Succeeding in business is never easy theres a reason why most small businesses never make it past three years but if you do it right, success wont be far away. 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. Paul Hodowanic. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. Make sure your company checks these three boxes: You make steady profits. 1. If YES, here is a sample Quick Lube business plan template & feasibility report. 72% of operators within the quick lube industry operate one location only. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. Car owners instead prefer to pay someone else to do it for them. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. In total, Driven Brands has 1,100-plus locations across North America. (Car Wash Magazine), #12. We will ensure we provide a full range of auto lubricant and repair parts inventory and rapid shipping capability of major parts. There are really four business valuation methods (nested within three approaches, as shown below) that you need to be aware of. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Large businesses generally use EBITDA calculations to value their businesses, and small businesses typically use SDE, since small-business owners often expense personal benefits. brokers, but I have to say that I have not worked with a more professional and diligent Marketing programs at lubes should be powerful and . Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. 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. Most online business valuation calculators use a variation of the income approach. Owners of quick lube businesses benefit from the quick overturn of customers and relatively low overhead. This allows the IC engine to focus on efficiency rather than trying to do everything as it does in an all-gas car. When evaluating offers, please review the financial institutions Terms and Conditions. Verifies vehicle performance by conducting test drives; adjusting controls and systems. 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. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. A typical location performs about 1,200 jobs per month. Jiffy Lube is a leading provider of automotive preventive maintenance. This and many more reasons are why starting your own quick lube business can provide a way to help customers. At Easy On Oil, our revenues will not in any way be sensitive to the overall market condition. The average age of a vehicle owned in the United States is 11.4 years. Your SDE represents the true, monetary value of your business, but your SDE multiple values your business according to industry standards. Please enable cookies on your browser and try again. assign a green, yellow, or red status to each part. Jiffy Lube International is the main player in the franchise segment of the quick-lube chain industry. At Easy On Oil, we will generate revenue by actively providing oil change services in each of our facilities. Particularly if this is your first company, or if you run a family-owned and operated business, take care to approach valuation as objectively as possible to come to an accurate number. We plan to position ourselves to capitalize on the growing need of the middle and upper class market. 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. Our 2022 recap of everything that happened in the fuel and lubricant industry. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. A Sample Quick Lube Repair Business Plan Template Table of Content 1. 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. Jiffy Lube has the most locations in the United States for the quick lube industry, with over 1,900 facilities as of February 2017. In comparison, leasing costs are just 9% of the overall expenses for the average location. 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. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. The Top Automotive Oil Change Franchises of 2023. The US automotive oil change and lubrication industry includes about 5,000 companies with combined annual revenue of about $5 billion. "Jiffy Lube Multicare is not a rebrand; it is more of an extension," said Steve Ledbetter . 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. 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. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. One Independent Quick Lube w/RE in El Dorado, KS. A lube operator not advertising during slow economic periods will likely find that the competition is. It's called Jiffy Lube Multicare. The higher your SDE multiple, as you might expect, the more your business is worth. I also like doing business with a local firm vs. a national chain. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . We also plan to leverage an automotive service scheduling software program. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. 65% of business owners report that their competitors offer discounting to obtain new customers within their own service radius. (Car Wash Magazine), #4. NerdWallet's ratings are determined by our editorial team. Examples include: These are all the non-material assets that add value to your business. She is based in New York City. 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. December 16, 2021. In 2011, 31% of consumers preferred a premium product. The average price for a multi-point oil change within the quick lube industry is $36.82. 3. 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. If you ever want to learn . 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. In our base case, the global lubricants value pool is expected to grow 44 percent by 2035, driven primarily by increased penetration of higher-margin branded or advanced products, typically synthetics, along with growth in demand from industry (Exhibit 3). www.ratchetandwrench.com is using a security service for protection against online attacks. 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. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. Even though quick lube locations are seeing a reduction in the number of cars being serviced each day, the number of oil changes being performed is rising. 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. 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. Below is a detailed analysis of how we want to spend our startup capital. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. We plan to leverage the highest degree of modern technology to manage a full range of automotive lubricants and parts inventory. 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. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. A well-run business will make transitioning ownership, without losing profits in the process, significantly easier. More on liabilities in a bit. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. Regardless of the option you pursue, get the word out with our help. We plan to let our customers know that we will only provide necessary repairs and service and will not try to charge them for services that they dont need. 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 you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. Maintaining the website with new trends and advises. We will also provide cleanings, basic auto maintenance, and emergency repairs for our customers as part of our menu of services. (Car Wash Magazine), #7. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. SWOT Analysis 7. If youre interested in learning more about the automotive business buying process and how our expert The average revenues generated by a single location in the quick lube industry reached almost $765,000 in 2013. (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.). Read more. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. (Business Wire), #13. 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