If you’re a car enthusiast who wants to own a business, buying an oil change shop can offer significant benefits on top of being your own boss. Automotive businesses offer essential services that are always in demand, and with the drive to achieve the knowledge and training you need, you can go far, no matter what prior experience you may have in the industry. Plus, at the start of 2024, the oil change market anticipated fast growth and development

That said, maybe you’ve been in the industry for a while and you’re on the other end of the spectrum: retirement, a new career, or maybe an economic decision. Whatever the reason to sell your oil change business, this article is for you. 

Now is a fantastic time for oil change business owners to sell their companies and complete their exit strategies. If you’re holding back because you’re not sure what yours is worth, let us guide you closer to accurately valuing your oil change business. 

Several key factors will affect how the business is valued, including the fact that the industry is set to continue growing. At AutoCenter Sales, we have a thorough understanding of the complexities of this process – we have 25+ years of experience and upwards of 1,700 auto centers sold.

Consider these factors and solid strategies from our experts, and reach out if you’re interested in taking the next step to sell your automotive business. 

What Factors Influence the Valuation of an Oil Change Business?

The most efficient and comprehensive approach to valuing your oil change business involves several factors, including financial performance, marketing conditions, and industry trends. 

Here are several important methods to include.

Asset Valuation

Simply broken down, this means you're evaluating the value of your business based on its intangible and tangible assets. You need to take into account the net book value of items like intellectual property, equipment, and property to give you a conservative estimate of the overall value for prospective buyers.

Company Analysis

Analyze the financial metrics of other companies that compare to yours. This will estimate how your value can be derived and give you a benchmark because it offers a relative assessment as a starting point.

Discounted Cash Flow Analysis

The discounted cash flow (DFC) analysis estimates the business's value based on future cash flow projections. It accounts for time value in accordance with money and gives you a better picture of your business's potential profitability.

The Role of Market Trends in Determining Business Value

Market trends will also affect value, and taking the time to make a comprehensive assessment of these trends can give you insights into actionable steps that you can take to leverage your company and outperform others. 

Consider the business value, understand market dynamics, and incorporate industry trends to fortify and sustain your value.

Avoid Common Mistakes in Valuing Your Oil Change Business

While you want your information to be as exact as possible, there are some mistakes business owners make when valuing their oil change business, and the most common ones we found include the following.

Flawed Models & Projections

Your valuation will depend heavily on which model you use. The three main approaches are assets, income, and market. 

While there are various methodologies under each one that can be applicable, you also need to include the following:

  • Off-balance sheet liabilities

  • Non-operating assets

  • Non-financial consequences of selling

  • Level of risk and resolution for them

Not Investigating Mathematic Errors

Math errors will cost you, and any errors that occur early in the process can create incorrect assumptions. Always take your time, recalculate and reanalyze the values, or work with an expert so you know the final valuation is correct.

Applying the Wrong Standard of Value 

The standard of value is the measure of how the business is going to be appraised, and you should always have this set before you start.

  • Fair market value is the expected selling price that a seller and buyer will agree upon.

  • Investment value is based on the business's earnings, present and future.

While there's no specific right one, they will affect your bottom line, so make sure you have support for your decision.

Selling Your Oil Change Business? AutoCenter Sales Can Help.

Whether you're trying to sell an oil change business or car wash, you need to make sure your business valuation is done correctly so you get the most money possible. Navigating all the steps can be confusing, and when you need an expert in the business, AutoCenter Sales is here to help.

Our knowledgeable team has been helping customers for over 25 years. Whether you need help with business valuation or you're looking for commercial properties for sale, we offer a full analysis process that's unmatched in our industry.

Setting up an appointment is easy: Reach out to us online or call 800-874-5793 today.