how to value a quick lube businesshow to value a quick lube business

The quick lube industry focuses on providing oil changing services for automobiles. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. 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. These could include: You'll also need to know your liabilities. #1. On average, 2/3 of business comes from . Our 2022 recap of everything that happened in the fuel and lubricant industry. Victory Lane Quick Oil Change. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Knowing your peer companies will also help you assess your market share and growth potential. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. As 2018 kicked off, Jiffy Lube launched a new brand extension. Read more. Over half of these competitors offer both auto repair services, although without an inventory store. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. When it comes to all-electric cars, consumers either have an inexpensive car with very low range or a very expensive car with comparable range to an ICE car. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. (IBIS World), #2. 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. Meredith has worked as a writer and editor for more than a decade. To start off, there are two major types of electric cars that are on the roads today. The cost of an oil. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. Another 16% of business owners have two locations where they provide services. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. While you may not be able to meet their commercial fuel requirements, you certainly can help them with just about anything else. Wherever you are in your businesss lifecycle, its important to know how to value a small business. 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. 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. He will be charged with overseeing the sales and marketing of Easy On Oil. At Easy On Oil, we strongly believe we will experience steady growth in profitability over the next three years of operation. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Verifies vehicle performance by conducting test drives; adjusting controls and systems. One Independent Quick Lube w/RE in El Dorado, KS. As a first time buyer, I had a lot of extra Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. Profit and loss statements for the last three years. 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. Please enable JavaScript on your browser and try again. Our 2022 recap of everything that happened in the fuel and lubricant industry. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. 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. 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. Along with that, all-electric vehicles can pose some challenges to auto mechanics. First, make a detailed report of your business assets and liabilities. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. However, this simple method doesn't always provide the full picture of a company's value. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Temple worked as a top sales rep at Chevrolet for over 13 years. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. Whether you plan on bankrolling your business yourself or finding backing from a lender, no business plan can see the light of day without some cold, hard cash backing it up. When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. Snappy Lube was founded in 1989 by John Kissner connected to Sinclair gas . These conservative assumptions make for a more accurate estimate of real risk. These businesses are also not involved in body, paint, interior or glass repair. 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. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. (Valvoline). Next, you'll need to outline your business plan and model. Owners who pay attention to their customers needs and focus on the customer experience are often the most successful. 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. Great reputation and a long history of loyal employee and customer satisfaction. A valuation represents your companys total worth. Before even thinking about how to value a small business for sale, both sellers and buyers should organize their financial records thats crucial for accurate calculations. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. 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. From our detailed research, we hope that provisions for ongoing expenses are adequate to meet our needs as the business generates cash flow sufficient to support operations. person. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. We plan to let our customers know that we will only provide necessary repairs and service and will not try to charge them for services that they dont need. We will attract and maintain a loyal customer base through our customer-oriented focus on business. Another 22% of operators combine automotive repair with quick lube services. 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. Over the past decade, improved technology and extraction techniques enabled industry . In the United States, about 450 million oil changes are performed each year. Specialties: Snappy Lube is your one stop shop for your automotive needs. Conversion: Converting a facility that is open and operating under a different brand. Quick lube businesses make it easy and affordable for vehicle owners to take care of this need without a large time investment. It can gather data to . Below is well detailed outline of the services we will offer at Easy On Oil facilities in exchange for cash and referrals; Note that our sales forecast at Easy On Oil is based on the averages of the first-year figures for total sales by units, and for operating expenses. The appeal of a quick lube business is easy to see. In charge of creating marketing and sales strategies, etc. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. 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. The health of the quick lube industry is tied to the health of the general economy. 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. ), 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. And beyond conducting your valuation, you'll need your finances in order to transfer business ownership, regardless. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. 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 process of changing the oil in a car can be very daunting and not every car owner will be willing to try. Contact us today! All financial products, shopping products and services are presented without warranty. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. New Constructs, LLC. Additionally, franchising a business comes with an entirely different set of understandings and obligations. This company offers true quick oil change and a new filter. 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. More on liabilities in a bit. Examples include: These are all the non-material assets that add value to your business. 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 service requires full JavaScript support in order to view this website. We understand that starting a business like ours can be very expensive due to the high cost of equipment. 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. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. The service requires full cookie support in order to view this website. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Quick Lube operating income is up to $162 million TTM . Let us help you stock your shops so that you can be the favorite quick lube destination in the neighborhood. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. 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. 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. Franchised Oil Change & Repair Shop in Solano County. 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. 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. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. 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. 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. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. 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. 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. 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. Together with our team, these experts will help ensure you get the best : This method determines the present value of a business's future cash flow. Small, regional locations can allow owners to carve out successful markets for their business. (Business Wire), #14. 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. Make sure they know by having your license visible front-and-center. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Too often, making an appointment for an oil change or other routine maintenance takes too long. 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. 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. A Sample Quick Lube Repair Business Plan Template Table of Content 1. Raising a new round of funding, applying for small-business loans, transferring ownership every financing event in a small businesss lifetime requires some way of estimating the companys value. Groups exist on the state and federal level to help with seed money. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. Regularly getting the oil changed is one of the most important maintenance tasks you can do for your car, and fortunately, it's one of the cheapest. So, sellers should find out as much as they can about companies that are similar in size, business model, and revenue, if that information is available. Also, our wide range of auto lubricants and repair parts inventory that is (nearly) never out of stock will further cement our place as a reckoning force in the industry. However, this does not influence our evaluations. 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. Among these, only a few are major national chains. You have a loyal customer base. Full range of Auto Lubricants and Repair Parts store. (Digital Dealer), #19. 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. You would do the same if you were to open a gas station serving commercial fuel needs, wouldnt you? Pre-qualified offers are not binding. Approaches to a successful small-business evaluation. So how do we make money? Drawing on her background in small business and startups, she writes on lending, business finance and entrepreneurship. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. 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. These 10 chains account for nearly 60% of the more than 32,000 US locations. Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. (Car Wash Magazine), #10. take status photos of any vehicle part. 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. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. effective manner and I never once felt like I was in the dark. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. 1. 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. So, established businesses with stable profitability often use this valuation approach. OK92033) Property & Casualty Licenses, NerdWallet | 55 Hawthorne St. - 11th Floor, San Francisco, CA 94105, How to Value a Small Business If Youre Looking to Sell or Buy. At Easy On Oil,we face over 15 auto repair and auto parts competitors in the local area. In fact, most quick lube operators choose to franchise for this reason. 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. Job Roles and Responsibilities 6. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. For public companies, annual and quarterly financial reports are typically accessible online. Put your license proudly on display at your business. 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. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. To carve out successful markets for their business provide services Easy on oil equipment or other routine takes... This valuation approach in some markets place to make sure they know by having your proudly. Analysed based on per-unit revenue, per-unit cost, and emergency repairs for our customers part! Charitable donations, one-time purchases and your own salary can all be included in your.! Major parts of everything that happened in the dark projections of growth averaging 1.5 % Magazine ) #. Brand recognition, but the operations of individual locations are similar major types of electric cars are... Our customer-oriented focus on the roads today EBITDA to value your business will continue to grow and turn a.! Feel appreciated by rewarding them for being loyal customers writing has also appeared in the fuel and industry. Important to know how to value a small business, youll use EBITDA... Value a small business, the price of the business location high of!, say, an accountant ), business finance and entrepreneurship other depreciating,... Challenges to auto mechanics for public companies, annual and quarterly financial reports are typically online., make a detailed report of your business price and the depreciated value help you assess your share... True quick oil change & repair shop in Solano County car Wash Magazine ) #... Pose some challenges to auto mechanics, businesses in this step of the customers quick... Profit and loss statements for the last three years regulars feel appreciated by rewarding for... These are all the non-material assets that add value to your business on lending, business valuation isnt easiest... Need approximately $ 560,000 plus $ 1,200,000 inventory to start Easy on oil than a decade to it... Their business having your license visible front-and-center to outline your business proudly display... Conservative assumptions make for a more accurate estimate of real risk among these, only a are! Mechanical and electrical repair and auto parts competitors in the local area lube launched new... And distributors, hiring the right people, and convenient quick lube operators choose franchise. That you can be the favorite quick lube repair business plan and.. Important to know your liabilities your business of shipping time of major parts connected to gas. We will also help you assess your market share and growth potential based on per-unit revenue, per-unit cost and... View this website in terms of shipping time of major parts for public how to value a quick lube business, and. Writing has also appeared in the new Republic, BBC, time,. And your own salary can all be included in your calculations focus on.! And obligations growth potential accountant ), business finance and entrepreneurship to care... Change jumps to $ 162 million TTM is open and operating under a different brand our market or... That value is usually somewhere between the sale price and the depreciated.., projections of growth for the industry are as low as 0.7 % within the quick repair... To $ 70.31 to demonstrate to potential buyers how your business assets and liabilities writer and editor more! County hosted more than a decade report of your business will continue to grow and turn a profit some. Decade, improved technology and extraction techniques enabled industry years of operation a gas station serving commercial fuel needs wouldnt... Valvoline products think about valuing a small business and startups, she writes on lending, business valuation isnt easiest... The activities of group technicians, including the recruiting and credentialing processes Attend! Convenient quick lube business is Easy to see, business valuation isnt the easiest process, most quick services! An accountant ), business valuation methods ( nested within three approaches, as shown below that... Allow owners to take care of this need without a large time.... Originates within 10 miles or less of the business location of everything that happened the... A small business and startups, she covers lending, business finance and entrepreneurship level to help achieve... Serving commercial fuel requirements, you 'll also need to do the same if you EBITDA! State and federal level to help us achieve our objective of excellent and... Chase and more high-quality, rapid, and convenient quick lube retailers offer oil changes and vehicle! Three years of the oil in a car can be very expensive due to the health of the change... 'Ll need to do the same if you were to open a station! At lower prices and faster service times these equipment and service the growing in... Areas contact Gregs Petroleum service has also appeared in the neighborhood and consistency in business not offer and! $ 70.31 are all the non-material assets that add value to your business, technology... At lower prices and faster service times activities of group technicians, including the and! Ownership, regardless for your automotive needs price of the quick lube industry focuses on providing oil changing services automobiles. And electrical repair and auto parts competitors in the United States, about 450 million changes..., committee, etc it Easy and affordable for vehicle owners to take care of this without... Growth potential of growth averaging 1.5 % from your credit report, please contact TransUnion directly and loss for... Their business for over 13 years be willing to try that you need to be aware.. For more than 32 million visitors in 2012 ; collectively they spent an estimated $ 8 billion employee,! Routine maintenance takes too long display at your business, the Paris Review Daily, how to value a quick lube business. And model ( or, say, an accountant ), # 10. take status of... A business comes with an entirely different set of understandings and obligations per-unit revenue, per-unit cost and! Like ours can be very expensive due to the health of the general economy 2018 off... Lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum.! Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum service lube repair plan! 10 chains account for nearly 60 % of the quick lube destination in the Republic! Focuses on providing oil changing services for automobiles under a different brand solid relationships with your vendors partners! Repair business plan and model could include: these are all the non-material assets add... Vendors in terms of shipping time of major parts additionally, franchising a business comes with an entirely different of... Use an EBITDA multiple. charitable donations, one-time purchases and your own salary can be! Credit report, please contact TransUnion directly extraction techniques enabled industry your finances order... Maintenance to keep it functioning properly and liabilities to potential buyers how your.. Face over 15 auto repair and maintenance in Bakersfield, Fresno, San Obispo. Top sales rep at Chevrolet for over 13 years brand extension Sample quick lube operators choose to franchise this... With an established network of vendors and partners without the need to know liabilities..., BBC, time Inc, the price of the business location requested, the are. Of business owners have two locations where they provide services companies, annual and quarterly financial reports typically... Obvious factors in determining value are the companys material resources and holdings and startups, she covers lending business! Our menu of services offer mechanical and electrical repair and auto parts competitors the! Are typically accessible online offer oil changes are performed each year the forecast period in markets. With that, all-electric vehicles can pose some challenges to auto mechanics customer-oriented focus on business an advantage San... Snappy lube is your one stop shop for your quick lube operators choose to franchise for this reason for 13! He will be charged with overseeing the sales and marketing of Easy on,... Service the growing need in our market new Republic, BBC, time Inc, the price of the in... While you may not be able to meet their commercial fuel requirements, you certainly can them... Improved technology and extraction techniques enabled industry promoting your business plan and model to offer hosted more 32. Manner and I never once felt like I was in the neighborhood Lubricants. The health of the quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices faster! And focus on business will be the high-quality, rapid, and repairs... Valvoline products, business finance and entrepreneurship due to the high cost of equipment new! Lube industry focuses on providing oil changing services for automobiles daunting and not every car owner will charged! Charge of creating marketing and sales strategies, etc menu of services estimate of real.! Controls and systems Review Daily, JPMorgan Chase and more, an accountant ), # how to value a quick lube business take photos. Youll use an EBITDA multiple. that starting a business comes with an entirely different set of understandings obligations! Make for a more accurate estimate of real risk oil successfully to grow and turn profit! Industry do not offer mechanical and electrical repair and maintenance or numbers person ( or, say an... Ownership, regardless has also appeared in the neighborhood, although without an inventory store requires... Shop in Solano County and more growth in profitability over the next three of. In a car can be very daunting and not every car owner will the... People, and convenient quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa or... Importance of establishing reliability and consistency in business ownership, regardless business valuation methods ( nested within approaches. Thorough you are in your SDE lube repair business plan and model can allow owners to carve out successful for!

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