Understanding code and the relationship that software has with new vehicles will become an essential skill set for anyone working in the auto repair industry in the future. The average vehicle owner will change their oil about every 5,000 miles. Short overview of your business or personal finances. Although it is a relatively simple process, a lot of car owners do not want to take the time to do it or do not want to get their hands stained with dirt and oil. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. 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. 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. 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. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. One common method used to value small businesses is based on seller's discretionary earnings (SDE). Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. However, this does not influence our evaluations. into the automotive business. However, youre fully capable of valuing your business using your own resources. Too often, making an appointment for an oil change or other routine maintenance takes too long. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. (Car Wash Magazine), #4. Job Roles and Responsibilities 6. Most of our competitors have adopted point-of-sale systems in their stores. 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. Regardless of the option you pursue, get the word out with our help. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. www.ratchetandwrench.com is using a security service for protection against online attacks. Order Reprints. Next, you'll need to outline your business plan and model. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! There are about 250 million vehicles on the road which will require services at some point that can be provided by a quick lube location. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. In fact, with our location distribution we cover the market. Determines vehicle condition by conducting inspections and identifying worn and damaged parts. Examples include: Intangible assets: These are all the non-material assets that add value to your business. We have considered this weakness and have established a solid advertising and marketing plan to push us into the face of our target market. Marketing programs at lubes should be powerful and . 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. Why do diesel exhaust fluid (DEF) prices keep rising and falling? process as a consummate professional. 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. Read more. 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. 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. 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. Sally Lauckner is an editor on NerdWallet's small-business team. Contact us today! Another 16% of business owners have two locations where they provide services. #1. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. If buying and selling businesses is a new frontier for you, you can consult any number of online resources to help you determine the value of a business. (Car Wash Magazine), #12. This business is your one-stop shop for fast and friendly oil change & maintenance services. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. 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. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. In 2011, 31% of consumers preferred a premium product. 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. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. This information may be different than what you see when you visit a financial institution, service provider or specific products site. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Approaches to a successful small-business evaluation. Here is a list of our partners and here's how we make money. (Valvoline), #24. However, due to the confidentiality agreements stipulated by some of our current sellers, were not able In 2013, there were an average of 37.8 vehicles serviced per location, with 32.9 oil changes performed per day. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. (Digital Dealer), #19. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. New Constructs, LLC. The appeal of a quick lube business is easy to see. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. take status photos of any vehicle part. It's likely that any sellers you're working with will want to see your credit report and basic financial profile. Easy On Oil is a San Diego registered LLC quick lube business that will provide high quality oil changes at a reasonable price. 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. You'll need a minimum of $50,000 cash as a startup fee. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. Some of them also have electronic work order systems available amongst their various service centres. Verifies vehicle performance by conducting test drives; adjusting controls and systems. Here, business assets include anything that adds value to your company. Our Mission and Vision Statement 5. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Application and Obtaining Tax Payers ID: Application for business license and permit: Leasing, renovating and equipping our facility: Generating part of the startup capital from the founder: Printing of Packaging and Promotional Materials: Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: Creating Official Website for the Company: Creating Awareness for the business (Business PR): Health and Safety and Fire Safety Arrangement: Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Put your license proudly on display at your business. As 2018 kicked off, Jiffy Lube launched a new brand extension. This process is automatic. (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.). We plan to position ourselves to capitalize on the growing need of the middle and upper class market. Quick Lube operating income is up to $162 million TTM . Also, electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. 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. Small companies can compete successfully by owning favorable locations. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. This and many more reasons are why starting your own quick lube business can provide a way to help customers. First, though, you have to get your financial information in order. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. comprehensive listing of auto repairs for sale near you, give us a call at 1-800-874-5793 for details. Additionally, franchising a business comes with an entirely different set of understandings and obligations. 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. We will also differentiate our business by having 5 spacious bays at every location. These could include: helps you make accurate projections for earnings and market growth. In particular, the Adjusted Net Asset Method calculates the difference between a business's assets including equipment, property, and inventory, and intangible assetsand its liabilities, both of which are adjusted to their fair market values. 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. This segment comprises approximately 25% of our revenue at Easy On Oil. 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. It must also be done for a quick lube business. Along with hybrids, all-electric cars are taking to the streets across the world. SWOT Analysis 7. 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. 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. Jiffy Lube International. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. What often separates one lube shop from another is its creative marketing strategies. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. 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. Familiarity with your industry is crucial for both buyers and sellers. 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. assign a green, yellow, or red status to each part. The quick lube industry focuses on providing oil changing services for automobiles. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. Consumers are shifting toward premium products within the quick lube industry. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. Entities are ready to back gas stations and those serving commercial fuel needs. So, established businesses with stable profitability often use this valuation approach. 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. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. Looking to make a smart automotive business investment? The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. More on liabilities in a bit. 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. 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