Make a Splash With Your Acquisition
Congratulations, you’re ready to acquire a quick lube shop!
Whether you’re new to the business or growing your empire, there are a few things common among operators: they’re driven, and they know that their success is tied to the customer experience. Beyond that, you’d better be able to adapt to thrive.
John Wall had worked on the corporate side of the automotive aftermarket for a decade before transitioning into quick lube ownership. He had everything worked out—or so he thought. He worked out a business plan around moving home to Ohio and building a shop to his specifications.
“I came back to town and was getting ready to follow through with building,” Wall says. “I was getting all my ducks in a row and one of the local operators decided they were retiring.”
That was a big pivot for Wall, but it ended up being the right choice, he says. He decided to take over the existing property. It comes back to adaptability—operators with the tools to succeed will be well-equipped to take on new challenges and rise above them.
With the experience of two operators and the help of an expert business planner, here are the fundamental areas of focus for operators in their new shop acquisition.
Focus No. 1: Property
This is your main asset. Think of it as a tool—a Swiss Army knife that allows you to develop a workflow, attract customers and guard assets.
The best tools also save you money. In the case of Wall, who planned to build a new shop but ended up acquiring an existing quick lube from a retiring operator, the initial investment changed dramatically.
“It ended up saving me at least $500,000 to buy their location, which is a good chunk of money,” he says.
Wall has been successfully operating his acquired shop, Checkered Flag Express in Marysville, Ohio, ever since.
Build new or acquire existing? That’s a major decision in launching a quick lube. While Wall saved money by acquiring rather than new construction, there were benefits to a new shop that he would have enjoyed. He says that he was able to hand-pick the location of the new construction, which had all the drive-by traffic he aimed to get.
Wall determined that his existing location might have less traffic, it was still known well enough by area customers.
Any operator who’s acquired an existing quick lube knows that there can be a lot of work needed to bring it up to speed.
Steve Pittman runs PittStop 10 Minute Oil Changers in North Canton, Ohio. He took over an existing shop that was in rough shape. His biggest task was cleaning up the building which was the first step in cleaning up the shop’s perception.
“Just giving the place a facelift,” he says. “The biggest thing when you have a place like that, that maybe doesn't have the best reputation, you want to do what you can to get the information to people that it’s different this time.”
Focus No. 2: Business Plan
Tim Berry wants business plans to be most useful to the owner. He’s a business plan expert, author, speaker, and founder of Palo Alto Software, which develops digital platforms for startups and business planning.
He wants owners to think of business plans not as a long-winded prospectus to present to investors. Rather, it should be a simpler document that outlines what you consider success along the way. The plan should be checked against your work regularly and be revised as you hone your operation.
“With the process that I recommend for all business owners, you’re going to start with a very lean, streamlined plan that’s written for yourself only,” Berry says. “So no extra work of describing your team or describing your services for some outsiders. Just bullet points laying out your key strategy and your tactics and your milestones that you want to reach.”
The plan ensures that your operation is working toward the goal that you’ve outlined. The guideposts along the way are a mixture of real figures and conceptual goals. Berry says that the bullet points should still encompass all of your operations. That includes broad topics like services offered, sales goals and market information. It should also have more specific strategies to carry out those objectives—how you and your staff will achieve your goals.
“For these business owners, every time they refresh their lean business plan, they look at execution as a collection of concrete things,” Berry says. “Specific things that are supposed to happen. I call them major milestones.”
The key to this whole plan is that it’s being constantly revised. That’s a sign of success, Berry says. That means that your first projections might be educated guesses at best. After a few months in business, it’s time to revise and refocus. The next milestones will become more accurate and more ambitious.
That way, you’re being proactive toward your goals rather than reactive to the day’s challenges.
Berry’s company, Palo Alto Software, launched in the late ‘80s. He says that his leadership team has held monthly business plan revision meetings since then.
“That many years later, our business plan has never been finished because if your business plan is finished, your business is finished,” he says.
Focus No. 3: Brand
Your brand is your most important intangible asset. For new operators, it’s an incredible challenge to build a brand that’s recognizable and trustworthy to customers.
When Pittman acquired his shop, he decided to rebrand it as PittStop 10 Minute Oil Changers. He says the shop didn’t have a stellar reputation in the past, and he had an uphill battle to win back those customers. Before he even saw customers, his messaging to the public focused on how he would improve operations. His people greeted customers at the adjoining car wash. He advertised new ownership on his digital sign.
Pittman says that was the most challenging part. When customers did arrive, Pittman let his service do the talking.
“You're going to have customers trickle in,” Pittman says of those early days. “And if you can take those customers and give them the best experience, make it as enjoyable and honest as possible, then you get people talking.”
When Wall took over his shop, he kept the name—Checkered Flag Express. But the previous owner was using unbranded “house oil” and filters. Wall changed that and signed a deal with an oil distributor, adding the national name to his signage. To Wall, that can be a beneficial part of a quick lube’s brand, whether it’s independent or franchised.
“It worked out fantastic,” he says. “People wanted a brand name. They felt better paying the same for an oil change and the quality of product increased.”
Focus No. 4: Market
The market is where your customer base lies, and tailoring your business to the market gives you a big advantage.
Researching the market is key to making your shop fit the area. There are lots of ways to do this. Many companies in the franchise space will work with franchisees to study and analyze the market. For independent operators like Pittman, the task fell upon him.
Pittman says that his goal was to know more about who he was serving. The information he researched—mostly online—told him the median age groups, the gender splits, the population densities and more.
He says the income information is among the most valuable.
“If you know, roughly, the median income of families that live in your area, I think you’re better able to get a grasp on the type of cars they would buy. The types of services they would perform on those cars. What they can afford,” he says. “You tailor the services that you offer and the prices that you offer to those customers.”
What else is in your market? Your competition.
Pittman says that his nearest competition is half a mile away. He made it a point to go there, learn about their customer experience, their prices, and anything else he could understand about the business.
“What I was able to do was take my information, my services, my pricing, my everything, and tailor it around being able to beat them,” he says.