You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your mobile oil change. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a mobile oil change?
The startup costs to open a mobile oil change business are fairly low because these businesses don’t have a brick-and-mortar location. It’s possible to open a business with between $2,000 and $10,000. This capital goes towards:
- Oil and other fluids (e.g. windshield washer fluid, antifreeze, etc.)
- Oil filters and other parts (e.g. lug nuts, air filters, etc.)
- A vehicle (a van, or a truck and trailer)
- An oil-dispensing system (hoses and pumps)
Business owners that are on a limited budget can reduce their vehicle expenses by purchasing a used van. They also can forgo the oil-dispensing system, instead manually opening bottles of oil and pouring them. Finally, business owners can limit their oil, fluid and filter expenses by purchasing the supplies they’ll need each morning before they begin driving to customers’ sites.
What are the ongoing expenses for a mobile oil change?
The ongoing expenses for a mobile oil change business aren’t outrageous, but they also can’t be ignored. Fuel, vehicle maintenance, oil and parts must all be paid for.
Who is the target market?
The target market for a mobile oil change business is both private and commercial automobile owners. Rental car companies and fleet owners are especially lucrative customers, for working on their cars reduces how much time is spent traveling between locations.
How does a mobile oil change make money?
A mobile oil change business makes money by charging customers for changing the oil in their vehicles. Most oil changes also include a few basic other services (e.g. topping off fluids, inspecting brakes, etc.).
How much can you charge customers?
Most oil changes cost between $20 and $55, depending on where they’re done. Mobile businesses can charge on the higher end of this range because of the convenience they provide. Business owners might, however, want to offer a slightly lower price (e.g. in the middle of the range) when multiple vehicles need oil changes.
It’s common for businesses in the industry to offer additional basic services that increase the total cost of an appointment. Some such services include brake repairs, fluid top-offs and air filter replacements.
How much profit can a mobile oil change make?
A fully booked oil change business can earn an annual profit of six figures. For example, assume a business does two oil changes per hour and charges $50 per oil change. Working 40 hours a week, 50 weeks a year the business would bring in a revenue of $200,000. Not all of that is profit, but a lot of it is because there’s no building to maintain.
How can you make your business more profitable?
There are multiple ways a mobile oil change business may increase its profitability. Businesses can get into basic auto repairs, heavy equipment oil changes or farm equipment oil changes. It’s often cheaper for construction companies and farmers to pay a mobile service that will come to them than to drive large equipment to a garage.
Some businesses also earn a profit by receiving referral fees for recommending local auto repair shops to customers who need more significant work done on their vehicles.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your mobile oil change is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an oil change business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
To avoid liability and potential lawsuits, oil change businesses should have their clients sign waivers.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a mobile oil change
The two most effective ways to market a mobile oil change business are by including a sign on the business’ vehicle and cold calling. Just one successful call to a corporation that has many vehicles or employees (who have their own vehicles) can a sizable amount of repeat business.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Mobile oil change businesses set themselves apart from quick lube places by offering unsurpassed convenience. To keep customers coming back for oil changes, the level of service and the convenience provided must not be compromised.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Mobile Oil Change In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Anyone who is passionate about cars and enjoys working with their hands may enjoy spending their days working on customers’ cars. It also helps to have people skills, for business owners regularly talk with customers about the condition of their vehicles.
This is a business that people can start part-time, while working another job. Appointments can be scheduled during evenings and weekends, or whenever not working at the other occupation.
What happens during a typical day at a mobile oil change?
A typical day at a mobile oil change business consists of:
- Scheduling appointments
- Driving to customers’ locations
- Changing the oil on customers’ vehicles
- Performing other automotive services
When not engaged in these activities, business owners place orders and restock supplies.
What are some skills and experiences that will help you build a successful mobile oil change?
Mobile oil change business owners must possess a knowledge of how cars work. They at least need to know how to change the oil in different vehicles, and having a more robust automotive knowledge is beneficial.
Business owners who don’t have experience working on cars may want to enroll in an automotive course at their local community college or vocational school. Online courses, such as those offered by Ashworth College and Bergwall, can also be helpful.
Alternatively, business owners can work in the industry prior to opening their own business. Many mechanics have primarily on-the-job training, although these mechanics normally don’t have any certifications to demonstrate their expertise.
What is the growth potential for a mobile oil change?
A mobile oil change business can remain a small operation with just one or two people. Or, it can grow to become a large company that offers services in multiple geographic areas.
TRUiC's YouTube Channel
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a mobile oil change?
Customers who use a mobile oil change business do so for the convenience. They don’t want to be kept waiting for appointments, so it’s important to show up on time.
Business owners should avoid over-booking themselves. While it’s tempting to fill a day full of appointments, this can make owners run behind schedule and aggravate customers. For a new business, upset customers can devastate growth.
How and when to build a team
While it’s possible to run a mobile oil change business with just one person, hiring an employee from the outset can help the business grow. An employee can schedule appointments while the owner focuses on servicing cars. When not scheduling appointments, the employee can help with oil changes to speed them up.