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Blendco Systems™ Tip of the Month

Everyone Complains About the Weather... Now Someone is Doing Something About It

Blendco Systems™ Tip of the Month

February 25, 2008
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In this business, it’s natural to find yourself praying to the weather gods to smile on your carwash. For example in the Northern states at this time of year, carwashers dream of that perfect snowstorm that arrives in the middle of the week, leaving mud, snow, and lots of salt from the DOT trucks in its wake for the carwash to rinse away over the weekend. Ideally this happens repeatedly all winter long, and in many years it does … but not every year.

This leads to the idea of weather insurance — which until recently was just another dream because it is difficult to customize — but now there are actually a couple of on-line insurers getting into this business. (By the way, this is not a recommendation to try out weather insurance, but the relevance to our industry is too interesting not to share it.)

One on-line insurer is called WeatherBill, and this is how it works. Anyone can buy an insurance policy for the weather in a given area. The site guides you through a very easy assessment of the impact that weather has on your business — you provide information on your annual revenue, seasonality and the typical breakout of revenues between the weekdays and the weekend. You indicate whether your business is impacted by dry weather, rainy weather, or extremes of temperature. The site returns with a “weather impact analysis” that shows you simulated revenue over the last 15 years — a good reality check for you to see if you agree with which years were relatively good or off years.

Next, you can request a quote based on what you’d like to get a payout for. For example, if I want to be paid for any weekend day in the next two months with a payout of $300 if it rains 0.2 inches or more, that policy would cost me $1,260. Breakeven is basically 4 rainy days out of the 18 weekend days in the range.

Is this insurance, is it gambling, or is it something in between? It all depends on your point of view and how you might use it for your business, but it is certainly an interesting idea to take a look at … on a rainy day.

Laurie Sherman is Co-owner of Blendco Systems, LLC. Blendco manufactures a full line of detergents and waxes for the professional carwash industry. You can contact Blendco at: www.blendco.com.