Five years ago, Tim LaGanke was sitting on a boat off the coast of Florida with no idea what his next step in the business world would be. It was an unfamiliar situation for LaGanke, who in 1985, founded Cleveland’s first 10-minute oil change business, Lube Stop, and grew it into an $11 million a year operation with more than 30 locations.
But a lack of available land, rising operating costs and philosophical differences with his business partner, Jerry Forstner, about the company’s future caused LaGanke to sell off his share of the business in the winter of 1994 and head south to reassess his future.
“My intention at that point was not to be in the oil changing business or any business,” he says.
LaGanke, whose face is lined with evidence of his wide, friendly smile, sits with his weathered hands folded in front of him on the table. He prides himself on “telling it like it is,” and is not shy about sharing the stories of his business ups and downs.
“I really was not sure what I would do after that. I was 54 years old, asking myself what I was going to do with the rest of my life. I kind of had an idea I would look around and see if I could find something that fit.”
A chance encounter with the president of Florida’s Checkers Hamburgers chain of drive-up restaurants cured LaGanke’s indecision. He soon found himself at the company’s Clearwater, Fla., franchising school, seriously debating whether a venture into the fast-food industry should be his next business move.
He ultimately decided against the hamburger business, but the chain’s use of small, prefabricated buildings on tiny pieces of property intrigued him. That concept drew LaGanke back into the industry he knew best, and in 1996, he founded a new oil change company, Quick Change.
But LaGanke’s return to his roots occurred only after he found solutions to the problems that made him walk away in the first place. In the process, he reinvented his business and the industry as a whole.
Assess the industry
One overriding problem seemed to be the root of all the others that plagued the oil change business: The costs and risks associated with opening a store. The brick and mortar investment in a single oil changing location was about $500,000.
When a store went out of business, it was demolished more often than it was sold to another business owner.
“There really isn’t a good use for a closed oil change store,” says LaGanke. “In fact, I can’t think of any around the country I have ever seen that were closed and have become anything other than a bulldozer’s target.”
To combat high operating costs, some oil change operations offered other services, such as tire rotations, transmission fluid changes and radiator flushes to bring in additional revenue. LaGanke eschewed this approach because it destroyed the hook that originally drew customers to the businesses — a quick oil change at a fair price.
Make changes
If he were to venture back into the oil changing business, LaGanke decided he would reduce the risk and cut operating expenses by using modular buildings. There would be no crippling capital expenses at the outset, and if a location was not generating enough business, it could be moved for a modest price.
“This is almost an exit plan,” he says of his modular idea. “You’re not going to get out of the business, you’re going to move it somewhere else. But this whole business centers on location. There isn’t anything more important.”
There were problems with the modular idea, but LaGanke solved them all with one creation. He designed a 47,000 pound, six foot deep concrete vault with 10-inch thick walls. It would serve as the modular building’s foundation, provide working space for employees and meet Environmental Protection Agency guidelines regarding the storage of oil.
Because of the vault idea, for which LaGanke received a patent in 1997, the new oil change stores would cost only around $150,000 to build.
Draft a business strategy
With a low-cost operation, LaGanke decided to open a store that only offered 10-minute oil changes. The lower start-up cost allowed him to seek out small parcels of land near retail centers in secondary markets, locations quick lube shops never ventured to before.
“Quick Change parallels what Lube Stop did when it started,” says LaGanke. “However, it is being done at a much lower cost, so we can afford to do less number of cars per day and be able to put them in places like Chardon, where we never considered putting a Lube Stop.”
But LaGanke did not return to the oil changing business only to build another string of successful stores. He wanted to sell his modular building design, but imagined that would happen only after he had proven its market viability — that is, until a representative of Pennzoil visited him and offered to buy his first modular building before it was ever assembled.
Test the plan
Growth of the local chain of Quick Lube stores started after LaGanke’s new 10-minute oil change process proved a winner at his first store, in Chesterland.
“It all kind of evolved about by being a lower cost of capitalization to get into the business,” he says. “So we went from the West Geauga store to Chardon to Middleburg Heights, to anywhere else we found property around Cleveland.”
In three years, Quick Change has evolved into a business with two distinct sides. There is the chain of nine Quick Change stores, operated by LaGanke’s son, Tim LaGanke Jr., and the building side, which has sold 18 modular buildings to companies across the nation.
Tim LaGanke Jr. expects the success of the Northeast Ohio Quick Change shops to boost the building side of the operation as people see the business potential of his father’s design.
“We have a model,” he says. “We can either sell that model by franchising or whatever method we choose. It’s getting to the point now with nine stores that we’ve created a pretty good chain. It’s something people can recognize and say ‘Hey, there might be something to this.’”
How to reach: Quick Change, www.quickchangeoil.com, (440) 729-1113
Jim Vickers ([email protected]) is an associate editor at SBN.
