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In-bay Automatic

Adding to your carwash family

October 11, 2010
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Currently, you are operating a successful in-bay automatic location. But you have been dreaming of opening another location. You think to yourself, “It can’t be that hard.” Guess what — it is not that easy, but with careful planning, it can be very successful.

I remember thinking when my second child was on the way, “I’ve got this daddy thing all figured out. Number two is going to be easy.” Boy, I was wrong. But I put an action plan into place and executed it carefully. I loved the second child so much that I planned for the third child.

So when you are ready to take the next step and add that next location, remember it will take dedication, discipline and execution of a well-constructed business plan. For me, each of my carwash locations is like another child in my family. Like children, I want each location to succeed. Just like the growing pains you face with each additional child, you have to be able to multi-task to run a successful multi-site in-bay automatic operation.

Create and follow a business plan
Hopefully, you wrote a business plan before you opened your first in-bay automatic carwash location. Did you stick to your plan? Did everything go as you planned?

If you are considering a multi-site endeavor, you need to write a new business plan. It is important that you have the appropriate plan in place when things get hectic at your various locations. You can revise your old plan, but I suggest you create a new plan to give your business a fresh start. Review your old plan and reuse items that helped you navigate your first location.

Create and follow action plans
Systematic processes are necessary when you are operating multiple location IBA carwashes. What are the actions or systematic steps that made your first site successful? Do you have daily, weekly or monthly checklists? If you do not, you will need them to keep you on track.

In addition to the checklists, I use action item lists that I prepare after each site visit. I list all the problems I see and any suggestions for future changes. I then assign the action items to my employees. I set a date when the items should be corrected or changed. We both sign off when the task has been completed.

Create and follow a financial plan
It is important to implement a solid financial plan. An additional location can put a strain on your finances if you do not follow a financial plan. I receive daily revenue numbers via e-mail and text messages. I know my daily operational expenses and can therefore, make adjustments quickly if I see below average revenues.

You need to prepare an annual budget for your business. If you have never prepared a budget, take your anticipated expenses and then plan how the business is going to pay for them.

You should also be preparing a set of financial statements on a monthly basis. The financial statements should include:
  • A balance sheet;
  • An income statement; and
  • A cash flow statement.

The financial statements should be reviewed each month. Actual revenues and expenses should be compared to the annual budget. As a business owner, you should be able to explain these variances. Reliable financials can help identify problems. They report the financial condition of your company. You can rely on them to help you to determine if you can expand your business or if you need to take steps to increase your cash reserves.

I highly recommend creating cash flow statements for your business. I am very conservative and like to project my business’ cash flow requirements for the next six months. It is important to have plenty of cash reserves to get through tough times. Most banks recommend businesses maintain a cash reserve to cover three months of operating expenses.

Create a crisis plan
Your crisis plan should address how to handle certain situations. Often times, decisions made under stress turn out to be the wrong decisions. Create a plan that outlines a series of steps you must follow in the event of a crisis. Here are a few examples:

A. After a big snow, which lot do you clear first? I would focus on the site that generates the highest revenue.

B. If you have multiple automatics that go down on the same day at different locations, which one gets fixed first?

C. If a storm is on its way, which location do you prepare first?

It is best to set different priority levels for the various problems you may encounter. I recommend using potential revenue loss as a gauge for setting the priority levels.

Keep quality consistent
It is very important to maintain wash quality and site cleanliness when you are operating multiple locations. These are two areas where you can easily lose focus when things get hectic. This is why I stress the importance of following daily checklists. These checklists, although mundane, will help keep you on track.

Once your new location is open and running smoothly, it may be time to look at the competition. Watch to see if they make changes to their business to better compete with you. I like to use the standard strengths, weaknesses, opportunities and threats (SWOT) analysis to evaluate my competition.

Once you have completed your evaluation, study it to determine if you need to make adjustments to your action plan to keep you ahead of the competition.

Build a brand
Now that you have planned to grow your business you need to focus on building a brand for your carwash. Remember, there is power in numbers. Branding plays a major part in the success of any customer-oriented business. Is the name of your carwash memorable? Will people remember it? What makes you stand out in the crowd?

Be known for something special. Use the SWOT analysis charts to help you create a niche market within your trade area. This will help you build your brand.

Strive to achieve these four aspects of branding:
  1. Quality: Be perceived to have the highest quality standards in the industry.
  2. Publicity: When consumers hear your name make it so they say “That’s the place where I wash my car.”
  3. Word: Own the name carwash in your trading area.
  4. Credentials: The crucial ingredient to the success of any brand is its claim to authenticity.
Use a well-crafted marketing plan to help you build your brand. There are many online advertising agencies that can help you achieve your marketing goals at the budget you set.

With the proper plans in place, a multi-site operation can become a reality for you. Hopefully you can use some of these planning tips to help grow your operation. Go make it happen. Wash on!

Bobby Willis has been in the carwash business for 13 years. He currently owns Cool Wave Car Washes in Virginia and is the Investor Market Manager for Ryko Manufacturing Company. Willis often speaks at regional and national trade shows on carwash marketing and site selection. Feel free to contact him at bwillis@coolwavecarwash.

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