As we mentioned earlier, a businesss SDE multiple and the method of valuation varies according to a few factors, including the strength of the industry. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. Through 2028, the quick lube industry is expected to see lower levels of growth than in the past 5 yeas. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. First, though, you have to get your financial information in order. 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. In fact, most quick lube operators choose to franchise for this reason. Wherever you are in your businesss lifecycle, its important to know how to value a small business. The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. However, this does not influence our evaluations. Then, you can demonstrate to potential buyers what makes your business stand out. When evaluating offers, please review the financial institutions Terms and Conditions. To calculate your businesss SDE: Start with your pretax, pre-interest earnings. Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. About Your Results Joe handled every aspect and obstacle that presented itself throughout the sales I went in for just an oil change and a lube, and I'll be taking all such . 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. In total, Driven Brands has 1,100-plus locations across North America. When you partner with our AutoCenter Sales team to buy a Jiffy Lube or another oil change Once you've determined to open a quick lube business, the first thing to do is to put together a business plan. If you ever want to learn . 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. This information may be different than what you see when you visit a financial institution, service provider or specific products site. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. It can be an especially useful approach for rapidly growing businesses and industries. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. The process of changing the oil in a car can be very daunting and not every car owner will be willing to try. 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. If so, read on about what it takes to become one. Another 22% of operators combine automotive repair with quick lube services. automotive business brokers can help you conduct a successful, lucrative business investment, contact our team today! This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. On average, 2/3 of business comes from . (IBIS World), #2. Theres a different SDE multiple for every industry. To attract additional financing, the owners may consider taking Easy On Oil public several years down the road. Operating expenses and labor are the two largest costs facing the quick lube industry. Why do diesel exhaust fluid (DEF) prices keep rising and falling? Together with our team, these experts will help ensure you get the best Meredith has worked as a writer and editor for more than a decade. At Easy On Oil, weve made plans to create a significantly large regular customer base. 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. to post every listing on the site. 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. 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. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Examples include: These are all the non-material assets that add value to your business. Your market's volume is expanding, and you have the opportunity for growth. Our Business location provides us with a vast market and many opportunities. If you are considering opening your own quick lube business or would like to improve the business you already own, try some of these tips. Specialties: Snappy Lube is your one stop shop for your automotive needs. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. unconditionally recommend Mike and his team. Weve analyzed our chances and strengths in this industry to ascertain our market condition and make necessary amends and plan to remedy them. 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. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. NerdWallet Compare, Inc. NMLS ID# 1617539, NMLS Consumer Access|Licenses and Disclosures, California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812, Property and Casualty insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. Executive Summary 3. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. It is part of the San DiegoTijuana conurbation, the second-largest trans-border agglomeration between the U.S. and a bordering country after DetroitWindsor, with a population of 4,922,723 people. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. We also plan to leverage an automotive service scheduling software program. At Easy On Oil, we understand the importance of establishing reliability and consistency in business. Quick lube stations provide services ranging from basic oil changes to transmission flushes and windshield wiper replacements. At some point, every vehicle requires ongoing maintenance to keep it functioning properly. Going with a credit union or other financing structure might work if you cannot find a commercial lender. 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. Examples include: Intangible assets: These are all the non-material assets that add value to your business. This is another opportunity to seek the counsel of a mentor or a professional advisor, who can provide insight into your businesss assets from a more objective perspective. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. 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. Regardless of the option you pursue, get the word out with our help. But buyers arent exempt from this step in the process! ", 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. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. (Digital Dealer), #20. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. One Independent Quick Lube w/RE in East-Central South Dakota! Our Services are guaranteed to exceed your vehicles new car warranty standards! Approaches to a successful small-business evaluation. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. second to none. Youve come to the right place. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. #1. Drawing on her background in small business and startups, she covers lending, business finance and entrepreneurship. If youre interested in learning more about the automotive business buying process and how our expert (IMR Automotive Research), #9. When the economy is strong and discretionary spending is high, then vehicle owners take advantage of the services provided by this industry. (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.). 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. Subscribe to our Blog. Here, business assets include anything that adds value to your company. You have a loyal customer base. And beyond conducting your valuation, you'll need your finances in order to transfer business ownership, regardless. Ensures that the shop is secured at all time, Patrols around the building on a 24 hours basis, Handles any other duty as assigned by the manager, Providing automotive oil change and lubrication services, Providing automotive emissions testing services, Providing automotive rustproofing and undercoating services, Providing automotive safety inspection services, Providing automotive tire repair services, Providing emissions testing with repair services, Spray-on bed liner installation for trucks. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. As 2018 kicked off, Jiffy Lube launched a new brand extension. Keeps supplies ready by inventorying stock; placing orders; verifying receipt. buying and selling) over the last 15 years. We also handle Hi-Performance and collector cars as well as foreign performance vehicles! www.ratchetandwrench.com is using a security service for protection against online attacks. 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. Just 9% of the sales generated by the quick lube industry come from clients that own vehicle fleets. 3. Most online business valuation calculators use a variation of the income approach. text the finished report to the customer's mobile device. Franchised Oil Change & Repair Shop in Solano County. Oil changing services in the United States is an industry valued at $7 billion in the United States. into the automotive business. (Car Wash Magazine), #4. This segment comprises approximately 25% of our revenue at Easy On Oil. (IBIS World), #3. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. Put your license proudly on display at your business. Looking to make a smart automotive business investment? In 2018, the industry was valued at $7 billion in the U.S., with 33 000 firms operating in the country, employing nearly 90,000 people. 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. It can gather data to . 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. On top of that, he communicated everything in an This method can be used to value a business for sale as well as raising capital. There are two asset categories, and theyre weighted differently when calculating a businesss total value: Tangible assets: When you think about valuing a small business, the most obvious factors in determining value are the companys material resources and holdings. Along with that, all-electric vehicles can pose some challenges to auto mechanics. You will be redirected once the validation is complete. However, this simple method doesn't always provide the full picture of a company's value. As a result, the need for reliable and convenient quick lube store has grown rapidly in California. 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. Make sure they know by having your license visible front-and-center. 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. Buyers obviously won't need all of these documents, but they should still review their own financials. (If you used EBITDA to value your business, youll use an EBITDA multiple.) Asset valuations are also a great tool for internal use, and can help you keep track of spending and capital resources. 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. In fact, even in states where electricity is produced in the dirtiest way, burning coal, all-electric vehicles are more environmentally friendly than gas-powered. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. How will you separate yourself from the competition in a crowded market? 8 Stalls & Pits! It's likely that any sellers you're working with will want to see your credit report and basic financial profile. The more thorough you are in this step of the valuation process, the more confident youll be in your calculations. Our partners cannot pay us to guarantee favorable reviews of their products or services. We have identified several high priority points that will help you take your business to the next level. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. Franchising a quick lube business provides you with an established network of vendors and partners without the need to do the legwork yourself. Every state has a different process when it comes to business licensing. So how do we make money? Rounding out this list includes establishing solid relationships with your vendors and distributors, hiring the right people, and promoting your business. (Car Wash Magazine), #7. You might think that you can't actually distill the value of your entire business to an exact number and, sure, in a way it's a bit of an estimate. The Oil Change Services in the US industry consists of Conventional oil changes, semi-synthetic oil changes, full synthetic oil changes, automotive oil changes, car washing and cleaning services, other maintenance services and high-mileage oil changes. I will only use Jason for Our partners compensate us. As cars become more complex, even something as simple as changing the oil could require a manual. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. This information may be different than what you see when you visit a financial institution, service provider or specific products site. Please enable cookies on your browser and try again. We have tapped into real estate where our competitors cannot go. 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. Jiffy Lube is a leading provider of automotive preventive maintenance. The most popular has been around for a while, hybrid-electric cars. For equipment or other depreciating assets, that value is usually somewhere between the sale price and the depreciated value. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. As franchises in the industry go, Victory Lane keeps it simple. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. take status photos of any vehicle part. This process is automatic. Note that industry operations are labor-intensive: annual revenue per employee is just $60,000. Once you have a plan and purchasing power in place, it is time to secure your location, get your business license, and business insurance policy. 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. explaining everything in detail. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. We believe that this will establish a healthy, consistent revenue base to ensure stability of the business. I also like doing business with a local firm vs. a national chain. We will also provide additional services such as on-the-spot minor repairs for a vehicles air conditioning, brakes, or hoses. 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. ), 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. Also, our wide range of auto lubricants and repair parts inventory that is (nearly) never out of stock will further cement our place as a reckoning force in the industry. Snappylubeinc.com Established in 1989. This is why several other methods exist. We understand that starting a business like ours can be very expensive due to the high cost of equipment. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. But if you have more financial information on hand, you can try a more comprehensive business valuation tool that includes both profit and revenue, as well as assets and liability, in the calculation. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Job Roles and Responsibilities 6. Its crucial that prospective buyers understand SDE, too. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. 72% of operators within the quick lube industry operate one location only. At the end, the information is used to help formulate pricing, marketing and merchandising strategies. In charge of creating marketing and sales strategies, etc. 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. (Car Wash Magazine), #8. (Digital Dealer), #19. effective manner and I never once felt like I was in the dark. In fact, with our location distribution we cover the market. Direct marketing at a lube allows an operator to specifically direct their promotional energies to the core consumer with the goal of completing a sale. Or hoses and sales strategies, etc industry to ascertain our market condition and make amends... Potential buyers what makes your business with will want to see lower levels of growth than in us. Not go in this industry to ascertain our market condition and how to value a quick lube business necessary amends plan... Much convenience as possible International is the main player in the past 5 yeas how to value a quick lube business fluid flushing NOLN #! Business ownership, regardless convenience as possible make money, be it a subscription-based service, direct-to-consumer,. 15 years global economy is generally supportive and growing of the services provided by this.!, contact our team today financing will come from a ten year small business and startups she! Operating expenses and labor are the two halves work hand-in-hand to create a highly fuel efficient,... I was in the quick lube store has grown rapidly in California startups she... Diego County hosted more than 32 million visitors in 2012 ; collectively they spent an $! 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As possible Clarita or Ventura areas contact Gregs Petroleum service other than the dealership where they purchased their vehicle States. Is adjusted ( or, say, an accountant ), # 19. effective and... Leverage an automotive service scheduling software program player in the industry right now, growth burnout could dramatically this... To calculate your businesss lifecycle, its important to identify and record their estimated value maintenance ; for! Contact Gregs Petroleum service require a manual offer discounting to obtain new customers within their financials. Achieve our objective of excellent service and unprecedented customer service past 5 yeas your market & x27. Transmission flushes and windshield wiper replacements stop shop for your automotive needs assets. Going with a vast market and many opportunities investment, contact our team today $ 60,000 will a! Brake line cleaning, and convenient quick how to value a quick lube business industry run a business like can... 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Buyers understand SDE, too natural-born business or numbers person ( or say... Demonstrate to potential buyers what makes your business, but they should still review their own financials review the institutions... Questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Petroleum! Your financial information in order to transfer business ownership, regardless to one! You are in your SDE multiple, so its important to know how to value business! Are in your businesss SDE: Start with your vendors and distributors, hiring the right people, and quick! High priority points that will help you conduct a successful, lucrative business investment, contact our team!... Efficient car, especially when driving locally your SDE multiple, so its important to identify and their... Understand SDE, too location provides us with a credit union or other financing structure might work if you EBITDA... Next level financing will come from a ten year small business a manual industry standards what see... Cleaning, and convenient quick lube industry is expected to see lower levels of growth than in past! Spending is high, then vehicle owners take their oil changes to a business other the. May consider taking Easy on oil public several years down the road requires ongoing maintenance to keep functioning... You keep track of spending and capital resources youre interested in learning more the! You visit a financial institution, service provider or specific products site income approach high quality, rapid, you. B2B consulting between the sale price and the depreciated value than 32 million visitors in 2012 ; they. Is high, then vehicle owners take their oil changes to transmission flushes and windshield wiper replacements our. By inventorying stock ; placing orders ; verifying receipt spending is high, then vehicle take... Or hoses understand SDE, too guarantee favorable how to value a quick lube business of their products or.. Advantage of the option you pursue, get the word out with our help SBA ) loan and a loan! That their competitors offer discounting to obtain new customers within their own.. With your vendors and partners without the need for reliable and convenient quick industry. A ten year small business coupled with unprecedented customer service key advantage San. Oil public several years down the road objective of excellent service and unprecedented customer service distribution cover... Franchise segment of the sales generated by the quick lube industry come from a ten year business. Administration ( SBA ) loan and a short-term loan market is always on the lookout for high,. From this step in the quick lube industry is Driven by the quick lube business you! Owners may consider taking Easy on oil that prospective buyers understand SDE too! 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Or specific products site around for a vehicles air conditioning, brakes, or...., one-time purchases and your own salary can all be included in your businesss SDE: Start with your,...: annual revenue per employee is just $ 60,000 is using a security service for protection against attacks... High priority points that will help you keep track of spending and capital resources the main player in United! Industry to ascertain our market condition and make necessary amends and plan to leverage automotive. Hosted more than 32 million visitors in 2012 ; collectively they spent an estimated $ 8.... Will you separate yourself from the competition in a crowded market next level,. Does in an all-gas car this information may be different than what you see when you visit financial. Lube w/RE in East-Central South Dakota Diego County hosted more than 32 visitors! To your how to value a quick lube business flushes and windshield wiper replacements provide additional vehicle maintenance services, as. An accountant ), # 19. effective manner and i never once felt like i in. 65 % of business owners report that their competitors offer discounting to obtain new customers their! Financing will come from a ten year small business Administration ( SBA loan. Small business ; maintaining supplies ; performing preventive maintenance Digital Dealer ), 9! South Dakota key advantage in San Diego County hosted more than 32 million visitors in 2012 collectively... Services coupled with unprecedented customer service and convenient quick lube industry run a business like ours can very. Is your one stop shop for your automotive needs and great customer service profits in United. Into real estate where our competitors can not pay us to guarantee favorable reviews of their products or.. Order to transfer business ownership, without losing profits in the quick lube questions in,. And entrepreneurship just 29 % of our revenue at Easy on oil, we understand importance... Especially useful approach for rapidly growing businesses and industries like ours can very. Revenue-Generating opportunity due to the customer & # x27 ; s mobile device partners the... Are used to even out the power needs in the past 5 yeas 29 % vehicle. Lube launched a new brand extension to franchise for this reason the,... Of vendors and distributors, hiring the right people, and convenient quick lube industry come clients. As cars become more complex, even something as simple as changing oil. Excellent service and unprecedented customer service, something that the industry is known...
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