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I am tinkering around the edges of the idea of a car wash business, somewhat on the learning curve (mostly.) curious if anyone has any experience here in this space? I’m talking about a stationary model, not a mobile detail platform. I totally understand the location location location aspect too (rooftops, traffic count, 1-3-5 mile ring demographics). Just curious...
I’m a 20 year career guy in CRE finance, ranging from the dentist-owned office condo to $900,000,000 skyline changer projects. I am a lender with a resume in nearly every major market in the country.
But, I know that while I can be comfortable in this, I won’t get too much past that without ownership. And I have a unique need in the form of two kids with one being autistic, so I am thinking about what I can do to make sure she has a revenue source in her life once I am gone.
My thinking here is to approach a few retail owners I know through my career that own these grocery anchored neighborhood centers that are now struggling a bit in their inline space via the Amazon effect. An outparcel with a nice car wash to help lure traffic into the center. Would offer a 10% discount to those who present a fresh receipt from any of the other businesses in the center. I believe I could get a lower cost basis on the land with this approach, be located in a rooftop spot, and so on.
If you're trying to hide meth profits, it's been done.
(Sorry, had to get that out of the way.)
It's not impossible to go into a completely new line of work, investing in a franchise or retail business, but my sense over time is that most people who try (finally open that bar or restaurant, buy a fast food franchise, open a dance or yoga or gymnastics studio, whatever) are woefully ignorant of the enormous effort involved just in staying afloat, much less succeeding.
I'd start with some deep, deep surveys of existing car washes, their traffic across the seasons, estimated profitability, and issues with hiring and maintaining a decent staff.
Most car washes I used had utterly indifferent and ever-changing teen/slacker staff; so "changing" that I sometimes saw people quit, fired and hired while my car was being run. But there was one, run by an older couple, that had an older, very dedicated and skilled staff with little turnover. I even got to know many of them by name as they swarmed over my Volvo like a pit crew. They had people lining up well before opening time, most days - the exceptional service and attention to detail (yes, that's a pun) became widely known.
Many, many other viability and success issues involved, but if you aren't prepared to find and retain good, solid staff, if your "staffing" notes boil down to "keep trolling the local high schools," you're going to fail.
I’m intrigued by the car wash sector for a few reasons. One - I’m more interested in the outfits that are not heavily staffed. I’m more interested in the machine itself being the main item of service. Self serve if you will. Maybe a crew of 4 or so (would hire onsite manager and asst manager and pay them well). I’m doing dives into the different types of washes and lean more towards the self serve. Needs to be something a bit more than the one at the gas station, but not quite the heavily staffed “auto spa”. I am seeing severa YouTube case studies on these “tunnel” operations and found a solid source for the equipment and consultation services.
As I’m doing this research, I am also doing a bit of internet snooping on the owners. Find the name, find the address, and Zillow for an idea. Honestly, I’m impressed. But again, I don’t know what I don’t know.
We have a nice one near us. Located the owners info, and thinking about asking if they would be interested in a free cup of coffee and a chat. Turns out we’re practically neighbors. Appears to be a father and son company. Both appear to be living quite well from theirs. I also remember a guy in high school who’s family owned a few of the self service spray washer types and lived quite well too, and believe the son (my friend back then) inherited the business and is now raising his family on them too..
I’m intrigued by the car wash sector for a few reasons. One - I’m more interested in the outfits that are not heavily staffed. I’m more interested in the machine itself being the main item of service. Self serve if you will. Maybe a crew of 4 or so...
Uh... look at all the pretty red flags.
For one thing, even the best car wash system only does a 99% job, and finish-drying and things like windows, brightwork, tires etc. are best handled by workers. That service and diligence and attention to quality will be what builds the business, over time.
Every gas station has a crappy drive-through one, for somewhere between free-with-a-fillup and one quarter of what you will need to charge.
Also, one of the biggest mistakes I see B&M business entrepreneurs make, especially second-career ones like you, is that somehow the magical mystery machine will do all the work. Doesn't matter if it's a car wash tunnel, a one-hour film development machine (okay, obsolete), a donut maker or any other "magic box" that is supposed to do all the work while you just collect the money. They don't lead to success.
The poster child for this, for me, is things like sign-making and screen-printing machinery. Nearly every sign shop in existence is there because someone without any real talents fell for the shuck that an expensive vinyl cutting table or grand-format printer was all they needed. Lease it for $100k plus $15k annual maintenance, attend the 2-day operator's class, and presto! they were a sign designer or print shop or graphics center. Never mind that they can't tell one color from another, have the design esthetic of a turtle, can't spell and have absolutely zero understanding of what makes a business sign work... there they are, happily grinding out awful examples while trying to stay ahead of the six other truck drivers who got into the field in their area.
So if you want to run a car wash, run a car wash... the way it really should be run, and better than anyone within a mile. A good tunnel will be an asset, but it will not be an unattended, self-running money machine.
I love the concept of car washes. I live in an affluent area and I can show you why I don't think the model works as well as say 20 years ago.
1. Environmental- nobody wants you to use fresh water, they all want you to recycle the water. The chemicals/dirt/oils are need to be filtered out before recycling anything.
2. People don't keep cars as long as years back. The lease cycle keeps people from caring as much about the car (for the high dollar detailing type work).
3. Labor- it all adds up, in my area somehow they seem to use a lot of illegals. The cost of the workers hourly plus the cost of the insurance (workers comp)/payroll taxes (if you somehow pay them on the books) really spool up the labor costs.
4. Lack of cash- Nobody pays cash anymore, it is all credit/debit cards which is going to change your take home
5. Growth- when I moved to my area there was one "great auto spa type place", 19 years later there are 5. This crushes the labor pool and drives prices lower to steal business from the guy down the street. One place has a pretty neat idea, gut a regular tunnel wash and use laborers to wash the cars then drive it through a rinse halo and blow it off with a high power blower then have another crew outside wipe down the cars. The long time owner of the "auto spa type place" sold it and got out of the business.
Look at your area, if it is a poor town with rusty cars then you will starve. I left the car wash the other day and there was an M6 in front of me (125K car) and a Tesla behind me (75K car).
I love the idea but can't see how to make any money in today's changed market. I really can't see "the cash at the end of the tunnel" if you rent the land/building or if you buy an expensive piece of land and build a nice facility.
OP, I love that you want to build an income stream for your daughter.
A couple of thoughts about car washes.
We did several extended stays at a hotel in Scottsdale. Sometimes I would wake up at 2 am to hear the car wash next door at work. It was self-serve, completely automated and while part of a 24 hour gas station/convenience store, more sophisticated than your average quickie car wash. I was entranced with the idea of getting my car washed whenever I wanted. The company is Jacksons Food Stores, Inc. out of Meridian, ID.
I've been traveling a lot in the west this spring, which means bug splats like you wouldn't believe. I stopped at a self-serve car wash in Tehachapi, which had (in addition to regular stalls) one extra-tall stall that would fit a 40 foot RV. It also had a raised platform on one side you could stand on to access the roof of the vehicle. I think oversized vehicles are an under-served market. My van is 9.5 feet tall and won't fit into many conventional car washes.
I leave you with that and wish you the best of luck.
"I think oversized vehicles are an under-served market. My van is 9.5 feet tall and won't fit into many conventional car washes".
I drive a work van with ladders on top. Around me I know of ONE automatic car wash that is able to accommodate it. I often wonder why more car washes aren't built to handle work vans. They are rolling billboards after all, and I am sure people would gladly pay to wash them more often if it were possible.
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