, youre fully capable of valuing your business using your own resources. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. 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. Maintaining the website with new trends and advises. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. 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. You'll need a minimum of $50,000 cash as a startup fee. (IHS Automotive), #22. To start off, there are two major types of electric cars that are on the roads today. Familiarity with your industry is crucial for both buyers and sellers. Overall, a strong business plan provides buyers with important context about your company like your location and mission and captures what key services or goods you offer. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! Some of them also have electronic work order systems available amongst their various service centres. 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. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. More on liabilities in a bit. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. Below is a detailed analysis of how we want to spend our startup capital. Pre-qualified offers are not binding. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. brokers, but I have to say that I have not worked with a more professional and diligent Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . However, due to the confidentiality agreements stipulated by some of our current sellers, were not able add technician notes to the photos. We will ensure all our employees are properly trained and always ready to provide superior service and create a long lasting trust bond with our customers. Typically, more than 70 percent of revenue is from oil changes. To reach our local customer base, we will employ a marketing manager. As you can deduce from its name, the market approach to valuing a business determines a companys value based on the purchases and sales of comparable companies within the same industry. Particularly if this is your first company, or if you run a family-owned and operated business, take care to approach valuation as objectively as possible to come to an accurate number. As technology advances, consumers are expecting fast, efficient, and high quality maintenance. The company would need to have sales decrease by more than 30% before we can be unable to satisfy our month to month financial obligations. How to Apply for and Get a Business Loan in 5 Steps, Small-Business Grants: Where to Find Free Money, SBA Loan Overview: Types, Pros and Cons, How to Apply. Through 2028, the quick lube industry is expected to see lower levels of growth than in the past 5 yeas. We hope to make available the following payment options for our clients; Our plan at Easy On Oil is to spend our funds on licenses and permits including a building permit for renovation on the space, business licenses, health department permit, occupancy permit, and signage permit. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. : 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. Mike has been instrumental in helping me successfully complete 4 transactions (both In the United States, about 450 million oil changes are performed each year. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. With Easy On Oil as a technologically savvy business with computerized monitoring of all automotive lubricant and repair parts inventory, we plan to make sure that parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. Often, sellers keep their business liabilities and pay off their debt after their business is sold. Meredith has worked as a writer and editor for more than a decade. Our Services are guaranteed to exceed your vehicles new car warranty standards! Too often, making an appointment for an oil change or other routine maintenance takes too long. Jiffy Lube International. Small, regional locations can allow owners to carve out successful markets for their business. About the author: Meredith has worked as a writer and editor for more than a decade. Note that each of the three co-owners will invest an equal amount. 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. Our partners compensate us. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Our sales forecast at Easy On Oil is as follows; At Easy On Oil, our marketing and sales strategy will focus on reaching our target audience. All financial products, shopping products and services are presented without warranty. 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. They are responsible for the direct employment of almost 90,000 people. (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.). The largest technological advancement in the automotive industry is the introduction of electric vehicles. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. A lube operator not advertising during slow economic periods will likely find that the competition is. Small companies can compete successfully by owning favorable locations. These are some of the most efficient cars to ever be driven. However, this simple method doesn't always provide the full picture of a company's value. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. The quick lube industry is growing rapidly. 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. As revenues have increased, however, net profits have decreased by 2.3%. Check out the ACS reviews left by our clientele. Industry revenue decreased leading up to the reporting period due to falling prices. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. Learn more about financial projections, income statements, balance sheets and cash flow. Our Products and Services 4. What often separates one lube shop from another is its creative marketing strategies. Victory Lane includes basic maintenance checks such as flushes and fills, antifreeze and wiper fluids. The parts department will support the service department by allowing the service department to turnaround jobs faster than the competition with all the needed parts in stock and on location. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. 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. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. 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. This influences which products we write about and where and how the product appears on a page. Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. (Car Wash Magazine), #6. Quick Lube has significant advantages over the 3 rd party retail model, including: Direct Customer Relationship: As noted above, Quick Lube lets Valvoline own the relationship with its consumers. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. 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. ), Monitor quality and appropriateness of services and care, Provide guidance and leadership for performance guidelines, Manage staffs relations and/or representation, Manages external research and coordinate all the internal sources of information to retain the organizations best customers and attract new ones, Models demographic information as it relates to those who need our services, In charge of promoting the companys image. Our 2022 recap of everything that happened in the fuel and lubricant industry. unconditionally recommend Mike and his team. 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. No matter what, applications must be filled out and fees paid. Paul Hodowanic. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. Next, you'll need to outline your business plan and model. take status photos of any vehicle part. Like EBITDA, business owners calculate SDE to determine the true value of their business for a new owner, so your SDE will include expenses like the income you report to the IRS, non-cash expenses whatever revenue your business actually generates. This offers incredible value to customers who need their cars fixed right away. (Digital Dealer), #20. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Make sure your company checks these three boxes: You make steady profits. Our partners cannot pay us to guarantee favorable reviews of their products or services. We plan to reduce our employee turnover rate by treating our employees equally and well, giving good benefits and paying them well. Order Reprints. Executive Summary 3. Most likely, business owners will provide you with that number, so its important to understand how the business owner reached that value, and what these values reflect about the actual business. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). At Easy On Oil, we understand the importance of establishing reliability and consistency in business. Over the past decade, improved technology and extraction techniques enabled industry . This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. One common method used to value small businesses is based on seller's discretionary earnings (SDE). Please enable JavaScript on your browser and try again. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. 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. Although this can be very hard to achieve if we have high employee turnover which can lead to inexperienced new workers who need to be guided in the business, which can take time. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Great reputation and a long history of loyal employee and customer satisfaction. For customers, its a convenient and easy way to get routine maintenance done quickly. The profitability of individual companies depends on convenient location and good marketing. Often, the site is good, but the former business either lost their lease, got tired of the business, or was operating without a National brand behind them. 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. SWOT Analysis 7. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. Keeps equipment available for use by completing preventive maintenance schedules; installing component and part upgrades; controlling corrosion; completing winterization procedures. 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. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. We understand that starting a business like ours can be very expensive due to the high cost of equipment. In charge of creating marketing and sales strategies, etc. A Sample Quick Lube Repair Business Plan Template Table of Content 1. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. 8 Stalls & Pits! (Car Wash Magazine) #7. As cars become more complex, even something as simple as changing the oil could require a manual. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. Temple worked as a top sales rep at Chevrolet for over 13 years. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. 32.9 oil changes to a more consistent and reliable service, basic auto maintenance, RE. Use an EBITDA multiple. as revenues have increased, however, net profits have by. Mechanical and electrical Repair and maintenance for their business liabilities and pay their. Value small businesses is based on your local market corrosion ; completing winterization procedures right. 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