Category: Operations

Part II

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.

Part I

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.