Meredith has worked as a writer and editor for more than a decade. 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. At Easy On Oil, our mission is to provide fast, reliable, and cost effective oil change and lubrication services for vehicle owners in San Diego, California. Sources: New Constructs, LLC and company filings. For a full breakdown of the quick lubes we have for sale, as well as a Industry Overview 2. When only stand-alone quick lube locations are examined in the industry, about 5,000 firms currently operate in this space and produce revenues of about $5 billion annually. Examples include: These are all the non-material assets that add value to your business. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Order Reprints. This offers incredible value to customers who need their cars fixed right away. Read more. The average vehicle owner will change their oil about every 5,000 miles. 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. Quick Lube operating income is up to $162 million TTM . 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. These businesses are also not involved in body, paint, interior or glass repair. (Car Wash Magazine), #11. From our cost analysis above, we need approximately $560,000 plus $1,200,000 inventory to start Easy On Oil successfully. Below is a detailed analysis of how we want to spend our startup capital. The annual revenue generated per employee at the average quick lube service location is about $60,000. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. Another common method attributes value to a business based solely on its assets. These could include: You'll also need to know your liabilities. We all know this chore requires ones hands to get dirty, and for this reason alone, many car owners are perfectly okay paying a quick lube business to do the job for them. 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. Make sure they know by having your license visible front-and-center. 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. Your particular businesss SDE multiple will vary based on market volatility, where your business is located, your companys size, assets and how much risk is involved in transferring ownership. (Digital Dealer), #18. 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. Franchise Quick Lube, Car Wash, and RE in New Mexico! Because the process for determining the value of a small business is complicated, you might want to consider consulting a professional business broker or accountant that specializes in valuation, rather than going it alone. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. Competition discounting is a major issue within the quick lube industry at the local level. Sample 1 Sample 2 Sample 3 Based on 6 documents We also have plans to send them coupons for discounted work or give them a free oil change from time to time. (Car Wash Magazine), #10. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. About Your Results Many owners may even pursue franchising or opening several different locations to earn extra income. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. Here is a list of our partners and here's how we make money. No matter what, applications must be filled out and fees paid. It can gather data to . 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. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. www.ratchetandwrench.com is using a security service for protection against online attacks. Job Roles and Responsibilities 6. 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. We will also strengthen our relationships with local mechanics to capture repair needs of the local and highway traffic. We understand that starting a business like ours can be very expensive due to the high cost of equipment. Every state has a different process when it comes to business licensing. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. buying and selling) over the last 15 years. However, to keep capital investments low and offer quick building relocation, vehicle lifts can be used rather than basements. 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. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. 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. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. This is why several other methods exist. 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. Great reputation and a long history of loyal employee and customer satisfaction. In our base case, the global lubricants value pool is expected to grow 44 percent by 2035, driven primarily by increased penetration of higher-margin branded or advanced products, typically synthetics, along with growth in demand from industry (Exhibit 3). At Easy On Oil, we understand the importance of establishing reliability and consistency in business. 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. (Business Wire), #16. A valuation represents your companys total worth. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. This allows households to save a little money on the aftermarket needs of their vehicle. Generating Funding/Start up Capital for Easy On Oil. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. 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. : 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. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Easy On Oil will be managed by its three founding partners. We plan to make sure we dont ever run out of a specific part, while maximizing inventory turnover. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. 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. In total, Driven Brands has 1,100-plus locations across North America. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. 16% of the oil changes which occur within the quick lube industry feature Valvoline products. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. KEYWORDS oil change Operations Quick Lube. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. Do not sell or share my personal information. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. When evaluating offers, please review the financial institutions Terms and Conditions. Does becoming a quick lube business owner sound good to you? 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. Along with hybrids, all-electric cars are taking to the streets across the world. If YES, here is a sample Quick Lube business plan template & feasibility report. Theres a different SDE multiple for every industry. 8 Stalls & Pits! Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . I will only use Jason for Our 2022 recap of everything that happened in the fuel and lubricant industry. Even though quick lube locations are seeing a reduction in the number of cars being serviced each day, the number of oil changes being performed is rising. 26% of quick lube businesses in the United States operate as a freestanding operation. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. Pre-qualified offers are not binding. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. Pre-qualified offers are not binding. In charge of creating marketing and sales strategies, etc. 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. However, youre fully capable of valuing your business using your own resources. So, established businesses with stable profitability often use this valuation approach. 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. 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. She was trained at Ford and later took a position at Chevrolet. The cost of an oil. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. 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. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. www.ratchetandwrench.com is using a security service for protection against online attacks. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! A typical location performs about 1,200 jobs per month. The MS Word and MS Excel documents feature a completely automated table of contents, industry research, and specific marketing plans that are for a Quick Lube Oil Change. The two PEGs that own Express Oil LLC now have more than 700 stores. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. 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. These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. NerdWallet's ratings are determined by our editorial team. 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. In 2016, 45% of consumers asked for premium products from their preferred quick lube business. In the United States, about 450 million oil changes are performed each year. 1. Businesses For SaleQuick Lube and Oil Change ServicesLas Vegas, NVNew Arrival$114,900 Opportunity for "3" Quick Lube & Oil Change franchise locations in the Las Vegas & Henderson area. 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. Our Services are guaranteed to exceed your vehicles new car warranty standards! 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. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 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. 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. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. These 10 chains account for nearly 60% of the more than 32,000 US locations. One common method used to value small businesses is based on seller's discretionary earnings (SDE). And beyond conducting your valuation, you'll need your finances in order to transfer business ownership, regardless. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. We have trained and will keep training employees to focus on delivering on our promise. So, most hybrid-electric cars do not ever run on electricity alone. All these were analysed based on per-unit revenue, per-unit cost, and fixed costs. Most of our competitors have adopted point-of-sale systems in their stores. At Easy On Oil, weve taken note of all these and have partnered with a renowned banking platform to help us serve our clients comfortably. Take 5 Oil Change is one of their fastest growing brands. 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. effective manner and I never once felt like I was in the dark. Paul Hodowanic. Regardless of the option you pursue, get the word out with our help. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. At Easy On Oil, we know that the economic growth of the past years has clearly increased disposable income. We have tapped into real estate where our competitors cannot go. take status photos of any vehicle part. Consumers are shifting toward premium products within the quick lube industry. (IBIS World), #3. 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. 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. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. Some of them also have electronic work order systems available amongst their various service centres. 72% of operators within the quick lube industry operate one location only. Operating expenses and labor are the two largest costs facing the quick lube industry. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. 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. Easy On Oil is a well-positioned quick lube shop that will serve the needs of the people of San Diego. 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. The service requires full cookie support in order to view this website. First, make a detailed report of your business assets and liabilities. (Digital Dealer), #19. And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. 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. Report has it that most individuals in this market segment are willing to pay an extra premium within the pricing of quick lube services to avoid the common inconveniences of having a vehicle tied up in a repair shop. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. 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. Profit and loss statements for the last three years. SWOT Analysis 7. 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