For those with an entrepreneurial spirit, the idea of opening a business is one that probably sparks great excitement, as it should. Smart potential business owners know that they must learn the industry and have a strong knowledge of scheduling, finances and other detail-oriented tasks. But the brilliant business owner realizes that personality is key in choosing the type of business to run and how to create and execute a successful plan. The car wash industry is certainly no different.
Entering the Car Wash Business
A car wash is an excellent start-up option for a motivated individual with little previous business experience.According to the International Carwash Association, the average salaries for these startups is in line with or above the averages for other new businesses. However, entrepreneurs looking to enter the car wash industry should consider which type of personality they have before jumping in. There are various business models to consider, and some honest self-reflection is a must if the owner wants to succeed. So, let’s take a look at personality traits and business models.
It’s time for honest self-examination. First, determine what type of business you want to run. Then be realistic. Ask yourself some personal questions:
- Am I a people person? Introvert? Extrovert?
- How many people do I plan to have working for me?
- Do I want to be a manager, owner, or both?
- Am I interested in running a detail-oriented business?
- Am I a team player or a lone wolf?
- What type of equipment would be in my comfort zone?
- How much income do I want/need to generate?
Know the Business Models
There are multiple models from which to do business when owning or managing a car wash. Let’s examine them one at a time:
- Full serve and flex businesses: This model requires the operator to interact with several employees. In this model, the owner needs strong social skills and patience with various personality types. This hands-on model focuses on customer relationships and demands a detail-oriented approach. With the high number of customer influx and employees to manage, only the most personable and extroverted individuals are likely to enjoy this model. The demands are high, but so are the rewards.
- Bay Automatic (IBA) and self-serve: These models are the least interactive types of car washes. Fewer employees means fewer personalities to cope with. With fewer social demands, these businesses are ideal for the more introverted or independent personality types.
- Express car wash: This business type falls in the middle of the spectrum. This model is characterized by fewer employee/customer interactions than Full/Flex, but more than IBA and self-serve. The exterior-conveyor car wash offers the third highest income and will require maintenance for the machinery. So, while this model requires an average degree of people skills, the machinery maintenance is a higher priority to the owner compared to other models.
Iron Fox Delivers
Now that you have examined your strengths and desires, likes and dislikes, and have projected the income you need, it’s time to push forward. That’s where Iron Fox arrives on the scene. We love to help new entrepreneurs take their first steps, and we are poised to help you make the best choices for your individualized vision. We offer site selectionadvisory services, sophisticated site volume analytics, equipment and chemical consultation, sales and service, and further training and advisory services even after project completion.
To learn more about Iron Fox and how we can move you from dreamer to thriving entrepreneur, request a free initial site consultation.
by Henry Weinschenk
Months, sometime years, have passed since you first started the project of building a carwash. You have spent a good amount of money on lawyers, architects, engineers, government fees, etc. besides paying for an expensive piece of land.
You are now ready to buy the wash equipment. There are many manufacturers. How do you make sense out of such a great variety? It’s not easy. When all is said and done, the equipment does not look that different, except for some bells and whistles. What’s your next step?
You will be surprised about the price ranges for similar packages of equipment. You may be inclined to go with the most expensive one, assuming that it will be the best, or the one that looks slickest, or the one that is the lowest cost.
The reality is that, these days most equipment performs the job of cleaning cars adequately. What you don’t know is, how will it perform from a maintenance point of view. There is one simple fact, carwash equipment is constantly subject to stress, wear and tear. It just comes with the territory. So, the important questions now are: is it build to last? Is it simple enough that it can be maintained by my own crew? Or, is it so complex that I will depend on outside service people? These are really the most important questions when selecting one manufacturer over another.
Once you have narrowed down your selection, you have another set of questions: who will install the equipment, and who will install all the plumbing and wiring that is required? These last two are not a minor matter. It will take substantial amounts of time and money, especially if you are only provided with minimum information and diagrams.
Finally, the construction starts, the equipment has been ordered and — like all construction jobs — there are delays, unforeseen situations, work change orders, bad weather, etc. But you can see the light at the end of the tunnel. Pardon the pun.
As you near completion, you will have to concentrate on hiring the right people. It does not matter if you are building a simple little car wash, that requires few people or a larger one with a lot of services provided by a crew of people. You will need people.
Regardless of, if you plan to run the daily operations or not, you will have to hire a responsible and capable manager. Somebody that can deal with the maintenance of the equipment, the people in the crew, and the most important people of all: your customers. Who are you going to get and where will you find that person? And, once hired, how are you going to compensate and motivate, him or her. You want to make sure you will retain that person for a long time. That is, if that person turns out to be the right person.
You will also have to interview and hire, assistant managers and the rest of the crew. Remember that these people are not just your production workers, they are your ambassadors in front of your customers.
You are still weeks, if not months, away from your opening day, but you need to start planning for it. How will people know that you are open for business?
Stay tuned for Part III.
by Henry Weinschenk
Having owned full service carwashes for more than thirty years, I have been asked these questions many times. I would generally smile, and answer, “Other than being capital intensive, labor intensive, management intensive, and being completely weather dependent, it’s an easy business”.
Writing here as an industry veteran, however, I am committed to giving a much more professional answer to the same questions, and hopefully explain what owning a car wash, or a few car washes, is and isn’t.
It is definitely capital intensive. People are often surprised to hear that even a very small and simple car wash will involve a total investment—land, building, equipment and working capital—of one or two million dollars. A good full- or flex-service carwash will require, as a minimum, two to four million dollars.
The biggest risk in the carwash business is location. A good location is crucial to produce the results necessary to pay for the actual investment. Many new carwashes fail because they were built on a location that doesn’t have a market sufficient to generate an adequate flow of customers. Another risk is overbuilding. You need a nice and attractive facility, of course; but building a white elephant will make your risk even greater.
When evaluating sites, you need to do much more than look at a street’s traffic count, or spot a few fast-food businesses in the vicinity. A good, professional analysis will evaluate much more that the traffic flow in front of a proposed site. It will determine how many people live in a given radius, what the level of income is for that demographic, how many people actually work in the surrounding market area, and in which occupations. And, obviously, it will look at existing competitors, including the type of facilities they operate and their locations respective to your site. Each of these answers has a certain weight in the equation to determine what the actual flow of cars through your carwash will be. However, proven industry analysis models of this type, on new and/or existing carwash facilities, are very limited.
Post-investigation, you’ve found the perfect site. Perversely, though, the site that seems to yield the most volume is generally the most expensive one, and the one with the most zoning restrictions. In fact, by the time you get all the necessary approvals, you will have expended a frustratingly inordinate amount of time, patience and money.
After spending even more money and time, you have a site plan and a set of building plans in hand—now it’s time to buy the necessary tunnel equipment for your carwash. You attend all the industry shows, but each manufacturer assures you that they have the best equipment available. How do you make sense out of such a variety of producers? It’s not easy. Keep in mind, though, that when all is said and done, the equipment doesn’t look that different, with the exception of various bells and whistles.
So, what is your next step? Stay tuned for Part II.
The Car Wash and Auto Detailing industry is already worth over $11 billion, and that number is expected to increase over the next 5 years. The highly fragmented nature of the playing field makes it an ideal investment opportunity for a variety of savvy investors. The right location, strategy, and execution can create one, or a string of, successful small businesses that generate large amounts of passive income. Just like every opportunity, these rewards do not come without risk though.
Car wash locations are marked as special use buildings which can make liquidity difficult. There is also the risk of over-investing in resources and inventory. What many first-time owners fail to understand is just how complicated opening a new location can be. The best operator on earth can’t fix a business in the wrong place.
There are several factors that can determine the success or failure of a car wash before the first customer ever arrives. The best way to mitigate risk is with a solid plan. In this post, we’ll cover some of the most common and vital areas of risk and what steps can be taken to avoid pitfalls.
The first step in creating a successful car wash is developing a nuanced understanding of the different available models. Will the location be full-service? Flex and exterior? Some models, like the exterior wash, will generate an increased competition for optimal sites. The answer to these questions will be extremely important for determining the class and quality of a location.
After deciding on an appropriate model that fits your investment profile and risk tolerance, it is important to map out how you will select your location. Start by weighing initial costs with expected returns, but create SMART (Specific, Measurable, Attainable, Realistic, Time-Based) goals to reduce the potential for over-extending and inviting potential catastrophes. Experienced industry professionals who have successfully opened and managed several locations often utilize well-funded real estate teams to analyze the viability of all new locations.
The next step is pricing out equipment and supplies. Be careful to take information from manufactures with a grain of salt. They will make money even if your location fails. Brokers want to maximize the sale or lease rate. Everybody has their own best interest at heart and might encourage you to open a non-viable location.
It is important to remember that success in the car wash industry is a mix of smart location and operational know-how. Consulting with experts can reduce the risks of overbuilding and poor design.
At IRON FOX, we help you avoid risk with complete and sophisticated volume analytics to help you make the best investment decisions. At the start of planning, we offer a free preliminary site inspection and analysis. Our many years of experience in retail site selection for carwash operations as well as operational knowledge allow us to assist you in decision-making to set your business up for success.