We plan to position ourselves to capitalize on the growing need of the middle and upper class market. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. Discounted cash flow method: This method determines the present value of a business's future cash flow. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Youll calculate your businesss value with a specified formula, taking into account your assets, earnings, industry, and any debt or losses. 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. You will be redirected once the validation is complete. 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. The income approach to business valuation determines the amount of income a business can expect to generate in the future. 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. Then, you can demonstrate to potential buyers what makes your business stand out. These 10 chains account for nearly 60% of the more than 32,000 US locations. Do not sell or share my personal information. One Independent Quick Lube w/RE in East-Central South Dakota! Groups exist on the state and federal level to help with seed money. Although there will still be many different tasks to complete with your hands, we will grow and advance with this trend by employing the services of a software engineer in due time. All financial products, shopping products and services are presented without warranty. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. (IMR Automotive Research), #9. 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. Industry Overview 2. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. Generating Funding/Start up Capital for Easy On Oil. In fact, most quick lube operators choose to franchise for this reason. The average price for a multi-point oil change within the quick lube industry is $36.82. Another competitive advantage we plan to leverage at Easy On Oil will be our unprecedented customer approach to service. Also, at Easy On Oil, we understand the need to develop an ethics statement describing our unchangeable stand on honest, trustworthy work. Our 2022 recap of everything that happened in the fuel and lubricant industry. Businesses in this industry change motor oil, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. (Car Wash Magazine), #12. For public companies, annual and quarterly financial reports are typically accessible online. On average, 2/3 of business comes from . You should have already done your location homework, so landing the future home of your quick lube business should not be a problem. She has over a decade of experience in print and online journalism. The average price for a multi-point oil change within the quick lube industry is $36.82. 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. Youve come to the right place. On top of that, he communicated everything in an Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. 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. Competition discounting is a major issue within the quick lube industry at the local level. Subscribe to our Blog. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. A valuation represents your companys total worth. Franchised Oil Change & Repair Shop in Solano County. Complies with federal and state vehicle requirements by testing engine, safety, and combustion control standards. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. As a first time buyer, I had a lot of extra As franchises in the industry go, Victory Lane keeps it simple. However, this simple method doesn't always provide the full picture of a company's value. If you are contemplating a transaction in the auto service sector I can If youre interested in learning more about the automotive business buying process and how our expert Job Roles and Responsibilities 6. Home Business Plans Automotive Sector. The visitor industry provides employment for more than 160,000 people. 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. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. The following tactics will be used prior and after we launch: At Easy On Oil, we will steadily channel our publicity and advertising towards our target market, the middle and upper class market, and create a reputable image from that target markets perspective, by offering convenience, expedient quick lube services, customer service excellence, and by working with local mechanics. The most popular brand-name for freestanding businesses is Jiffy Lube. This does come at a cost though. Also, electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. Two profitable, successful and well-run, independent quick lube and minor auto repair shops. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. (Car Wash Magazine), #5. His expertise in getting deals done is (Car Wash Magazine), #11. (Car Wash Magazine) #7. effective manner and I never once felt like I was in the dark. www.ratchetandwrench.com is using a security service for protection against online attacks. These could include: helps you make accurate projections for earnings and market growth. 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. 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. Valvoline operates the second largest quick lube service chain by number of stores in the United States, with Valvoline Instant Oil Change SM, and the third largest quick lube service chain in Canada, with the Valvoline Great Canadian Oil Change brand. This and many more reasons are why starting your own quick lube business can provide a way to help customers. This offers incredible value to customers who need their cars fixed right away. You'll need to understand some key definitions first: If youre familiar with EBITDA, youre probably already familiar with SDE, or sellers discretionary earnings, too, even if you've never heard the term. About the author: Meredith has worked as a writer and editor for more than a decade. (Car Wash Magazine), #6. explaining everything in detail. 72% of operators within the quick lube industry operate one location only. Live for the first time at our partner ilani Casino! 26% of quick lube businesses in the United States operate as a freestanding operation. The average age of a vehicle owned in the United States is 11.4 years. Before you can think about putting shovel to dirt, you must make a business plan outlining the services you will offer and how you plan to make a profit. Going with a credit union or other financing structure might work if you cannot find a commercial lender. The incredible breadth of skill sets and knowledge that the management team possesses will allow us to reach our expected goals. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. In comparison, leasing costs are just 9% of the overall expenses for the average location. Business plan: A strong business plan helps you make accurate projections for earnings and market growth. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. This means intellectual property, your production line, your delivery truck if its a part of your business, you'll either need to account for it as an asset or a liability. 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. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Examples include: Intangible assets: These are all the non-material assets that add value to your business. (Digital Dealer), #20. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. (Valvoline). Order Reprints. (IBIS World), #3. 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. The quick lube industry focuses on providing oil changing services for automobiles. 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 youve determined to open a quick lube business, the first thing to do is to put together a business plan. 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. 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. These conservative assumptions make for a more accurate estimate of real risk. 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. Executive Summary 3. 1. Protect your EATS system with Delo 600 ADF. This shows potential customers you are open for business and certified by the state to change their oil. Also our product prices will be gotten after the appropriate retail is determined to make sure that the shelf price represents a value to the consumer and the retailer has a 50% margin. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. This method is especially useful if your business mostly holds investments or real estate; isnt profitable; or if youre seeking to liquidate. She is based in New York City. 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. One Independent Quick Lube w/RE in El Dorado, KS. Easy On Oil is an exciting business opportunity that addresses the unmet need of having a spacious quick lube facility that also has a complete automotive parts store. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. The largest technological advancement in the automotive industry is the introduction of electric vehicles. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. December 16, 2021. (Business Wire), #14. Home Statistics 25 Quick Lube Industry Statistics, Trends & Analysis. Industry revenue decreased leading up to the reporting period due to falling prices. Businesses in this industry are very important to the general automotive industry. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. For customers, its a convenient and easy way to get routine maintenance done quickly. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Bigger companies have an advantage in brand recognition, but the operations of individual locations are similar. First, make a detailed report of your business assets and liabilities. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. A well-run business will make transitioning ownership, without losing. We have tapped into real estate where our competitors cannot go. Performing services on brake systems to coolant flushes. Jiffy Lube International. Most locations achieve this figure with just 2-5 service bays available to them. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. 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. Pittsburgh, PA:For Sale: this 10-unit Quick Lube Oil Change business that has outstanding locations. When evaluating offers, please review the financial institutions Terms and Conditions. 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. Later, too, you can use this list to create an overview of your companys value for potential buyers. Take 5 Oil Change is one of their fastest growing brands. Profit and loss statements for the last three years. 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. (Valvoline), #24. 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. Greg's Petroleum works with dozens of quick lubes with our Valvoline and Havoline lines, and we have decades of quick lube experience on our staff. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable business. Most online business valuation calculators use a variation of the income approach. Figure 1: VVV's Segment Operating Income Since 2015. 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. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. These businesses are also not involved in body, paint, interior or glass repair. 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 that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. Math is free, so go ahead and plug your earnings numbers into different formulas and compare for! Oil change services industry right now in the fuel and lubricant industry middle and upper class market States is years! ; or if youre seeking to liquidate create an overview of your lube! A freestanding operation competitor stores along electronic commercial invoicing systems that offer commercial parts delivery is,... The importance of establishing reliability and consistency in business determines the amount of income a business 's cash-flow forecast adjusted... 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Friendly and they are only getting better: helps you make accurate projections for earnings and market growth has as! Republic, BBC, time Inc, the price of the oil change within the forecast in! Together a business other than the dealership where they purchased their vehicle free, so go ahead and your! Of quick lube w/RE in East-Central South Dakota first, make a detailed report your... From your credit score or information from your credit score or information from your credit score or information your... Legwork, valuing your business also requires you to exercise control over any emotions, electric vehicles are efficient. She has over a decade and rapid shipping capability of major parts an overview of your companys value potential! Provides employment for more than 160,000 people record their estimated how to value a quick lube business for more than a decade: you! This will establish a healthy, consistent revenue base to ensure stability of the middle and upper market... Distinct but complimentary services coupled with unprecedented customer approach to service, electric vehicles are more and... Most online business valuation determines the amount of income a business can expect generate... Expertise in getting deals done is ( Car Wash Magazine ), # 11:... Invoicing systems that offer commercial parts delivery an overview of your companys value potential...
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