Friday, March 27, 2009

Do You Try to UnderCut the Competition

I have seen so many oil change businesses try and do this and it never works. Mobile and fixed companies. They try and undercut the competition. They send out coupons or advertise oil changes for $19.99. A guy tried to start a mobile oil change business up here advertising oil changes for $24.99. What they hell???? How does he think he is going to make a profit from $12 profit per unit. I don't know anywhere where someone can live on that. Even if he were to do ten vehicles per day that would be $120 profit. That's shit. After taxes, fuel, fix expenses, etc that $120 will be more like $80. And is there one, I mean one mobile operator that is consistently doing ten oil change every single day?? Come on, get real. I called this guy up and asked him what was he thinking? He wasn't operating in the same city as me it was in "the suburbs" 30-40 miles away so it was not a competition thing for me. I just wanted to see if this guy was retarded. And his answer was "he just wanted to get his name out there" and "build up a customer base."

Let me tell everyone something. Your business will establish some sort of "brand" for itself. Even if you run a "fly by night" operation, which most mobile oil change operators do, you will establish a name for yourself. You will known as a real business or a cheap discount business that won't be around for long. You pick. I can go out today and advertise $19.99 oil changes and pick up 100s of new customers. But guess what I have learned. Once those customers see that you are willing to work for free.....they are going to come to expect you to keep working for free. They are going to expect that $19.99 oil change all the time. And when you raise your price to your standard price they are going to go to the next guy offering $15.99 oil changes. You can pick up tons of what I like to call "bottom feeders" or people who always want the world for nothing. You can have them. I let those people go to Midas, or Sears, or someplace like that. I love hearing stories of people going in those places for a routine cheap cheap oil change and getting totally ripped off and slapped with a $350 repair bill because they needed blinker fluid and that stuff is really really expensive. Those people never learn and will always go for the cheapest product or service they can find. I do not want them. You cannot build a strong viable business off people like that. Sure you are not going to have customers that will always write you a blank check, though some actually will beleive it or not, but you need customers that are willing to pay a fair market price for good convenient service. That's a foundation.

I picked up this fleet two and a half years ago. I am not going to say their name but it was G$@#&#*# Mechanical. They had 20-30 trucks. Nice sized fleet. It took me a month to get them. I did 15 of them. The owner brought me into the office after we did them. She was complaining about the extra quart I charged them (like when a truck or SUV takes 6 or 7 quarts). She claimed that the quick lubes never charged her for the extra quarts over 5 quarts. "HUMMMM" She also said that Jiffy Lube gives her free oil changes after so many. She also said that drivers say yes to too many add ons. I could go on and on..........

I dropped that fleet like a bad habit. I got paid for what I did do never did any more work for them again. That's how I operate. I do not want cheap bottom feeders. I am not going to run a business like that. I do not work for people who nickle and dime me.

I have another fleet that I love. If something needs to be done I explain what it is and why and he 99.9% of the time tells me to "go and do it." I don't add on all the time but when I do he knows its important. He has never complained once of my prices. He sees me freezing my ass off in the middle of winter doing all his trucks and he respects that.

The few individual customers I do have are ones like the guy I just mentioned. I only kept 10 of the 100s I used to have. Guess which ones I kept?

I got off base. My point is that if you are running a mobile oil change business and you are doing cheap oil changes than you are an idiot and when you go out of business do not complain. You work for free do not expect to profit. Remember that your goal is to make $100/hr minimum. So you have to be smart and find your correct customers. Don't waste your time.

Sunday, March 22, 2009

Mobile Oil Change Profits

I talk to a lot of people during the day and it is woefully apparent that they have no idea about running a business. They are totally clueless and really should not be in business for themselves.

People any business that you are in has to be generating at least $100 per hour for it to be worth anything. That can be off one job or multiple jobs but if your business is not making $100/hr than you will fail. You may think that is high. Actually that's low. You need to make more than that to afford the average American standard of living, especially with inflation or if you live in California, but one hundred dollars an hour is the absolute minimum.

Think that is being unreasonable. I have to send the IRS a check in the mail for my 2008 earnings. Even with all the deductions its $10,000. So self employment and state taxes could take up to 22% of your income. Than you have accounting fees at the end of the year. Then you have insurance. And you need two types of insurance. You are going to need garage keepers insurance and it should be a million dollar aggregate policy and you need a standard auto insurance policy. Don't even get me started on the insurance you need if you plan to have employees for your mobile oil change business. It can be as high as $10-$20 per hundred dollars in payroll. Then you have fuel. Then you have administration costs like envelopes, postage, paper, fax machine, phone, etc. Then you have all the miscellaneous expenses that will pop up every month. And then you have to account for mistakes, no matter how careful you are, to happen. A year ago we had to buy a 2001 Dodge Neon from a body shop we did the oil change for because we put a PZ-19 on the car when we should have put a PZ-21 and the oil filter got hit and oil came out and messed up the engine and we spent another 4,000 replacing the engine and selling it. And I hope that if you have a mobile oil change business you have a partner. I highly recommend not going into this business without two people who are equally committed to making the business work. Two heads are better than one. All the mobile oil change companies that I have seen with one person went out of business quickly. Sure you have to split the profits but believe me its worth it. So you see that per dollar an hour will actually be more like $35 per hour after you factor in everything.

And making at least $100 an hour in some places can be hard. How can you make decent profits when you are doing $20 oil changes. It does not add up. I am really scratching my head at how some people make it in certain states and cities in the "quick lube" business period. The only way I can see people make a profit is bait customers with one price and then push as many add ons as they can once they have the customer. That's the only way. And even with some of those ad ons the profits do not add up in my mind. Maybe someone can fill me in. I cannot figure it out. I know that if you go to Wal Mart now on 3-20-2009 a 5 qt container of Super Tech 5w-30 is going to cost $10. Then you are going to have to spend another $2.00 on an oil filter. That equals $12 for the oil and filter. That does not include fuel and fluids even though most cars at the most will require maybe a dab of brake or power steering fluid. Some will require a good amount of coolant though. My point is that if you are charging 19.99 for an oil change, you are making $8.00 per oil change!??? You can may more money working at Starbucks once you factor in tips. Eight dollars profit?? That's crazy. Even if you charge $25 per oil change that's $13 dollars profit.

So my point is that if you have a mobile oil change business of any sort than you need to be pro fitting $20 net per oil change and be doing five cars per hour that you are working. If you are not than you are wasting your time. That is the only way this is going to work in the long run. Your wife is going to be really supportive for the first year maybe and I do mean maybe one and a half years but if by year two you are not making decent money than she is going to put pressure on you to get a "real job" with benefits. I promise. Like I said I have spoken with a lot of mobile oil change operators in the last 5 years and I have seen many come and go. I know of websites that were put together really nicely and when you call the number on it its out of service. If you cannot make $100 an hour and cannot figure it out than it will not be long before you will go out of business. You are just prolonging the inevitable.

On a side not I am setting up a mobile oil change consultation service for operators. I have several options available. E-mail me at akoilextreme@yahoo.com if you are interested or want some general advice.

Back to profit margins. Its something you really need to think about. Where do you plan to get your business from? What about profit potential? Can you make $100 per hour? How are you going to do it? Which types of vehicles do you want? How do you plan to get them? Whats your presentation? Do you have to proper tools to service the types of vehicles that actually pay? Can you sell? How are you going to learn how to sell? What equipment do you have? How are you going to survive while you are in the building stages of your mobile oil change empire? Do you realize that it will take minimum 1-2 years before you can make a decent profit that you can live on? Is your spouse aware of the extra burden that is going to be placed on her but that if this works she can relax after/ if it takes off?

These are all questions you need to ask yourself.

From 2004-2007 I made absolutely nothing off my mobile oil change business. I gave myself just enough draws to eat and put gas into my car. I lived with my parents. Now whenever I want I can make $6,000 per month and if its the summertime I can make $8-10 per month. I say if I want to because sometimes I don't feel like pushing it and I barely do any work and make $2,000 a month like last month. It was February, dark, cold, and stayed inside and worked on this website along with several others. This month I want to make a least $3,000 so I can pay my taxes off. I could make way more but like I said its Alaska, its cold outside, and I do not feel like changing oil or doing any fleet work 8 hours a day five days a week in 10 degrees with snow coming up to my ankles. The point is that I could. I have the ability because I paid my dues for several years, reinvested all my profits, and now I have a great business. If you are willing to do what I did than your mobile lube business can work. But still in order to work you must set your sights at making $100 per hour minimum. And you can take that to the bank.

Friday, March 13, 2009

Mobile Oil Change Business Course and Consulting

I have been receiving and sending emails over the last several years to various mobile oil change operators giving them advice and tips on how to make this business work. It really bugs me when I see all these people who have started this business and went under in usually several months. Most people started off wrong from the get go.

Here are THREE crucial mistakes that people have made "starting out" in owning a mobile oil change business.

1) Looks are Very Important! You must have a professional looking outfit.

Half of the people who tried to start a mobile oil change company wanted to go the extra cheap way and buy a beat up van or truck and throw some tool and oil pans in the back and start going. I have seen some ugly looking set ups that just scream "fly by night" "mickey mouse operation" or "ma & pops business". I HATE THAT. We want look as professional as possible people. We want to look like a company that's going to stay around for a while. Not one we just started out of our garage one day. This point cannot be emphasized enough. I have seen over 20-30 people make this mistake. If you do not have enough funds to buy or finance a professional looking van then you are not ready to start an on site lube business. I know that this type of business is advertised as a "low cost" start up business but to do it right its really not. You have to have $50,000 minimum to do it right. I started this business when I was 19 and the only reason why I was able to start so early in life is because my uncle who has a lot of money loves and trusts me and basically put up $60,000 for me to START this business. I say start because those were just the initial costs. But you can add as you go. Most of that $60,000 was financed about $50,000 of it and the other $10,000 was cash. Anyway you need at least a later model van like an E-350 or Express Van or Dodge Sprinter (best option in my opinion) to be successful and have nice graphics and a very clean look.

2) You Must Look Professional. Come Across as A Business Man.


You must have a clean cut appearance for optimal results. Tuck your shirt in at all times. Shave. Have nice standard uniforms with your logo and wear it at all times. Carry business cards. Talk clearly. Do not have oil all over your hands and clothes like many mechanics. Look the part. You do oil changes but that does not mean you have to look like a grease monkey. Look as if you make $100,000 per year even before you do. Wear coveralls when doing dirty work and take them off when going into a building. Always be aware of your appearance and how others including your customers perceive you.

3) Trying to Undercut the Competition.

By trying to undercut the competition you cheapen your service. If your customers are not willing to pay a fair price for a great service then screw them. You are not ripping anyone off. What is your time worth? You call a plumber and they come to your house for 30 minutes and you get a bill of $120. Its a service. Why would you charge $15 for an oil change and not make money. If the going rate is $30.00 then at least charge $30.00. If you are smart then you will charge $35.00. This is a premium service. Think of the hassle factor you are saving your customers. If they are smart they will be able to see the benefits in maybe paying a little bit more.

Mobile Oil Change Business Course

I am several weeks away from completing a mobile oil change business book/ course I have been working on. I am not going to sell it cheap. It has taken me months to complete. When you read this book you will know everything there is to know about the business. I will show you exactly what to do to make this business as much of a success as you possibly can. The price will be $599. It will include advice via e-mail or phone.

Email me at akoilextreme@yahoo.com if you want to be put on the waiting list for this course. I will only give out so many per area depending on the size.

Wednesday, March 11, 2009

Oil Change Profit Margins

The oil change business whether fixed or mobile is hard to succeed in. Its not impossible but there are many problems associated with the business model that I find disturbing at best. One of the main problems I see is the lack of profit in the service that most quick lubes are selling. I was down in Atlanta for two weeks and was surprised by the number of establishments offering $16.00 oil changes. One place, I think it was a Toyota dealership went as far as offering a $20 synthetic blend oil change. All I could think to myself is "this is crazy". Those places are actually loosing money off oil changes. Why would any business be in business to loose???

The answer is simple. And this is the flawed business model that I mentioned. The oil change is bait. Like a fisherman baits his hook with a worm or fish eggs so do most quick lubes. They are in the business of pushing extra things you do not need. Many of the extra items that they push you do need but I question the extent. And if the place actually does more than basic maintenance, watch out! Your basic oil change will quickly turn into a several hundred dollar break job, CV joint repair, timing belt replacement, belt replacement, etc. Sometimes you really do need those items. But many times you do not. But those places are obligated to sell you unnecessary items because they are not making money off the main item you came there for.

If places would sell oil changes at a reasonable price then I think the consumers would benifit immensely. If most quick lubes set their prices at a rate that they were making at least 15-20 per oil change than they could make money off 40-60 oil changes per day and then they would not have to resort to less than ethical practices. But you see all it takes is one guy trying to low ball everyone else asking $10 for an oil change and then people flock to him and he rips them all off. Great you got a $10.00 but that was followed by a $350 repair bill and your car is less than two years old. HA HA suckers.....

I say this because its sad but in reality there are only a few states where the market allows quick lube operators to actually make money off oil changes. What I just said is golden. There are 5-7 states that you can make a decent profit from oil changes and nowhere in the south do they lie. Too much competition and cheap labor. I know a person who started an oil change business in Missorri only to find out that the market he was in only beared $15.00 oil changes. The oil and filter were $12.00 Its hard to make money when you make $3.00 profit.

If you listen to this advise it will save you much time and money. For those potential mobile operators who think they can charge a lot more than the going price I say if you can sell...yes but generally no. If you can really sell your service and are a big talker and can instill value to fleet managers I say yes you can charge $10 more than the market. But if you are not than forget it. Most mobile operators I know try to do it for less.

Know your market. Know what it bears. The oil change business do not have high profit margins. They relie heavily on vollume and selling lots and lots of additional services to people even if they do not need them or are unnessary. Remember this. You will be no exception if you live in most parts of the United States. I run my business as honest as one can. Guess what...I can afford to. I happen to live in one of those states I mentioned. There are no $15 oil changes where I live. I pay for it with 6 months of dreadful freezing negative twenty conditions though so do not think its a cake walk. Ever try changing oil in 5 degrees and feel your hand going numb trying to get an impossible oil filter off. I do. But for that trouble I have way higher margins than most people. What does your state, city, area, income level, total market bear for an oil change. Find out and think about picking another business for be in if its under $30-35.

Wednesday, March 4, 2009

Mobile Oil Change Business Reminder Stickers and Branding

Getting the perfect oil change reminder stickers for my mobile oil change business was extremely difficult. It was one of the hardest pieces of information to find.

We started out with NEBS like I bet most people do. Do not use this company. They will a) almost always mess up your orders b) mess up your mobile oil change logo if you do have one or c) come out looking really bad and cheap. I had several NEBS stickers that came in a light blue that you could barely see.

Then I went from the static cling stickers to the oil change reminder stickers that actually stick to the windshield because the other ones keep falling off especially when it got cold. The problem is that these still looked "cheap" and with these you couldn't get them to come off especially when it got really cold. They were almost glued to the windshield.

It took me three years to find the perfect company to supply my mobile oil change business with the stickers I wanted. I wanted my reminder stickers to look just like the ones at Jiffly Lube. In my NOLN magazine they did a poll to see what oil people recognize the most or feel most comfortable with. (Note that these study did not mention the best) Surprise surprise Pennzoil and Quaker State were first in line with Pennzoil owning a little more that fifty percent of the marketplace. If you did not already know BTW Pennzoil and Quaker State are the exact same oil and just come in different bottles and you will see both oils used interchangebley at all Jiffy and Xpress Lubes. Anyway, if most people feel comfortable with the Pennzoil brand guess what logo I want on my oil change stickers for my mobile oil change business........you guessed it.....Pennzoil.


This is the site I use to get the best brand name oil change stickers at the lowest possible price. You can get a roll of Quaker State or Pennzoil oil change reminder stickers for an extremely cheap price. They are the static cling oil change stickers. Here is the contact information that I used:

Sherry Caudle

Administrative Assistant

Communication Graphics Inc.

1765 N. Juniper

Broken Arrow, OK 74012

1-800-331-4438 ext. 235

You can try and call that same number. If she does not work there any longer ask who is in charge of that department. That company does a lot of things including making the actual printer that prints the oil change stickers. They problem is that they will most likely work in your mobile oil change set up. The power needed is going to be too much. It is not impossible to do just most likely not worth it. Once they send you the order form all you have to do is give them your business name and phone number. They will imprint your business information right underneath the brand logo be it Shell, Quaker State, Pennzoil, etc... It looks really professional.

Okay so now you know where to go. This ties right into my other topic: branding.

You do not have enough capital to reinvent the wheel. The wheel can be made better but none of us have the capital to do so, or at least likely to have it. Go with things and brands that people already know and trust for your mobile oil change business. This is one of the main reasons I should have never went with the Oil Extreme brand. Nobody knew about it.

I used Pennzoil and Quaker State and Mobil 1 for my oil. Those are the top three oils that everyone knows and trusts. If you are talking with any customer who uses synthetic oil and they ask you what oil you use say "Mobil 1" and 99.9% of people will be 110% satisfied with that. Everyone loves Mobil 1. Everyone is comfortable with the other two. These companies put 100s of millions of dollars into adversting. Ride them. Don't go with XYZ oil, no matter how good it is, who do not have any brand recognition. You would have to spend millions in climbling that hill. Maybe if you win the lottery.

Again, go with the three major players. Go with Quaker State, Pennzoil, or Mobile 1, whoever is cheaper for your oil change sticker and oil needs. Nobody will complain.

When you are doing diesels go with Rotella 15W-40 or Chevron Dello. Rotella is always the best though. I have found that people who love Dello are equally okay with using Dello if they have to. But I have found that Rotella fans ONLY use Rotella and there is NOTHING you can say to convince them otherwise. And I do mean nothing. Even if they look like they are listening to you they are not and you are wasting your time. "Rotella is the only thing thats ever been in my engine and thats how its gonna stay" I've heard.

The mobile oil change business is hard. Having said that all the obstacles associated with it can be overcome. Low profit margins, weather, cheap customers, market forces, income levels, competion are all things you will have to face. I hope that I have led you all who are serious about this in the right direction. Remember that if you are in business in the US and you do not make at least $100 per hour, and I do not care where you live, you are wasting your time. That may seem like a lot but at expenses and taxes that 100/hr will not be anywhere close to there. Shoot for $30/hr for your mobile oil change business and you are working for free. You just will not realise it until the end of every month when your credit card bill comes or every April when you have to pay 22% taxes.

BWT, this mobile oil change website is complete bullshit and is an example on what to believe or follow