Reading: Breaking Into the Car-Wash Business
At the end of World War II, many returning GIs faced an economic dilemma. War-time economy was slowing down, jobs were intemperate to come by, and there was a huge billow in the work force. My uncle Bill could have returned from oversea to the family cotton business, run by my dad. But like indeed many early companies, its products had been going into industrial war uses. With the armistice came a switch from a war- to a peace-time economy and, as a solution, opportunities were slender. My uncle was at a crossroads : He could wait for the economy to improve and join the class or look for another opportunity. It was 1948, and Bill wasn ’ triiodothyronine alone. He had friends returning from the war in precisely the lapp predicament. A group of them got together and bought a car wash in Camden, N.J. soon after, Bill bought out his partners. He had fallen in love with car-washing and looked for opportunities to expand. By the late 1950s, Bill had grown his car-wash retail business to about 10 locations and was known as a very initiate. He saw there was real demand for new investor sites and an equipment opportunity. Sherman Supersonic Industries, the pre-eminent conveyer car-wash company, became available and Bill acquired it. now he was in a position to meet the growing demand for car-wash apparatus. About that fourth dimension, my parents thought I should go to work, and were convinced the car-wash environment would be a good place for me to learn employment ethics and a small humility. I ’ meter certain they never expected the have would become a lifelong career. Like my uncle, I was seduced, mesmerized and captured by the business. When treated well, car-washing is an incredibly generous mistress. thus immediately that I ’ ve enticed you, how do you become part of the diligence ?
As in any enterprise, the first steps are deciding if the commercial enterprise is for you. I must tell you car-washing is not for the faint. It will engulf you. You will think about it every waking hour. You will even dream about it. When on vacation, you will take side trips to visit car washes, attend association meetings, and become known among your friends as “ the car-wash guy ( or gallon ). ” You ’ ll even speak a modern terminology only sympathize by other car washers. If the idea still appeals to you, read on. car washes generally fall into four categories :
- “Do it yourself” or self-serve, where the motorist washes his own vehicle.
- Tunnel, in which the vehicle is placed on a moving belt that conveys it through the wash. This can be an exterior-only or full-service, in which an attendant details the vehicle inside and out.
- Home-driveway, which is self-explanatory.
- In-bay automatic, in which the vehicle is pulled into a bay and remains stationary while a machine passes over or around it.
The big question I constantly ask is, how much do you want to invest ? The investment I speak of is not only money ; it includes fourth dimension, from start to finish, spent on planning, do and other commitments. If you don ’ thymine want to manage a large staff, you can rule out “ full-service ” conveyors. If your comfort degree is more conservative, in-bay automatics and self-serves may be more your cup of tea.
Bouncing Numbers Around
Each character of cable car wash will have different equipment and land requirements and, hence, a unique budget. With self-serve bays, depending on your local climate, equipment will cost approximately $ 15,000 to $ 25,000. build costs vary, but the simplest structures will start at about $ 25,000. land cost is always the rampantly card, but if you exceed $ 90,000 for your land, build and equipment, you may not get the return you seek. typical equipment for in-bay automatics, depending on speed and other features, will be around $ 135,000. Add to this approximately $ 25,000 for accessory equipment. build costs will be roughly $ 100,000. The average in-bay at a stand-alone car-wash business will generate about $ 125,000 a year gross, with an approximate 75 percentage gross allowance. This leaves $ 93,750 for debt and other fixed costs. burrow car washes are a different investment raw. I have found the distinctive conveyer belt car wash costs around $ 250 per square foot for the build up and equipment. In terms of land, the average tunnel requires about 5,000 square feet. As there are many variables and exceptions, costs and profits for tunnels are the most unmanageable to estimate. The typical tunnel will wash approximately 75,000 cars at approximately $ 15 per wash.
Rules of Thumb
The car-wash business has a couple of rules of thumb. First and first, understand this is a real estate of the realm commercial enterprise. therefore, you want to adhere to the beginning rule of real estate of the realm : Whatever you place on a web site should be the “ highest and best use. ” Basically, the facility must support its investment, including land, build and equipment. If you capitalize your income current, you should come up with a number that resembles the facility ’ s value.
For case, according to a published carwash income statement, the web income from a five-bay, self-serve car slipstream in 2003 was approximately $ 70,000. To back into the value, let ’ s assume the investment finish, based on the gamble, is a return of 20 percentage. By dividing the income by the rate, you get a value of $ 350,000. If the equipment is $ 125,000 and the building is another $ 125,000, the target land price would be $ 100,000 to break even. If the cost of bring is higher than what you identified in your formula, you have to decrease the cost of the build or equipment ( or increase revenues ) to maintain the craved render. At some point, land prize will reach a period at which the car slipstream, in its current form, can not support it. When this occurs, you either change the tax income stream or sell the property. once a car wash is up and running, however, it is difficult to put a rate on what is chiefly a cash business.
Final Words of Wisdom
Although the car-wash business looks simple, it isn ’ t. There are a few early caveats and bits of strong advice I ’ d like to pass on : 1. Interview car-wash owners and visit as many facilities as you can. Study the business carefully. Understand the gamble american samoa well as the rewards. 2. learn car-wash publications, conduct on-line research, and join the International Car Wash Association ( www.carcarecentral.com ) to gather information. 3. Attend seminars and workshops. Several of the exceed manufacturers in the commercial enterprise offer seminar opportunities. Check with them and schedule your time. 4. once you have decided the character of slipstream you want to build, investigate the diverse manufacturers angstrom well as their local avail teams. You will be connected at the hip, so choose wisely. This is a long-run deal. 5. Select the other members of your team ( realtor, lawyer, banker, accountant, contractor and plan team ) with the same due diligence. 6. Use your equipment experts for all their expertness in construction and design. This is where the condom meets the road. 7. Clue your kin in on the commitment you are going to make. You will need their patronize. In a short article, it is unmanageable to relay the fun, agitation and rewards of a career in car-washing, but let me assure you I have had a blast. Car-wash people predominate !
Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a life-long career of designing, sell, build and engage car washes. He can be reached at [ e-mail protected ] .