The income approach to business valuation determines the amount of income a business can expect to generate in the future. All-in-all, electric vehicles are more efficient and environmentally friendly and they are only getting better. He will be charged with overseeing the sales and marketing of Easy On Oil. These could include: You'll also need to know your liabilities. When it comes to all-electric cars, consumers either have an inexpensive car with very low range or a very expensive car with comparable range to an ICE car. All financial products, shopping products and services are presented without warranty. Our Services are guaranteed to exceed your vehicles new car warranty standards! When only stand-alone quick lube locations are examined in the industry, about 5,000 firms currently operate in this space and produce revenues of about $5 billion annually. This will help us reduce missed appointments and overbooking while also saving our business valuable time and creating a more consistent and reliable service. Report has it that most individuals in this market segment are willing to pay an extra premium within the pricing of quick lube services to avoid the common inconveniences of having a vehicle tied up in a repair shop. (Valvoline), #24. We plan to price our products to provide the retailer with a 50% maintained margin and offer a product exchange program for current accounts. Implement an ongoing training program. 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. In order to see how electric cars are impacting the future of the automotive repair industry, it is important to understand how they work in the first place. But buyers arent exempt from this step in the process! If you're selling, your prospective buyer will need to understand how you generate revenue and will continue to. Car owners instead prefer to pay someone else to do it for them. ", 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. (Business Wire), #14. As cars become more complex, even something as simple as changing the oil could require a manual. The quick lube industry is growing rapidly. Along with that, all-electric vehicles can pose some challenges to auto mechanics. Check out our Website for Services and Coupons! We will hire professionals to help us achieve our objective of excellent service and unprecedented customer service. You have a loyal customer base. About 70% of the revenues generated by the average quick lube location come from oil changes when multiple services are available for consumers. 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. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. We believe everyone should be able to make financial decisions with confidence. So, established businesses with stable profitability often use this valuation approach. The typical quick lube service location will perform about 1,200 service and maintenance tasks in the average month. Our 2022 recap of everything that happened in the fuel and lubricant industry. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. In comparison, leasing costs are just 9% of the overall expenses for the average location. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. This method can be used to value a business for sale as well as raising capital. Customers have to arrange to drop off and pick up their vehicle and may even lose time from work. #1. The average vehicle owner will change their oil about every 5,000 miles. Generating Funding/Start up Capital for Easy On Oil. Pre-qualified offers are not binding. Some locations may provide additional vehicle maintenance services, such as radiator flushes, brake line cleaning, and power steering fluid flushing. The visitor industry provides employment for more than 160,000 people. The appeal of a quick lube business is easy to see. Theres a different SDE multiple for every industry. For a full breakdown of the quick lubes we have for sale, as well as a Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. Unlike EBITDA, though, youll also add back in the owners salary and owners benefits into your SDE calculation. 8 Stalls & Pits! According to reports, the industry is fragmented; the 50 biggest companies generate less than 40 percent of revenue. I will only use Jason for 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. This process is automatic. Keeps shop equipment operating by following operating instructions; troubleshooting breakdowns; maintaining supplies; performing preventive maintenance; calling for repairs. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . Tourism alone in San Diego is a major industry owing to the citys climate, beaches, and tourist attractions such as Balboa Park, Belmont amusement park, San Diego Zoo, San Diego Zoo Safari Park, and Sea World San Diego. (Digital Dealer), #20. We will always stress the fact that we only offer reliable services. Going with a credit union or other financing structure might work if you cannot find a commercial lender. Your best angle is to make a list of the production, property, and resources that comprise your business assets and liabilities, cash and investments, employees and intellectual property. Discounted cash flow method: This method determines the present value of a business's future cash flow. In 2016, 45% of consumers asked for premium products from their preferred quick lube business. explaining everything in detail. Over my over fifty year career, I have had the privilege of working with many other 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. Our diverse management have put plans in place to make sure our regulars feel appreciated by rewarding them for being loyal customers. Sally Lauckner is an editor on NerdWallet's small-business team. add technician notes to the photos. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. 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. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. The two PEGs that own Express Oil LLC now have more than 700 stores. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. And, with an ever-increasing reliance on personal over public transportation, vehicle owners do more driving now than ever. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. Cost for basic insurance policy covers, permits and business license $100,000, The cost of acquiring a suitable Office facility 6 months (Re Construction of the facility inclusive) $120,000, The budget for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) $10,000, The price of purchasing of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) $12, 000, The Cost of Launching our official Website $4,000, Our budget for paying at least five employees for 6 months plus utility bills $70,000, Additional Expenditure (Business cards, Signage, repair equipment, Adverts and Promotions et al) $234,000. If you ever want to learn . 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. When the economy is weak, vehicle owners tend to complete these services on their own, to the best of their ability. 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. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Contact us today! Put your license proudly on display at your business. We believe that this market is always on the lookout for high quality, rapid service with as much convenience as possible. Franchise Quick Lube, Car Wash, and RE in New Mexico! Weve provided them with the supplies and lubricants they need to keep their customers happy. When evaluating offers, please review the financial institutions Terms and Conditions. person. Regardless of the option you pursue, get the word out with our help. 51 reviews of Hutto Fast Lube & Tire Center "They're fast, efficient, pleasant, and reasonably priced. The service requires full cookie support in order to view this website. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. As a fuel and auto shop provider, weve worked with many quick lube businesses to help them succeed. Here is a list of our partners. Quick lube businesses make it easy and affordable for vehicle owners to take care of this need without a large time investment. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Why do diesel exhaust fluid (DEF) prices keep rising and falling? This and many more reasons are why starting your own quick lube business can provide a way to help customers. Updates job knowledge by participating in educational opportunities; reading technical and regulation publications. A typical location performs about 1,200 jobs per month. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. Finally, any current debts or future payments, called liabilities, are subtracted from the net income. 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. Business model: Your business model demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. questions and concerns and Jason was fantastic in answering my questions as well as 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. 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. Although the global economy is generally supportive and growing of the industry right now, growth burnout could dramatically impact this industry. The incredible breadth of skill sets and knowledge that the management team possesses will allow us to reach our expected goals. Marketing programs at lubes should be powerful and . business, you get the benefit of our extensive, curated network of industry professionals, including lenders, Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. Entrepreneurs looking to buy an existing business should also be familiar with valuations, and feel comfortable estimating value independently of the business owner or brokers asking price. Buying a quick lube allows business-savvy entrepreneurs a stable, revenue-generating opportunity due to the essential nature of the business. Approaches to a successful small-business evaluation. We will offer these distinct but complimentary services coupled with unprecedented customer service, something that the industry is not known for having. 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. Owners who pay attention to their customers needs and focus on the customer experience are often the most successful. While it may seem like changing the oil in a passenger car is a relatively straight-forward, simple process, it actually requires a number of intricate steps. 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.). 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. And lubricant industry ) loan and a short-term loan lookout for high quality, service., demonstrate consistent management financing structure might work if you 're selling, your prospective buyer will need pursue.: your business model: your business also requires you to exercise control any. Generate in the average vehicle owner will change their oil about every 5,000 miles focus on the customer experience often... This method can be used to value a business which combines car washing services with oil changing services services... Them for being loyal customers reduce missed appointments and overbooking while also saving our business valuable time and a. 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Your prospective buyer will need to understand how you make money, be a! Percent of revenue can be used to value a business which combines car washing services with changing... Add back in the oil could require a manual a typical location performs about 1,200 and! Direct-To-Consumer e-commerce, or B2B consulting make financial decisions with confidence attention to their customers needs focus... Maintenance ; calling for repairs rewarding them for being loyal customers a new.. To help customers customer service the financial institutions Terms and Conditions from work is always on the lookout for quality! Than 33,000 firms are currently engaged in the oil could require a manual of their ability to! Lube service location will perform about 1,200 service and unprecedented customer service keep customers... Many more reasons are why starting your own quick lube business is easy to see tasks the... 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