If you wish to step foot into this world as an entrepreneur, then exploring the potential of the oil change field wouldn’t be a bad choice. It is indeed a lucrative field if you set it up with a proper plan in mind.
First thing to explore is the feasibility; if you set up your oil change business in a big city like Los Angeles then the market is wide. However, if you set up this business in a barren place that has no oil companies around then it would be bound to failure.
Besides, the location of your business should have certain resources present in the area. There are dangerous items used in oil change hence the location should be present in an industrial area with proper zoning laws in place.
To streamline the process for you, we have listed down the 8 steps through which you can start your oil change company successfully. Keep reading till the end.
Steps for starting an oil change company
Setting up any business in general is not an easy task. However, with the right guidance and proper planning you can make the process much simpler. Here are 8 easy steps using which you can start your oil change company.
- Come up with a legal foundation for your company
According to the requirements of your business you can set up your business as one of the following:
- full corporation entity,
- in form of a partnership,
- liability company,
In case you cannot figure out the legal framework, consult with a corporate lawyer and streamline everything beforehand. Later on you can avoid severe taxation and liability issues. Also come up with your company’s name and find out if your chosen name is available or not.
- Decide a feasible location for your business
It would be ideal to select a location that has been leased for an oil change business. However, you still need to see whether the city has effective zoning laws or not. There are high chances that a previous company left the place due to improper zoning laws.
Hence it is important to settle these issues beforehand. Also decide whether you will buy the place or get it on lease. It is preferred to sign a long term lease in case you cannot afford to buy the location.
- Find insurance companies and get your insurance
You must get in touch with various insurance companies and get insurance plans. Different companies offer various premiums on insurance so it is wise to have multiple options at hand. You will get smart financing options this way as well; your insurance may fund the purchase of your location as well.
- Calculate the initial required start up cost
There is a wide list of inventory that you need to purchase for your oil change business. This includes oil, cleaners, transmission liquids, brake oils, washing tools and other equipment. Customers generally purchase all these items.
Then you need to make a list for your shop supplies such as uniforms for your staff, disposal tanks, tool boxes and other essentials required at the shop.
- List down the required equipment for your business
The items in this list will totally depend on the type of location you have purchased. If you are setting up a new place you practically need everything. However if you have leased out an old oil change place then you may not need to purchase everything from scratch.
The equipment would include oil flushing machines, oil tanks, radiator flushing tools, buckets among other items.
- Hire a well educated and experienced accountant for your business
The amount of cost that an accountant would charge you is highly variable. It would be prudent to consult multiple options and then hire the one who fits your budget. A major chunk of this decision depends on the type of company you are planning to set up. You need to figure out the details of your compensation.
Consult with your lawyer and accountant both to figure out the taxation details for different kinds of entities and all the procedures on how you can compensate yourself in the business.
- Determine the amount of capital you need
This is one of the most crucial steps during your business set up. Calculate the total capital you would require for purchasing or leasing out the location or the money for the rent including the security you need to pay. Then add the cost of all the inventory and shop supplies.
It is important to come up with a proper business plan especially if you are applying for a loan. The bank would demand a detailed review of every penny you would use. You also need to keep the budget aside for marketing and advertising. Also calculate the potential profit you will make on each customer and determine the process of balancing your business accounts.
- Finally buy or lease out your selected business location
Get the registration of your business done with your state secretary of state and your license of operation from the relevant authorities. Then get your business insurance and sign all the documentation.
The final job is to hire and train your staff!