Top 10 Do's and Don'ts

Top 10 Do’s and Don’ts for new investors

Top 10 Things to do when building a car wash:

1.     Do Tour as many successful car washes as possible

a.      The science of car washing is complicated. No one gets it right the first time, however much can be learned from experience.

2.     Do Spend excessive time on site layout, and consult with many experienced operators on site layout.

a.      Site layout will easily make or break a site.

3.     Do Focus on quality from end to end

a.      The retail business is extremely reliant on return customers, if you sacrifice quality you will continually be fighting to get customers back.

b.     Much like the restaurant industry there’s only so many chances a customer will give you. If a customer gets bad food once they are not likely to return.

4.     Do Operate independently

a.      Do not rely on someone else to maintain or service your wash

b.     Do not rely on someone else to tell you what your cost per car is

5.     Do work hard to reduce labor

a.      The overhead and administrative factor is underestimated by most.

6.     Do pay to have an owner operator

a.      Investor owned washes have proven to be less successful than owner operator facilities.

b.     If you plan on “investing” be sure your operator has a vested interest in the organization.

7.     Do underestimate your success

a.      A bad investment can take a lifetime to recover from.

8.     Do – Do it right.

a.      In everything, do it right, do not cut corners, do not skimp, it will cost more in the end.

b.     Things like architectural, a quality GC, landscaping, equipment technology, customer experience cannot afford to be sacrificed.

9.     Do closely evaluate investment vs. cost of property.

a.      When it’s all said and done you may find land as your biggest asset.

10. Do focus on revenue model rather than cars per year.

a.      The bottom line only cares about your revenue, not how many cars you can jam through in a year.

Top 10 Things not to do when building a car wash:

1.     Do not underestimate the importance of having a great architect.

a.      The image you have on the outside is the impression the customer gets long before customer service and quality of product.

2.     Do Not Invest in C sites

a.      C sites will neither profit you in car washing nor profit you in future real estate gain.

3.     Do Not Go Extreme in either direction

a.      Do not overbuild, do not under build

b.     Do not overspend, do not under spend

4.     Do Not Rely on the advice of a sales person or industry consultant

a.      Take a majority of your input from existing operators in the industry who will give you an unbiased opinion.

5.     Do Not Build because of Ego

a.      Do not follow through on a plan you are attached to yet have learned to be a bad plan

6.     Do Not inflate numbers for the bank

a.      Lying to the bank is only lying to yourself; if the bank won’t approve it you shouldn’t approve it.

7.     Do Not underestimate depreciation

a.      Washes are a dirty place; rate of depreciation is increased extremely around the whole facility.

8.     Do Not base depreciation off time, base of expected cars washed, your business model.

a.      Ex. 100,000 cars @ $10 = $1,000,000 revenue

b.     200,000 cars @ $5 = $1,000,000 revenue

c.     Twice as many cars will cost you twice as much site building, equipment depreciation… it’s more than you think.

9.     Do Not underestimate marketing

a.      Once a car wash is there, it’s only working if it’s processing much volume, keep it busy.

b.     Consider you are building a hotel, how would you feel if you never sold out and on average only 50% of your rooms were usually full? Much like conveyor capacity, it is only working if you can fill rollers.

c.     Marketing is what takes good washes to great.

10. Do Not underestimate the success that can be had and the return that can be made when a successful wash is completed.