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. Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. Here, business assets include anything that adds value to your company. So, most hybrid-electric cars do not ever run on electricity alone. First, though, you have to get your financial information in order. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. If you have a solid business plan, potential investors may feel better about putting their money where your mouth is. The service requires full JavaScript support in order to view this website. 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. 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. So, established businesses with stable profitability often use this valuation approach. Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. Performing services on brake systems to coolant flushes. Our 2022 recap of everything that happened in the fuel and lubricant industry. www.ratchetandwrench.com is using a security service for protection against online attacks. Industry revenue decreased leading up to the reporting period due to falling prices. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Paul Hodowanic. Since 2012, the industry has achieved an annualized rate of growth averaging 1.5%. In total, Driven Brands has 1,100-plus locations across North America. Over my over fifty year career, I have had the privilege of working with many other Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. Sources: New Constructs, LLC and company filings. Over the past decade, improved technology and extraction techniques enabled industry . Theres a different SDE multiple for every industry. Easy On Oil is a San Diego registered LLC quick lube business owned by three equal partners, Temple Curtis, Aaron Flinch and Helen Primer. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. 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. ), 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. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Today, the company operates as a wholly-owned subsidiary of Royal Dutch Shell within the parent company Pennzoil. 3. (Car Wash Magazine), #12. We plan to offer our clients personalized service by offering convenience and rapid service. Regardless of the option you pursue, get the word out with our help. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. A well-run business will make transitioning ownership, without losing. All financial products, shopping products and services are presented without warranty. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Why do diesel exhaust fluid (DEF) prices keep rising and falling? A good rule of thumb is to estimate how much a piece of equipment would sell for today, and use that number. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. We will always stress the fact that we only offer reliable services. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. One Independent Quick Lube w/RE in East-Central South Dakota! comprehensive listing of auto repairs for sale near you, give us a call at 1-800-874-5793 for details. Pre-qualified offers are not binding. SHOP STATS . No matter what, applications must be filled out and fees paid. Over half of these competitors offer both auto repair services, although without an inventory store. These similar businesses, often referred to as comparables or "comps," can orient you within the marketplace and provide context about the sector. 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. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. (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 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. But after analyzing our chances, we are prepared to prudently acquire these equipment and service the growing need in our market. Protect your EATS system with Delo 600 ADF. One Independent Quick Lube w/RE in El Dorado, KS. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. explaining everything in detail. Note that each of the three co-owners will invest an equal amount. (Valvoline), #24. Also our plans to make sure we maintain a referral network will give us the needed push in the industry. Our partners compensate us. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. text the finished report to the customer's mobile device. (Thats why this number is subtracted from the SDE in valuation calculations.) (Digital Dealer), #17. Industry Overview 2. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. Further explained below are the results of our SWOT analysis at Easy On Oil: At Easy On Oil, our strength is on the fast and convenient quick lube repair services we plan to offer our clients. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. Weve provided them with the supplies and lubricants they need to keep their customers happy. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. For the average business, they account for 60.7% of total expenses. These could include: helps you make accurate projections for earnings and market growth. Maintains vehicle records by annotating services and repairs. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. To start off, there are two major types of electric cars that are on the roads today. 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. Great reputation and a long history of loyal employee and customer satisfaction. Copyright 2023, Greg's Petroleum Service, Inc, New Chevron Grease Cartridges to Premiere Soon, Gregs Petroleum Service Receives Chevrons Gold Lubrication Marketer Award. Home Business Plans Automotive Sector. The quick lube business may thrive on customer turnover, but quality, efficient service is what brings customers back to their favorite quick lube shops again and again. (Car Wash Magazine), #10. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. 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. 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. To calculate your businesss SDE: Start with your pretax, pre-interest earnings. 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. (Business Wire), #13. Do you want to start a Quick Lube company and need to write a business plan? 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. It's called Jiffy Lube Multicare. 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. Competition discounting is a major issue within the quick lube industry at the local level. As revenues have increased, however, net profits have decreased by 2.3%. The remaining are small privately-owned establishments. 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. The appeal of a quick lube business is easy to see. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. ", 100 Best Side Hustles for Teens to Make Money, 10 Proven Psychological Pricing Strategies with Examples, 100 Office Etiquette Rules You Need to Know, 50 Best Business Letter Closings of All-Time. Our plan at Easy On Oil is to service the middle and upper income markets. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. However, this simple method doesn't always provide the full picture of a company's value. The Top Automotive Oil Change Franchises of 2023. Additionally, you will receive a complete MS Word/MS Excel business plan that you can use if you need capital from an investor, bank, or grant company. 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. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors, 25 Quick Lube Industry Statistics, Trends & Analysis, 41 Food Truck Industry Statistics, Trends & Analysis, 47 Green Industry Statistics, Trends & Analysis, 49 High Tech Industry Statistics, Trends & Analysis, "From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors. You have a loyal customer base. Sellers will need to follow steps to properly take inventory of your assets. 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. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. Going with a credit union or other financing structure might work if you cannot find a commercial lender. We also have plans to send them coupons for discounted work or give them a free oil change from time to time. Together with our team, these experts will help ensure you get the best 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. We also plan to leverage an automotive service scheduling software program. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. 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. With a national footprint of more than 2,000 franchisee owned service centers across the country, Jiffy Lube offers a range of services from oil changes and tire rotations, to everything in between. We do not intend to offer expansive vehicle repair services as our facilities will not be equipped to run full automotive diagnostics and repairs. Operating expenses and labor are the two largest costs facing the quick lube industry. 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. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. However, this does not influence our evaluations. Internet companies or buyers interested in the tech sector can use online directories like Crunchbase and platforms like AngelList, which provide information about startups, funding, investors, and more. Let's #LineItUp from Washington State! These systems gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. Mike has been instrumental in helping me successfully complete 4 transactions (both Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. Franchise Quick Lube, Car Wash, and RE in New Mexico! About Your Results The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. Just 9% of customers come from a 2-mile radius. A valuation is a suggestion of value, but your business model shows potential buyers how theyll actually reach their customer base to generate revenue if they purchase your company. Learn more about financial projections, income statements, balance sheets and cash flow. Looking to make a smart automotive business investment? 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. Although this may create some upfront reduction in revenue, we believe it will end up paying out in the long run as we start to build up a client base that will only come to us for repairs and refuse to go anywhere else. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. vendors, insurance agents, and others. 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. 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