Developing a Car Wash
Type of Car Wash
You Want to Build
By Chip Ashton
In last month's issue of Auto Laundry News I discussed the criteria I employ to determine whether a site is appropriate for a car wash business. If you don't remember the article or didn't get that issue, relax. I have an extra thousand or so in my basement, one of which can be yours just for the asking.
I think for my next article, I'm going to skip to Part 4 and see if anyone notices. Then I will constantly refer back to all the "industry secrets" I let out of the bag in Part 3, which of course never existed! So no one will have any idea what I"m talking about... including me! Can you say "genius?"
Seriously, though, what makes a great car wash site?
In my opinion a car wash is a "discretionary purchase" rather than a "destination purchase." Everything I do in this business is based upon this opinion -- from site selection, to facility design, to menus, to marketing.
In a nutshell, here are the three characteristics that I think make a great site:
- Close to destination shopping
- Visibility from, and access to, a commercial street with high traffic counts
- Limited competition
- While I also consider other factors, these are my big three.
There are four factors we should consider when making the decision about the type of car wash we are going to build: personal preferences, labor, land, and profits.
Personal preferences are, well, personal. We all have different and unique priorities regarding the type of car wash facility we want to develop. Some like full-serve, some like self-serve, some like express exterior. Some like super slow exterior -- just checking to see if you're still awake!
Labor is far and away the biggest headache we all consider in determining our type of facility. For more on labor, please chug two Red Bulls and then read the 32 articles on this subject that have appeared in car wash magazines in the past two months. Let me just say that dealing with employees means dealing with "issues" -- drugs, pregnancy, immigration, etc. Thankfully, some employees make it simple. For example, there is the illegal immigrant who deals drugs and is pregnant by a co-worker (who happens to be married to another co-worker). Bingo, can you say "trifecta?" Naturally, your first question is, "Okay Chip, how would you handle this hypothetical employee?" A promotion, of course! Do you know how hard it is to find service-industry personnel who can multi-task?
Land can dictate the type of facility you'll end up building, and in my experience, it usually does. If you have high land costs -- for example, $2 million for a one-acre pad site -- you most likely couldn't develop a self-serve or express exterior, no matter how badly you wanted to. In all probability you simply couldn't make a return on your investment.
Profits are important! I think we often neglect to keep profits as the primary focus. In my case, I want to build the type of car wash the location dictates, but I want to design it in a way that maximizes profits and minimizes labor.
At my existing facility, I have broken down the car washinto three sectors on my financial statement: exterior-only, after-care (interior cleaning), and detailing. Upon analysis, I have learned that the largest portion of the profits comes from the exterior-only and detailing sectors; they use the least amount of labor as a percentage of sales. The after-care area is very labor intensive and the resulting profit margins are much lower.
So my focus at my second site will be to maximize the most profitable sectors -- exterior-only car washes and detailing. I will minimize the labor by eliminating the after-care portion entirely. Actually, I will offer an "interior super clean" in the detail center for individuals who do not want to do it themselves, no matter what. The price for this will be high, with the intent of only catering to about 5 percent to 10 percent of the customers. I will substitute free vacuum canopies for tunnel customers in hopes that this will appease the remaining "interior cleaning" customers.
BELLS AND WHISTLES
Bells and whistles are fine, but will they increase sales? Fancy architecture and ancillary profit centers can be a huge benefit, or they can just be a big waste of money. I usually see only the extremes in this regard -- they either do great or they are lousy, with not much in between.
Some people add coffee bars, vacuum canopies, dog washes, jungle characters in the wash tunnel, incredible architecture, huge gift shops, lube centers, fire places in the lobby, etc. The question is, does it help? In my opinion, you really need to ask yourself whether you are going to make a commitment to these add-ons? Are you going to market the ancillary profit centers and cross-promote them on site? Are you going to train your staff to ensure that these other services are performed professionally? I've seen great dog washes and lousy dog washes. The common theme I have seen in the successful facilities is a strong commitment to making the ancillary profit center an integral part of the overall facility. As far as architecture goes, there seems to be pretty conclusive data that glass increases sales. I have seen many of these all-glass facilities and they are very impressive, and more importantly, they seem to have higher sales than conventional facilities. That is always the question I ask myself: "Will it increase my sales?" For this site, I am definitely paying the premium for glass. It's a "bell and whistle" that I believe will be a good investment.
HAVE A PLAN "B"
While I have confidence in my own predictions, I am not confident enough to put all my eggs in one basket. My personal preference is to build only an express-exterior car wash. But what if it doesn't work? Or it works initially, but then numerous competitors enter my trade area. I have decided to invest in a variety of ancillary profit centers, most of which will be labor-free. In order to create my own "barrier to entry," I want to build a facility that a potential competitor would think long and hard about competing against. With such a large investment, to not have a "plan B" is way past my comfort zone.