(IHS Automotive), #22. Learn more about financial projections, income statements, balance sheets and cash flow. He will be charged with overseeing the sales and marketing of Easy On Oil. The remaining are small privately-owned establishments. 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. Familiarity with your industry is crucial for both buyers and sellers. SWOT Analysis 7. 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. Over the past decade, improved technology and extraction techniques enabled industry . She has over a decade of experience in print and online journalism. Easy On Oil will serve the San Diego, California market with four convenient locations and will grow into a business with excellent sales within 3 years. Great reputation and a long history of loyal employee and customer satisfaction. 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. (Business Wire), #13. The higher your SDE multiple, as you might expect, the more your business is worth. Your ultimate valuation should be the result of consistent calculations, so dont mix and match formulas. Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. More than 33,000 firms are currently engaged in the oil change services industry right now in the United States. 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. Our Products and Services 4. Her writing has also appeared in the New Republic, BBC, Time Inc, The Paris Review Daily, JPMorgan Chase and more. 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. (Car Wash Magazine), #5. Competition discounting is a major issue within the quick lube industry at the local level. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or . We plan is to grow sales through word-of-mouth. We will create strong vendor relationships with the most reputable vendors in terms of shipping time of major parts. So, established businesses with stable profitability often use this valuation approach. A convincing business plan will lay the case for why you deserve the capital you need to pursue your goals. Wherever you are in your businesss lifecycle, its important to know how to value a small business. The remainder of the required financing will come from a ten year Small Business Administration (SBA) loan and a short-term loan. At Easy On Oil, we will create a price-to-benefits ratio that puts us ahead of our competitors. Home Business Plans Automotive Sector. 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. Also, the local craft brewing industry attracts an increasing number of visitors for beer tours and the annual San Diego Beer Week in November. Our goal is to capture a majority of the market in little or no time. If youre interested in learning more about the automotive business buying process and how our expert 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. For public companies, annual and quarterly financial reports are typically accessible online. So, most maintenance on electric cars will be more software driven. The keys to success include having quality employees, efficiently managing costs of goods and location, and great customer service. Instead, the two halves work hand-in-hand to create a highly fuel efficient car, especially when driving locally. You'll need a minimum of $50,000 cash as a startup fee. 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. 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. What often separates one lube shop from another is its creative marketing strategies. These could include: helps you make accurate projections for earnings and market growth. Just 29% of vehicle owners take their oil changes to a business other than the dealership where they purchased their vehicle. I also like doing business with a local firm vs. a national chain. This segment comprises approximately 25% of our revenue at Easy On Oil. 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. Joe handled every aspect and obstacle that presented itself throughout the sales Victory Lane includes basic maintenance checks such as flushes and fills, antifreeze and wiper fluids. Plus, its crucial to demonstrate to potential buyers how your business will continue to grow and turn a profit. Along with doing financial legwork, valuing your business also requires you to exercise control over any emotions. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. Executive Summary 3. 1 in 3 vehicle owners decide to change their own oil after purchasing a new vehicle. 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. Note that each of the three co-owners will invest an equal amount. That said, doing the math is free, so go ahead and plug your earnings numbers into different formulas and compare. (Car Wash Magazine), #12. Oil changing services in the United States is an industry valued at $7 billion in the United States. (IBIS World), #2. demonstrates how you make money, be it a subscription-based service, direct-to-consumer e-commerce, or B2B consulting. Often, the site is good, but the former business either lost their lease, got tired of the business, or was operating without a National brand behind them. We will ensure all our employees are properly trained and always ready to provide superior service and create a long lasting trust bond with our customers. About Your Results Our Business location provides us with a vast market and many opportunities. 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. So, most hybrid-electric cars do not ever run on electricity alone. 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. This approach will specifically help you determine an appropriate selling or purchase price based on your local market. Over the long-term, the transition to a more Quick Lube-focused model will make Valvoline a safer and more profitable 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.). Performing services on brake systems to coolant flushes. Examples include: These are all the non-material assets that add value to your business. At Easy On Oil, our mission is to provide fast, reliable, and cost effective oil change and lubrication services for vehicle owners in San Diego, California. The typical quick lube service location will perform about 1,200 service and maintenance tasks in the average month. Snappylubeinc.com Established in 1989. unconditionally recommend Mike and his team. If you want to take the income approach, you can choose between two commonly used valuation methods. 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. Make sure your company checks these three boxes: You make steady profits. Similarly, make sure your business doesn'tcheck any of these boxes: Your current products and services still need reworking. You should also look for business plans that clearly outline processes and, ideally, demonstrate consistent management. Although it is a relatively simple process, a lot of car owners do not want to take the time to do it or do not want to get their hands stained with dirt and oil. Quick lube retailers offer oil changes and routine vehicle maintenance services at lower prices and faster service times. 8 Stalls & Pits! A typical location performs about 1,200 jobs per month. The appeal of a quick lube business is easy to see. This shows potential customers you are open for business and certified by the state to change their oil. At Easy On Oil, weve made plans to create a significantly large regular customer base. Easy On Oil has three partners, Temple Curtis, Aaron Flinch and Helen Primer. Establishing a firm financial foundation will help you maintain realistic expectations about the value of your company (or the company youre hoping to buy). Pre-qualified offers are not binding. 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. The business's cash-flow forecast is adjusted (or discounted) according to the risk involved in purchasing the business. www.ratchetandwrench.com is using a security service for protection against online attacks. Below is a detailed analysis of how we want to spend our startup capital. Victory Lane Quick Oil Change. 72% of operators within the quick lube industry operate one location only. If a synthetic oil change is requested, the price of the oil change jumps to $70.31. 48% of operators within the quick lube industry run a business which combines car washing services with oil changing services. Our partners cannot pay us to guarantee favorable reviews of their products or services. SHOP STATS . Intangible assets are crucial to your SDE multiple, so its important to identify and record their estimated value. (Business Wire), #16. The health of the quick lube industry is tied to the health of the general economy. (NOLN Fast Lube Operators Survey), #23. They acquired 13 Havoline Quick Lube locations in 2018 and 31 Express Lube locations in Texas in 2017. Car owners instead prefer to pay someone else to do it for them. Investigate numbers that dont seem right, and dont be afraid to call in an accountant for extra help. So, established businesses with stable profitability often use this valuation approach. 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. Sellers will need to have the following documentation in order to ensure a smooth valuation process: Licenses, deeds and any proprietary documents. How to Valuate a Business One way to calculate a business's valuation is to subtract liabilities from assets. His expertise in getting deals done is 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. Generating Funding/Start up Capital for Easy On Oil. Our key advantage in San Diego will be the high-quality, rapid, and convenient quick lube service we plan to offer. These are some of the most efficient cars to ever be driven. Operating income for the Quick Lube segment grew from $95 million in 2015 to $153 in 2018, or 17% compounded annually. 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. As a result, the need for reliable and convenient quick lube store has grown rapidly in California. Meredith has worked as a writer and editor for more than a decade. Then, youll add back in any purchases that arent essential to operations, like vehicles or travel, that you report as business expenses. At Easy On Oil, we will differentiate ourselves by not only offering oil change or other automotive maintenance services, but by also providing customers with a stocked lubricant and parts store. 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. 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. This method can be used to value a business for sale as well as raising capital. 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. This is where you come in! Employee outings, charitable donations, one-time purchases and your own salary can all be included in your SDE. Because youre familiar with your own equipment and production, you can make pretty accurate estimates of each of your assets value and depreciation. Our Services are guaranteed to exceed your vehicles new car warranty standards! The most successful owners invest in these practices to deliver the best service for their customers. We plan to make sure we dont ever run out of a specific part, while maximizing inventory turnover. San Diego County hosted more than 32 million visitors in 2012; collectively they spent an estimated $8 billion. 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