Anyone Owns Car Washes?

[JustAskBenWhy]

Just got a call from a banker. 3 are available. Just looking for reliable base-line info on margins, etc.

Any help would be appreciated, guys!

 

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[jon.a]

Just got a call from a banker. 3 are available. Just looking for reliable base-line info on margins, etc.

Any help would be appreciated, guys!

CASH

 

[LibertyForMe]

I can't give you any detailed info, but I do know that an EXTREMELY successful businessman in South Carolina has 20 or 30 car washes in addition to his multiple other businesses. He used the car washes as leverage for borrowing for his other businesses, since they are viewed very favorably by banks. So he couldn't really sell them off because he had so much debt against them, but they were an effective business tool for him regardless.

 

[JustAskBenWhy]

CASH

Hah - Just talked to the owner. And it's not as much cash as you'd think. I can read between the numbers

Waiting on more info, since he wasn't able to answer all of the questions

 

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[jon.a]

Hah - Just talked to the owner. And it's not as much cash as you'd think. I can read between the numbers

Waiting on more info, since he wasn't able to answer all of the questions

Keep posting. Some of us would like to see how this goes.

 

[JustAskBenWhy]

I can't give you any detailed info, but I do know that an EXTREMELY successful businessman in South Carolina has 20 or 30 car washes in addition to his multiple other businesses. He used the car washes as leverage for borrowing for his other businesses, since they are viewed very favorably by banks. So he couldn't really sell them off because he had so much debt against them, but they were an effective business tool for him regardless.

This is a very good comment!!!

I think the situation is similar here as well. Car washes are depreciating assets. And, to manage properly without killing yourself, they necessitate pay roll. So, the question is - how much CF is enough to make myself this uncomfortable...? Of course there is the benefit of it being cash business, and there is depreciation. But, without very strong CF it's not something I am interested in.

I am not so sure that the CF is there, but I'll do more DD when I get more numbers.

 

[Get Right]

Environmental laws have gotten tougher on them.

Also - physical distance between car washes and "manager" is important. You have a low water issue, alert is sent and your pumps are burning up while your manager is in route...

 

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[Silverhawk851]

I recently helped set up the marketing for buddy's car wash.

So his set up is like this:
He has a car wash, a gas station and a lube station all in the same spot.

Definitely need a manager for hands-on maintenance. Can't run without it.

For the car wash ,the margins are actually not as bad I thought.
Cost about $1.10 for a regular wash, charge at $7.99
Costs about $1.75 for a Ultimate, charging at $11.99

The big issue, as we all know, is traffic.
Thing with my friend is that he's in a great location,
but still wasn't getting much traffic due to bad marketing.

We built out a funnel,
Ran a Special for Ultimate Car Wash for $2 Flyer in municipal newspaper in a 4KM radius which was all residential,
and gave them a free vaccuum with the wash. (we already has those set up, and no extra cost except electricity which is on anyways)
had the car wash packed around the block.
Cost per customer acquisition was like $1.20

After 2 months of that, we switched to $3.99 and saw like 15% drop only.

2nd thing we did was give each person a flyer before they went in,
for a monthly package for $39,99/mo unlimited washes
and one for the oil change 25% off.

Average Customer Lifetime Value at like $80+ for the year including oil change profit plus gas.
Most people become creatures of habit after a while,
if you become their "Go-to" car wash, they generally come to you over and over again.
I think it was about 5 times return that we saw that.

80 - 1.20 = $78.8 profit per customer over the year
Ranges from about 60-120 people per day.

Bottle neck is finding ways to scale that out.

Hope that gives you a little insight into the numbers and marketing aspect of it all

 

[daivey]

silver, are you talking about an automated car wash? i'm assuming yes.
how much did it cost to set something like that up? roughly.

I recently helped set up the marketing for buddy's car wash.

So his set up is like this:
He has a car wash, a gas station and a lube station all in the same spot.

Definitely need a manager for hands-on maintenance. Can't run without it.

For the car wash ,the margins are actually not as bad I thought.
Cost about $1.10 for a regular wash, charge at $7.99
Costs about $1.75 for a Ultimate, charging at $11.99

The big issue, as we all know, is traffic.
Thing with my friend is that he's in a great location,
but still wasn't getting much traffic due to bad marketing.

We built out a funnel,
Ran a Special for Ultimate Car Wash for $2 Flyer in municipal newspaper in a 4KM radius which was all residential,
and gave them a free vaccuum with the wash. (we already has those set up, and no extra cost except electricity which is on anyways)
had the car wash packed around the block.
Cost per customer acquisition was like $1.20

After 2 months of that, we switched to $3.99 and saw like 15% drop only.

2nd thing we did was give each person a flyer before they went in,
for a monthly package for $39,99/mo unlimited washes
and one for the oil change 25% off.

Average Customer Lifetime Value at like $80+ for the year including oil change profit plus gas.
Most people become creatures of habit after a while,
if you become their "Go-to" car wash, they generally come to you over and over again.
I think it was about 5 times return that we saw that.

80 - 1.20 = $78.8 profit per customer over the year
Ranges from about 60-120 people per day.

Bottle neck is finding ways to scale that out.

Hope that gives you a little insight into the numbers and marketing aspect of it all

 

[RadioActive]

I like the whole idea of mobile detailing

 

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[daivey]

I like the whole idea of mobile detailing

yeah, that's a pretty good idea... lots of local laws against car washing though. so you'd have to be careful about that. (in some areas)

 

[Nicko]

Premium car washes seem to do well over here. You can have a wash, vacuum, polish (full detail) whilst you read the paper / listen to music and enjoy a latte in their on site café.

The one closest to me always seems to have a line of cars waiting to get in.

 

[BlakeIC]

What a coicidence for me to see this thread, just the other night I drove past a manual car wash where I used to live and noticed it was now up and running again (was closed for around 4 years)

Got me thinking what kind of margins came with that

 

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[BlakeIC]

I recently helped set up the marketing for buddy's car wash.

So his set up is like this:
He has a car wash, a gas station and a lube station all in the same spot.

Definitely need a manager for hands-on maintenance. Can't run without it.

For the car wash ,the margins are actually not as bad I thought.
Cost about $1.10 for a regular wash, charge at $7.99
Costs about $1.75 for a Ultimate, charging at $11.99

The big issue, as we all know, is traffic.
Thing with my friend is that he's in a great location,
but still wasn't getting much traffic due to bad marketing.

We built out a funnel,
Ran a Special for Ultimate Car Wash for $2 Flyer in municipal newspaper in a 4KM radius which was all residential,
and gave them a free vaccuum with the wash. (we already has those set up, and no extra cost except electricity which is on anyways)
had the car wash packed around the block.
Cost per customer acquisition was like $1.20

After 2 months of that, we switched to $3.99 and saw like 15% drop only.

2nd thing we did was give each person a flyer before they went in,
for a monthly package for $39,99/mo unlimited washes
and one for the oil change 25% off.

Average Customer Lifetime Value at like $80+ for the year including oil change profit plus gas.
Most people become creatures of habit after a while,
if you become their "Go-to" car wash, they generally come to you over and over again.
I think it was about 5 times return that we saw that.

80 - 1.20 = $78.8 profit per customer over the year
Ranges from about 60-120 people per day.

Bottle neck is finding ways to scale that out.

Hope that gives you a little insight into the numbers and marketing aspect of it all

Interesting, in my post where I mentioned the closed down manual car wash, there was an automatic car wash that would charged $20 for ultimate and still always had a few in line

 

[DaRK9]

yeah, that's a pretty good idea... lots of local laws against car washing though. so you'd have to be careful about that. (in some areas)

You can generally get around that with something like this
http://www.chemicalguys.com/Car_Wash_Mat_Water_Containment_Mat_p/acc_m1.htm

Most of the laws have to do with run-off water.

 

[Andy Black]

I recently helped set up the marketing for buddy's car wash.

So his set up is like this:
He has a car wash, a gas station and a lube station all in the same spot.

Definitely need a manager for hands-on maintenance. Can't run without it.

For the car wash ,the margins are actually not as bad I thought.
Cost about $1.10 for a regular wash, charge at $7.99
Costs about $1.75 for a Ultimate, charging at $11.99

The big issue, as we all know, is traffic.
Thing with my friend is that he's in a great location,
but still wasn't getting much traffic due to bad marketing.

We built out a funnel,
Ran a Special for Ultimate Car Wash for $2 Flyer in municipal newspaper in a 4KM radius which was all residential,
and gave them a free vaccuum with the wash. (we already has those set up, and no extra cost except electricity which is on anyways)
had the car wash packed around the block.
Cost per customer acquisition was like $1.20

After 2 months of that, we switched to $3.99 and saw like 15% drop only.

2nd thing we did was give each person a flyer before they went in,
for a monthly package for $39,99/mo unlimited washes
and one for the oil change 25% off.

Average Customer Lifetime Value at like $80+ for the year including oil change profit plus gas.
Most people become creatures of habit after a while,
if you become their "Go-to" car wash, they generally come to you over and over again.
I think it was about 5 times return that we saw that.

80 - 1.20 = $78.8 profit per customer over the year
Ranges from about 60-120 people per day.

Bottle neck is finding ways to scale that out.

Hope that gives you a little insight into the numbers and marketing aspect of it all

Good work. Thanks for sharing.

Had to comment that this is the first time I have seen "traffic" written to mean what the rest of the world knows it as. Lol...

 

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[Silverhawk851]

silver, are you talking about an automated car wash? i'm assuming yes.
how much did it cost to set something like that up? roughly.

Hey so from my knowledge, my friend has installed an automatic wash that can pump 1,200 cars/day.
I'm not 100% sure on the costs of the machinery, I do recall around $400k being mentioned.

There is a publication that goes out with all the equipment, parts and services for car washes,
I can get the name if you're interested.

The costs of a set up are more about the land and area you're in,
which varies alot.
He's in a solid solid location, university with 50k students about 1km away that we just started tapping into.
I have high hopes for him

Also here in Toronto we have weather that requires alot of car washes,
as compared to like Houston, Texas or LA where it's sunny forever.

 

[Silverhawk851]

Had to comment that this is the first time I have seen "traffic" written to mean what the rest of the world knows it as. Lol...

Haha Andy why do you think I offered to help him.... Anything to feel normal again

 

[GMJimmy]

There's a car wash that offers discount and free coffee for taxi drivers. Good way to get more traffic. I don't see it everywhere, but it's maybe because they don't advertise it only to taxi drivers.

Maybe it's nothing new to you in the US

 

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[Mineralogic]

yeah, that's a pretty good idea... lots of local laws against car washing though. so you'd have to be careful about that. (in some areas)

so many laws against the execution of a business plan. LOL- unreal

Big companies love it because as MJ has covered, its part of the "entry" barrier.

 

[jazb]

They are great when you have a meth empire and need to launder the cash

 

[Chitown]

LA where it's sunny forever.

@Silverhawk851,

People still hit the car wash on a regular basis because of the sunshine, here. You've got to have your ride looking tight, always!

 

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[RadioActive]

yeah, that's a pretty good idea... lots of local laws against car washing though. so you'd have to be careful about that. (in some areas)

A family friend has a Mobile Detailing business, dominates our region with it. He's only regulated on where he can wash the cars. (Can't use chemicals near any storm drains)

 

[RadioActive]

Big companies love it because as MJ has covered, its part of the "entry" barrier.

IF you can expand with a Mobile detailing business and even private label car cleaning products, you can make some serious cash. Of course you need a lot to do that. So it follows the entry barrier pretty well.

Almost reminds me of @IceCreamKid 's post on making money for dummies in a crowded market.
https://www.thefastlaneforum.com/co...es-and-in-a-crowded-market.63123/#post-490562