This allows households to save a little money on the aftermarket needs of their vehicle. 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. Note that convenience, steady referrals from local mechanics, and high quality, rapid service are necessary to capture this segment of the market. (Car Wash Magazine), #5. (Car Wash Magazine), #10. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Oil Change Services in the US industry trends (2017-2022) The Oil Drilling and Gas Extraction industry in Canada has endured significant volatility over the five years to 2022. Quick lube businesses make it easy and affordable for vehicle owners to take care of this need without a large time investment. This method can be used to value a business for sale as well as raising capital. On average, 2/3 of business comes from . 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. Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. 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. unconditionally recommend Mike and his team. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. 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. Entrepreneurs looking to buy an existing business should also be familiar with valuations, and feel comfortable estimating value independently of the business owner or brokers asking price. As a first time buyer, I had a lot of extra We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. (Car Wash Magazine) #7. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. This segment comprises approximately 25% of our revenue at Easy On Oil. (Digital Dealer), #19. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. Meredith has worked as a writer and editor for more than a decade. Every state has a different process when it comes to business licensing. EasyOn Oil will actively provide oil change services in each of our facilities for vehicles. Over 70% of the customers a quick lube business receives originates within 10 miles or less of the business location. 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. Discounted cash flow method: This method determines the present value of a business's future cash flow. When evaluating offers, please review the financial institutions Terms and Conditions. About the author: Meredith has worked as a writer and editor for more than a decade. 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 long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Competition discounting is a major issue within the quick lube industry at the local level. brokers, but I have to say that I have not worked with a more professional and diligent So, most maintenance on electric cars will be more software driven. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Our partners compensate us. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. Job Roles and Responsibilities 6. If you want to take the income approach, you can choose between two commonly used valuation methods. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. effective manner and I never once felt like I was in the dark. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. 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. Too often, making an appointment for an oil change or other routine maintenance takes too long. Performing services on brake systems to coolant flushes. 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. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. Knowing your peer companies will also help you assess your market share and growth potential. 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. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . (IBIS World), #3. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. The most popular has been around for a while, hybrid-electric cars. Meredith has worked as a writer and editor for more than a decade. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. : This method determines the present value of a business's future cash flow. For the average business, they account for 60.7% of total expenses. 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. buying and selling) over the last 15 years. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. (Business Wire), #13. His expertise in getting deals done is Our Products and Services 4. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. Hybrid cars are a mix between a traditional internal combustion engine and an electric drive-train. Sources: New Constructs, LLC and company filings. (Car Wash Magazine), #11. 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. You have a loyal customer base. 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. A typical location performs about 1,200 jobs per month. www.ratchetandwrench.com is using a security service for protection against online attacks. The higher your SDE multiple, as you might expect, the more your business is worth. SHOP STATS: Midas Kalkaska Location: Kalkaska, Mich. . Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. 3. Below is a detailed analysis of how we want to spend our startup capital. Industry revenue decreased leading up to the reporting period due to falling prices. Please enable JavaScript on your browser and try again. The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. The most successful owners invest in these practices to deliver the best service for their customers. About Your Results Maintains vehicle records by annotating services and repairs. 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. According to reports, the industry is fragmented; the 50 biggest companies generate less than 40 percent of revenue. take status photos of any vehicle part. Additionally, franchising a business comes with an entirely different set of understandings and obligations. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. Specialties: Snappy Lube is your one stop shop for your automotive needs. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. 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. 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. But buyers arent exempt from this step in the process! Implement an ongoing training program. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. If you need assistance branding your quick lube business, or for more information about franchising, were here to help. Typically, more than 70 percent of revenue is from oil changes. Our opinions are our own. To start off, there are two major types of electric cars that are on the roads today. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. 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. Figure 1: VVV's Segment Operating Income Since 2015. Check out our Website for Services and Coupons! Weve provided them with the supplies and lubricants they need to keep their customers happy. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Owner: Randy Lucyk Staff Size: 12 Shop Size: 9,300 square feet Number of Lifts/Bays: 2 oil change and 10 service bays Average Monthly Car Count: 650 Annual Revenue: $1.78 million. 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. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. 26% of quick lube businesses in the United States operate as a freestanding operation. Along with hybrids, all-electric cars are taking to the streets across the world. We plan to leverage the highest degree of modern technology to manage a full range of automotive lubricants and parts inventory. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. Contact us today! Protect your EATS system with Delo 600 ADF. Our Services are guaranteed to exceed your vehicles new car warranty standards! She was trained at Ford and later took a position at Chevrolet. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. Consumers are shifting toward premium products within the quick lube industry. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. 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. They are responsible for the direct employment of almost 90,000 people. 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. Often, making an appointment for an oil change is requested, the company operates as writer. Roads today all-electric cars are a mix between a traditional internal combustion and! 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