Debating opening Fast Lube/Oil change

[William Wallace]

I have an opportunity to clean up and develop a business at a five bay service station that has been family owned and (for all intents and purposes) idle for a few years:
2x2 bay layout on one side of office and 1 single bay on other side of office:
2 bays back to back with pit that runs the length of both bays
2 bays back to back, 1 with older lift, other without for general repairs
1 bay on opposite side of office with newer lifted

GOOD:
1) Prime location, 1 lot over from intersection of 2 main streets. High traffic flow, High density area in city of 90,000 people. ~75' street frontage.
2) low operating expenses: Building is debt free, building upkeep is minimal.
3) lot in front of building is ~75' x 30', able to queue up quite a few cars. lot in rear of building is similar in size

BAD:
1) Needs massive cleanup, tons of junk from the olden days have cluttered the place
2) office needs a cleanup and rehab
3) Exterior needs to TLC

Closest competition is a Grease monkey 1.6 miles south on the same road , and a Pep Boys 3.6 miles north on the same road.

At first glance it looks like this could be a viable business?

I would need to toss some cash at:

a) filters (ball park figure to stock up enough to get started?)
b) gallons of oil, possibly 2-3 different brands/qualities
c) ?? oil extractor?
d) what else?

 

[Whale of a Wash]

Next to one of my washes in MN a Jiffy Lube just closed after 10yrs. The car dealers are offering really cheap changes to find shop work. I Just got an offer in the mail, Buy one oil change at $30 and get 3 free. It doesn't seem like any money in that business around here. The major car dealers are fighting for customers, and in our area the walmart takes the rest of the customers. I would grab a sandwich and sit by the grease monkey , and see how much business they do on a busier type day, and then get your oil changed at what you believe will be your competition, and see if they are providing a good service. By watching and evaluating the competion and their customers it will help with your questions.

 

[TheDoc]

Braveheart<

I'd be wary of opening a fast lube anywhere right now, regardless of the economy. As I've mentioned to numerous people that I work with in the industry, it is getting harder to beat the dealers at this game and with new service intervals being monitored by on board systems, why bother.
Both of my vehicles (2007 & 2008) have oil life monitors, TPMS, transmission sensors, etc.
The old "3 months/3000 miles" age is over! Jiffy Lube is having a hard time with it and unless you're a really great lube operator with an existing business, I'm not sure how to put this option on the "black ink" side.
I know that in a city, there may be demand, your location as noted is Easter Mass. but where are you exactly going to be, what other businesses will bring the much needed volume to you to perform services? When coupled with a wash, it becomes easier to pick cars out and offer an incentive to get the lube done.
I don't mean or intend to bash the idea, but if the location needs a bunch of work and you need to start from point 1 with nothing there, then I think the best bet is to really work out a plan and talk with others who have a stand alone lube shop.

My thoughts & opinion,

Steve S.

 

[William Wallace]

Next to one of my washes in MN a Jiffy Lube just closed after 10yrs. The car dealers are offering really cheap changes to find shop work. I Just got an offer in the mail, Buy one oil change at $30 and get 3 free. It doesn't seem like any money in that business around here. The major car dealers are fighting for customers, and in our area the walmart takes the rest of the customers. I would grab a sandwich and sit by the grease monkey , and see how much business they do on a busier type day, and then get your oil changed at what you believe will be your competition, and see if they are providing a good service. By watching and evaluating the competion and their customers it will help with your questions.

I plan on staking out the grease monkey for a few hours each day to see what the traffic flow is.

Im not sure how the numbers are going to work out. There are a few small shops that advertise "19.99" oil changes. They must be barely able to cover the material costs.

 

[William Wallace]

Braveheart<
... omitted to save characters...
Steve S.

Hey Steve, you bring up a bunch of valid points. I needed someone to pick apart my thinking before I jump in. A $19.99 oil change nets a couple dollars at most after material cost. I can't imagine why the small guys would even bother. I would need to upsell lots of wiper blades, headlamps, air filters, etc in order to get that to a decent level. I have to investigate how much I can reduce costs by buying in larger quantities.

My main 'volume' would be due to passer-bys on the main drag, mostly people sitting in traffic waiting for the light to change.... a redo of the exterior, a cleanup of the front yard, and some new signage. Also, the oil changes will possibly bring in new customers for the repair business.

Here is what the property looks like, outlined in red:


I've been out of work for almost 3 months, so this has thus far been a side project while I look for a job. Most of the work I've been doing is cleanup and fix-it work. It seems like a huge waste for such a property to go to waste, esp in such a good high density, high traffic area.

I need to look into the car wash startup costs. I was interested in lube because it was cheap $$ to start and I could fund/run it out of pocket.

There is a drive through wash about .5 mile away westward (always busy), a large self serve maybe 7 miles away southward, and another 4 miles northbound on the same street.