How to Start an Oil Change Business

An oil change business keeps neighbors' cars maintained and on the road by offering regular services such as oil changes, windshield wiper replacement, and air conditioning recharging. Speedy service with a smile and competitive pricing encourages your customers to come back the next time.

Learn how to start your own Oil Change Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services.

Start an Oil Change Business by following these 10 steps:

  1. Plan your Oil Change Business
  2. Form your Oil Change Business into a Legal Entity
  3. Register your Oil Change Business for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your Oil Change Business
  6. Get the Necessary Permits & Licenses for your Oil Change Business
  7. Get Oil Change Business Insurance
  8. Define your Oil Change Business Brand
  9. Create your Oil Change Business Website
  10. Set up your Business Phone System

We have put together this simple guide to starting your Oil Change Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

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:

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Oil Change Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability.

It's very important to secure your domain name before someone else does.

Want some help naming your Oil Change Business?

Business Name Generator

What are the costs involved in opening an Oil Change Business?

In order to get off the ground, your largest investment will be for the equipment in your garage bays. Expect to invest at least $250,000 for a two-car facility, initial training, and media launch for your location. Multiple franchise opportunities can help you corner the local market and provide assistance for your initial growing pains.

What are the ongoing expenses for an Oil Change Business?

The equipment in the garage such as lifts and pumps must be maintained by a qualified service company. You will need to maintain a stock of a variety of oils such that you are able to service even an uncommon vehicle from time to time. Filters, gaskets, and other expendable parts must be kept in inventory as well. It will be important to have a highly trained automotive technician on the payroll that is able to properly supervise less experienced workers, who may be just starting out on their automotive careers.

Who is the target market?

Everybody who drives a car is a potential customer. The most lucrative areas are situated at the edge of urban markets, as suburban families own more vehicles and will spend money on simple services. Rural markets have fewer customers available, and some of those will want to change their own oil. Inner cities have higher costs associated with the property while customers have less cash for extras.

How does an Oil Change Business make money?

Your customers pay you a minimal fee for completing a quick oil change on their personal vehicle. Connect with local car rental agencies or delivery services to generate a larger base of repeat customers. When you expand the number of services offered, clients will return to you more often increasing profits.

How much can you charge customers?

You will want to shop your competitors to ensure your price is appropriate to your neighborhood. A simple oil change averages between $25 and $55. Most services at a quick oil change shop will cost under $100, but accessories and parts like windshield wipers provide excellent profit margins.

How much profit can an Oil Change Business make?

With many oil franchises bringing in nearly $250,000 a year, as the owner, it is possible to see a net profit of $75,000 to $80,000 a year. If your market can support the demand for additional bays, your operational income can rise dramatically above the average if your schedule is filled with appointments from open to close.

How can you make your business more profitable?

While an oil change in itself makes very little profit, the addition of extra services and parts for each customer raises the average profit margin up to 35% for services rendered per customer. Your technicians must walk the fine line between selling extra services just to make a buck vs. providing honest advice to your customers. In the long run, honesty will build a more loyal clientele that will be ready to pay for the extras.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Oil Change Business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

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 through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history, which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

Certificate of Occupancy

Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a oil change business.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for your business’ location to ensure your oil change business will be in compliance and able to obtain a CO.

Liability Waivers

To avoid liability and potential lawsuits, oil change businesses should have their clients sign waivers.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Oil Change Business needs and how much it will cost you by reading our guide Business Insurance for Oil Change Business.

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.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market an Oil Change Business

Your most visible marketing tool is your store front. Make sure that your signage clearly states the service that you offer and that your property is well-maintained to welcome in new customers. Direct marketing campaigns that include a discount or coupon for your garage will help generate your initial flow of traffic. Since almost every automotive garage offers oil changes, price and speed will be key elements in driving customers to your door. Make sure that you are offering a good price, but one that also supports your business model.

How to keep customers coming back

Your first year of service will focus on large promotional campaigns in order to build local recognition and a customer base. Make use of radio, television, newspapers, social media, and direct marketing to flood the area with your name and brand. Offering discount coupons or a new-customer bonus encourages folks to check you out. Once they are in the door, it is up to your technicians to complete their work quickly. Customer service that also encourages your clients to complete other needed maintenance at your location helps to build a sense of caring and community, creating a repeat customer.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

If you enjoy working with cars, customers, and providing a valuable service to the community, this might be the right business opportunity for you. There is a sizable investment required to get off the ground, but with the right location, marketing, and constant hard work, it can be very rewarding.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at an Oil Change Business?

You and your employees will have a fairly regular schedule that includes:

  • Maintaining the garage bays, lifts, and pumps
  • Neatening up the customer waiting lounge
  • Scheduling appointments such that customers never have to wait long
  • Ordering supplies including oil, filters, gaskets and other automotive parts
  • Basic money handling
  • Process payroll
  • Basic marketing tasks
  • Maintaining your knowledge level for servicing all major brands of cars and new models

What are some skills and experiences that will help you build a successful Oil Change Business?

If you are going to be doing the oil changes yourself, then you should have completed basic automotive maintenance courses at your local technical university along with a couple years of experience applying your knowledge in the real world. Otherwise, as the owner you will need to:

  • Understand OSHA standards to provide a safe working and customer service environment
  • Have completed basic coursework in business management and administration
  • Have good customer service skills
  • Have the ability to train your employees in proper completion of all services offered
  • Understanding of local regulations regarding disposal of hazardous wastes i.e. used oil and other fluids
  • Basic marketing skills

What is the growth potential for an Oil Change Business?

Everybody needs to have their oil changed one to four times a year. If you establish a reputation for providing quick, reliable service at a competitive price, the word will spread. In a major metropolitan area, the opportunity to expand to multiple locations is very real. If you wish to take further advantage of your current location, expanding the services you provide will help to raise profits with minimal investment. In upscale neighborhoods, you may be able to offer a mobile oil change service for your wealthier clients.

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Take the Next Step

Find a business mentor

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.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting an Oil Change Business?

Location, location, location. You may be able to find low rent for a fully-equipped garage in an industrial park at the edge of town, but that requires your customers spend some time to find you. When you are positioned in a busy commercial area full of strip malls and office buildings, you encourage your customers to complete this errand during lunch, or while out and about.

How and when to build a team

You may wish to have a business partner in this endeavor. One person may be focused on the mechanical part of the garage, while the other excels at marketing and maintaining good business practices. Both of you should be on board from the beginning. Hire your oil change technicians two weeks before opening to review service standards and provide training.

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