Beyond financial performance, buyers and their advisory teams will dig deeply into the following areas when analyzing any oil change M&A transaction. In the preparatory phase, Calder will work with you to document, highlight, and explain these areas of the business and get prepared for intense buyer scrutiny.

• Supplier Relationships: Reliable relationships with oil and filter suppliers, and the terms of these relationships, are important. Favorable supply contracts can contribute to lower operational costs and better profit margins.
• Quality of Equipment and Technology: The condition and age of the equipment, such as lifts, tools, and oil storage systems, are critical. Modern equipment and technology can improve efficiency, whereas outdated or poorly maintained equipment can lead to increased costs and downtime.
• Workforce and Talent: Buyers will evaluate the skills, experience, and expertise of the workforce, as well as any key personnel or management team members. They will also consider employee contracts, compensation structures, labor union agreements, length of service, and potential risks related to labor shortages or turnover.
• Regulatory Compliance and Environmental Concerns: Oil change businesses must adhere to various environmental and safety regulations, including waste disposal and recycling. Compliance history and any potential liabilities will be thoroughly investigated.
• Operational Efficiency: The effectiveness of current operations, including staff proficiency, workflow, equipment condition, and inventory management, impacts the business's bottom line. Buyers will assess whether the business operates efficiently or if there are areas that require improvement.
• Market and Competitive Analysis: Buyers will analyze the target company's position within the oil change market to understand the competitive landscape. They will evaluate market trends, the company's reputation, competitive advantages, potential threats, and opportunities for growth or expansion.
• Location and Accessibility: The business's location is crucial. Ideally, it should be in a high-traffic area with good visibility and easy access for vehicles. Proximity to complementary businesses, like car dealerships or auto repair shops, can also be beneficial.
• Reputation and Customer Base: A strong, positive reputation and a loyal customer base are invaluable assets. Buyers will assess online reviews, customer feedback, and the business's standing in the local community.

There are a few reasons why oil change businesses do not sell, and Calder has worked diligently to eliminate these primary obstacles to selling.

The number one reason that oil change businesses do not sell is because there is a significant gap between what the seller wants and what the market provides in terms of valuation. Calder eliminates this by conducting a thorough “market-informed” business valuation before we ever ask for a client engagement. Because we sell 40+ businesses per year, we have an accurate pulse on valuation multiples, deal structure, and the state of the buyer pool. We combine our proprietary on-market data and insights with thorough research utilizing trusted valuation resources for businesses that match your specific niche and financial performance. The result is a precision valuation analysis that reflects the market feedback you will receive from buyers if you decide to proceed with a sale process.

At this point, it is 100% up to you whether to move forward with a sale process. If the valuation is not where you need or want it to be, Calder can point you to resources that can help you to improve your valuation or we can all simply wait. Sometimes, oil change business owners decide to wait 1-2 years before selling once they understand what drives valuation. At no point during our initial valuation process will you feel compelled to make a decision that is not in your best interest. Calder Capital is in it for the long game, and this means standing shoulder-to-shoulder with our prospects and clients and helping them to make the best decision for their businesses and lives.

The second reason that oil change businesses do not sell is the quality of their financial records. When buyers and lenders are making critical decisions to pay and loan, respectively, millions of dollars, it is critically important to them that they can trust the information that they are receiving from the seller. Periodically, we receive information from oil change business owners that contains errors or is not prepared to the accounting standards that buyers expect. During our business valuation exercise, if we identify areas where buyers are likely to be confused or have questions, or we encounter impasses with respect to obtaining the types of financial records that buyers and lenders will expect during the analysis and due diligence phase, we will discuss these with you and help you work with your CPA or other accounting advisors to prepare the business appropriately for the type of scrutiny that a sophisticated buyer will bring.