More on liabilities in a bit. (Digital Dealer), #18. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Our vision at Easy On Oil is to become the leading business that offers Quick Lube repair services and a well-stocked repair parts shop in San Diego, California. Also, electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. This is why several other methods exist. As you can deduce from its name, the market approach to valuing a business determines a companys value based on the purchases and sales of comparable companies within the same industry. Keys to determine the value of a small business, Start with your pretax, pre-interest earnings. 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. Examples include: These are all the non-material assets that add value to your business. Our partners compensate us. (Car Wash Magazine), #7. If you are contemplating a transaction in the auto service sector I can (Car Wash Magazine), #12. Our 2022 recap of everything that happened in the fuel and lubricant industry. Sample 1 Sample 2 Sample 3 Based on 6 documents 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. With the Multicare brand extension, Jiffy Lube is focusing on rolling out brake, diagnostic - and eventually tire - services to its customers. As franchises in the industry go, Victory Lane keeps it simple. Performing services on brake systems to coolant flushes. Job Roles and Responsibilities 6. Once youve determined to open a quick lube business, the first thing to do is to put together a business plan. These businesses are also not involved in body, paint, interior or glass repair. His expertise in getting deals done is The average price for a multi-point oil change within the quick lube industry is $36.82. We will give a guarantee on all our repairs for a certain amount of miles or time. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. www.ratchetandwrench.com is using a security service for protection against online attacks. Additionally, franchising a business comes with an entirely different set of understandings and obligations. 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. But as a seller, you have to put some number on your operation, especially if you want to be compensated for what you've built, taking into account all kinds of equity. Oil changing services in the United States is an industry valued at $7 billion in the United States. And NOLN's top ranking shows 93 chains in the US with at least 6 locations. 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. 3. In hybrid-electric cars, the electric systems are used to even out the power needs in the vehicle. A lube operator not advertising during slow economic periods will likely find that the competition is. Driving up to a quick lube business for routine maintenance that can be completed quickly saves consumers time and money. Familiarity with your industry is crucial for both buyers and sellers. Before buyers can confidently make an offer on a business, theyll need to become well-versed (if not an expert) on that businesss industry. Depending on the degree of corporate transparency, you can also see what comparable businesses are selling for. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. The two PEGs that own Express Oil LLC now have more than 700 stores. The annual revenue generated per employee at the average quick lube service location is about $60,000. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. How to Apply for and Get a Business Loan in 5 Steps, Small-Business Grants: Where to Find Free Money, SBA Loan Overview: Types, Pros and Cons, How to Apply. Oversees the activities of group technicians, including the recruiting and credentialing processes, Attend standing meetings (board, committee, etc. 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. Unlike auto mechanics, businesses in this industry do not offer mechanical and electrical repair and maintenance. A well-run business will make transitioning ownership, without losing. Among these, only a few are major national chains. This method can be used to value a business for sale as well as raising capital. 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. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. For your quick lube questions in Bakersfield, Fresno, San Luis Obispo, Santa Clarita or Ventura areas contact Gregs Petroleum Service. At Easy On Oil, we believe that by having a high level of commuting traffic, and an equally high level of tourism traffic on local highways, our business location and shop will always bring in demand for quick lube services. This shows potential customers you are open for business and certified by the state to change their oil. 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. Your particular businesss SDE multiple will vary based on market volatility, where your business is located, your companys size, assets and how much risk is involved in transferring ownership. 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. (Valvoline), #24. Entities are ready to back gas stations and those serving commercial fuel needs. 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. First, make a detailed report of your business assets and liabilities. In the United States, about 450 million oil changes are performed each year. Operating expenses and labor are the two largest costs facing the quick lube industry. Although this can be very hard to achieve if we have high employee turnover which can lead to inexperienced new workers who need to be guided in the business, which can take time. I help you make the necessary changes that will remove you from the daily grind and fire-fighting so you can create new value and make additional impact in other areas. Take 5 Oil Change is one of their fastest growing brands. 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. Maintaining the website with new trends and advises. 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. Also our cash flow is impaired and business hours are limited for a retail establishment (Monday through Friday 9:00 a.m. to 6:00 p.m.). We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. Small companies can compete successfully by owning favorable locations. 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. Here is a list of our partners and here's how we make money. Paul Hodowanic. How much is an oil change? Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. (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.). 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. (Car Wash Magazine) #7. This approach works best for newer businesses with high-growth potential, but which arent yet profitable. What often separates one lube shop from another is its creative marketing strategies. Small, regional locations can allow owners to carve out successful markets for their business. 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. The service requires full JavaScript support in order to view this website. Aaron boasts of a prosperous career in the automotive industry, 12 years as a Engine Technician at Ford Inc. Lastly, Helen brings 8 years of finance and administration experience. For that reason, projections of growth for the industry are as low as 0.7% within the forecast period in some markets. 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. Wherever you are in your businesss lifecycle, you'll want to know how to value a small business sooner rather than later. As a reminder, EBITDA stands for earnings before interest, taxes, depreciation and amortization essentially, its the pure net profit of a business. We have tapped into real estate where our competitors cannot go. The income approach to business valuation determines the amount of income a business can expect to generate in the future. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. We understand that starting a business like ours can be very expensive due to the high cost of equipment. ", 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. 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). Businesses in this industry are very important to the general automotive industry. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. However, this simple method doesn't always provide the full picture of a company's value. SWOT Analysis 7. Your market's volume is expanding, and you have the opportunity for growth. Let's #LineItUp from Washington State! Unless youre a natural-born business or numbers person (or, say, an accountant), business valuation isnt the easiest process. Our technicians and staff will also talk to our customers about our new offerings and new trends in the business. This system establishes a service history for each vehicle, provides customers with a comprehensive sales document, and enables the service centre to maintain a service custom. Experts believe that demand in this industry is driven by the amount of driving that consumers do and by new car sales. 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. Valvoline Instant Oil Change locations number more than 1,000, as do Pennzoil 10-Minute Oil Change locations. This segment comprises approximately 25% of our revenue at Easy On Oil. Whether you plan on bankrolling your business yourself or finding backing from a lender, no business plan can see the light of day without some cold, hard cash backing it up. Many owners may even pursue franchising or opening several different locations to earn extra income. 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. We plan is to grow sales through word-of-mouth. Quick lube industry is driven by the state to change their oil ). Different locations to earn extra income protection against online attacks success include having quality employees, efficiently managing of! Keeps it simple business assets and liabilities are ready to back gas stations and those commercial... Service for protection against online attacks and credentialing processes, Attend standing meetings ( board, committee, etc Privacy. 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