PC&D MAGAZINE
Special Report: Building or buying a conveyor carwash
From Volume 22, Issue 1 - January 1998
Feature
Our checklists can help you get off to a good start.
by: John H. Hansen
 
 Related Information
  There's safety in numbers
  Conveyor Basics

10 questions to answer before building a new conveyorized carwash

1. Does the market area (3-mile radius) project future growth?

Commercial and high-density residential growth are important to gaining new customers and for business expansion.

PLUS (+)

 There are existing apartments or condominiums.

 Apartment or condominium construction is planned.

 There are other auto-service stores nearby.

 There is new commercial building construction under way.

 McDonald's, Wendy's or Burger King are on your street.

MINUS (-)

 There are many single-family homes.

 The residential population has an average household income of less than $35,000 annually.

 There is a poorly operated carwash nearby.

 There are several closed businesses in the area.

 There are no fast-food outlets within three blocks.

 

2. Does your site have the potential for a successful carwash?

Potential carwash volume and ease of traffic movement are major keys to growth.

PLUS (+)

 Traffic speeds past the site are 35 mph to 40 mph maximum.

 There is a traffic light within one block.

 Carwash signage can be seen farther than 150 feet.

 The location has good entrances with at least two lanes for stacking.

MINUS (-)

 The property front is on a divided highway.

 There is no traffic light or stop sign within two blocks.

 There are too many business signs on the street.

 Egress from the site will be difficult due to heavy passing traffic.

 

3. Can your financial projections and business plan please your lender?

Review your projections for a 60/25/15 plan: 60 percent of gross revenue for operating expense, 25 percent for debt service and 15 percent gross profit.

PLUS (+)

 Your business plan is realistic.

 The loan officer asks you all the right questions.

 Your bank understands the carwash business and will allow you to pay interest-only for three months per year, if needed.

MINUS (-)

 Your business plan has contradicting presentations.

 The loan officer had a bad experience at a carwash.

 The lender does not know you or has not done basic research on the carwash industry.

 

4. Does your attorney have the "right stuff" in your community?

The "right" attorney knows the questions before they are asked.

PLUS (+)

 Your attorney knows all the environmental, traffic and appearance concerns of the community.

 Your attorney has a positive reputation with the local government.

MINUS (-)

 Your attorney is from out of town.

 Your attorney has minimal experience with new commercial zoning presentations.

 

5. Does your architect or engineer have previous carwash or car care center design experience?

A practical and innovative building design is your goal. It will have your "signature" for years.

PLUS (+)

 The architect shows you other carwash designs.

 Their design addresses community concerns as well as operational practicality.

 The architect's layout has been approved by your equipment supplier.

MINUS (-)

 The architect has little or no commercial experience.

 The architect designs a "Taj Mahal" with no concern for operational practicality.

 The architect does not accept your equipment supplier's input.

 

6. Does your general contractor have carwash or similar building experience?

You and your general contractor must have a good relationship. They must understand your goals.

PLUS (+)

 The general contractor has a strong history of building where water drainage and concrete pour accuracy is critical.

 The general contractor has a pool of subcontractors who can perform out-of-the-ordinary drawings and instructions.

 The general contractor is "flexible" without attaching dollars to the word.

MINUS (-)

 The general contractor has little commercial or industrial building experience.

 The general contractor wants you to select the subcontractors.

 Fine print in the contract uses the words "change" and "time and material" interchangeably.

 

7. Is your concrete contractor up to being the most important member of your building team?

The carwash will be a problem forever with a bad tunnel floor.

PLUS (+)

 The concrete company has done carwash work.

 The concrete company asks all the right questions about the conveyor trench pour.

 The tunnel floor slopes and trench details are recognized as critical.

MINUS (-)

 Previous experience includes sidewalks, basements and driveways, with little or no industrial experience.

 The concrete contractor does not feel it is necessary to talk with the conveyor manufacturer or installer before pouring.

 The concrete contractor says, "This job is simple."

 

8. Will your site allow for future new services or equipment?

Having basic utilities in place for expansion saves big dollars later.

PLUS (+)

 You put your dreams for expansion on the drawings for utility "stub-ups."

 You can add 10 feet to the wash tunnel with trenching in place.

 You can install a larger equipment programmer and cash control computer.

MINUS (-)

 Site size will not allow expansion.

 Zoning for your site will not allow other related services.

 Traffic ingress and egress restricts expansion and other services.

 

9. Why should you submit your building plans to your equipment supplier for review?

Your supplier is a reservoir of knowledge. Their reputation is on the line with your venture.

PLUS (+)

 The equipment supplier has given you professional equipment plans and plumbing and electrical schedules.

 The installers of the equipment are experienced and recommended by the manufacturer.

 There is one person at the factory handling your job.

MINUS (-)

 Your supplier's equipment plans consist of pencil sketches on note pads.

 The equipment installer has no previous experience with the chosen brand of equipment.

 Owner's manuals or installation plans are not available before you sign the contract.

 

10. Will your maintenance person be available to work with contractors and equipment suppliers for "as built" knowledge?

Your manager should be the people person for customers and employees. The assistant manager should be the maintenance person.

PLUS (+)

 Your own mechanical and electrical experience will be used daily.

 Your mechanic has carwash experience and good references.

 The equipment manufacturer or installer knows of your mechanic.

MINUS (-)

 You will be an absentee owner.

 You are mechanically and electrically deprived.

 Your choice for carwash mechanic is a family friend who knows automobiles.

 

10 questions to answer before buying an existing conveyorized carwash

1. What is the business history of the site?

Why does the existing owner want to sell?

PLUS (+)

 There is a history of profits even during "down" years.

 Labor cost and electrical service expense match the reported volume in percent of revenue or cost per car. (See Professional Carwashing & Detailing's (PC&D's) Automatic Carwash Survey.)

 The existing owner is active in the business.

MINUS (-)

 The last three years have shown a loss.

 Utilities or labor expense do not compare favorably to revenue. (See PC&D's survey.)

 A senior employee, not the owner, responds to your questions.

 

2. Is the market area growing, stable or on a downward trend?

Customers will patronize your carwash if it is convenient for them. Check the market area (3-mile radius) for median income, vehicle appearance and general upkeep.

PLUS (+)

 New apartments or condominiums will be built within three years.

 Many apartments or condominiums are occupied now.

 The commercial area surrounding the carwash is busy.

 There is no history of crime at the location.

MINUS (-)

 The market area is dominated by single-family homes.

 There are four or more tunnel carwashes within five miles.

 There is a noticeable quantity of closed businesses nearby.

 The local police have many calls into the area.

 

3. What is the labor availability within the market area?

Good line labor is the second most important requirement. (Potential customers is the first). A stable workforce will give you a productive team.

PLUS (+)

 A four-year or community college is nearby.

 A military installation is nearby.

 Employees at area fast-food stores have longevity there and are enthusiastic.

MINUS (-)

 The existing owner issued more than three times the number of W-2 forms last year compared to the quantity of weekly paychecks.

 Other service business owners in the area complain about "poor help."

 Public transportation is sparse.

 

4. How soon will major building or property repairs or equipment replacement be necessary?

Get specific building and equipment re-build proposals before you buy the carwash.

PLUS (+)

 The building and equipment are less than eight years old.

 The inside and outside of the building are in good condition.

 Equipment maintenance records are available.

 The equipment room is clean, and tools and spare parts are visible and organized.

MINUS (-)

 The equipment is more than eight years old, and there are no records of major overhaul.

 The building needs a major facelift.

 The wash tunnel and equipment are maintenance-deprived.

 The equipment room is dirty and disorderly.

 

5. Using the latest PC&D survey's capture rate and 24-hour car count, is the carwash reaching its potential volume?

The southeast corner of the profit-and-loss statement needs to be in black ink. If the potential business is there, you can do it.

PLUS (+)

 There is steady and continuous business.

 Customers know the carwash.

 Employees are in uniforms, are pleasant and know the customers.

 Ingress and egress for the location is easy.

MINUS (-)

 Revenue per car is 15 percent less than the latest PC&D survey.

 Existing revenue will not reach your break-even numbers.

 Signage is poor.

 Customers have difficulty entering or leaving the site.

 

6. Is there more than one profit center on the site?

More "eggs" in more baskets give you greater profit potential.

PLUS (+)

 Detailing services are offered.

 A lube center is on the site.

 Self-serve carwash bays are part of the property.

 Gasoline is sold or a convenience store is open on the carwash site.

MINUS (-)

 Available land does not allow for another profit center.

 Zoning ordinances may restrict additional profit centers.

 Major reconstruction will be required for accessory sales in the carwash waiting area.

 Old in-ground gas tanks may pose an environmental problem.

 

7. Can you increase the present business volume?

Revenue growth due to customer happiness should be your mission statement.

PLUS (+)

 Consumer spending in the market area is booming.

 There are other prosperous service businesses in the area.

 Your business plan includes continuous advertising.

 Existing customers are pleased with the carwash service.

MINUS (-)

 Line labor is difficult to find.

 Existing businesses in the area are struggling.

 The surrounding residential areas show few signs of new building or major reconstruction.

 Competitive carwashes in the area have not increased volume in recent years.

 

8. Are you capable of performing all maintenance duties?

Don't try to become your own mechanic if you don't like to get your hands dirty.

PLUS (+)

 You are mechanically and electrically talented.

 Your home workshop is neat and organized.

 You will eagerly learn the operation and maintenance requirements of each piece of equipment.

 You approach troubleshooting equipment problems with common sense.

MINUS (-)

 You are technically impaired.

 You do not have a personal set of hand tools.

 One of your favorite sayings is: "If it runs, leave it alone."

 You believe equipment problem solving can be completely handled by telephone.

 

9. What do existing customers think about the service?

Customers sign your paycheck. Their opinions count.

PLUS (+)

 The existing owner has a customer database.

 The existing owner encourages you to contact his customers.

 Customer complaints are not specific.

 Customer responses are favorable overall.

MINUS (-)

 The existing owner does not know who his customers are.

 Key line employees do not know regular customers' names.

 Customers you are able to speak with are specific with their complaints.

 Customers respond to your questions with only a "yes" or "no."

 

10. Are you a "people" person?

Happy people - customers and employees - are at the center of success.

PLUS (+)

 You will be on-site for most of each week.

 You will have a proven and experienced manager.

 Your employee training program will include customer service issues.

 You enjoy meeting and talking with customers.

MINUS (-)

 You will be an absentee owner.

 Your manager is a family friend who worked in a shoe store.

 You would rather work on the equipment or "crunch numbers."

 Employee training and incentives are not among your prime considerations.

 

John Hansen is a contributing editor of Professional Carwashing & Detailing magazine.

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