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Equipment / Starting a carwash

7 mistakes that can sink a new carwash

The most costly pitfalls new investors should know … and avoid.

March 27, 2013
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Whether you’re just getting into the carwash business, or looking to stay in it profitably, the path you choose for acquiring advice, equipment, and on-going support can have a huge impact on your success. Generally, you can get into the business three ways — by working directly with a manufacturer, depending on third-party consultants, or relying on a local distributor teamed with a supportive manufacturer.

          While each of these paths has produced notable success stories, the local distributor working with a strong manufacturer offers operators the most relevant advice and accessible support. Operators who choose such a distributor benefit from the distributor’s proximity and fast response times, experience, marketing expertise, staffing, parts inventory, local ties and the operational simplicity that comes from the distributor working closely with the manufacturer.

          Following are seven common mistakes carwash operators make when establishing a new location.

1. Buying Manufacturer-Direct To ‘Save Money’

          While large operators with multiple carwash sites may have the infrastructure and personnel to successfully work directly with an equipment manufacturer, the arrangement is not ideal for most retail carwash operators. And while it may be possible for an individual operator to shave a few percentage points off an equipment purchase by buying direct, it’s rarely worth giving up the distributor’s support after the sale. As well, new operators are often pleasantly surprised at how price-competitive distributors are on equipment sales. That’s because every equipment seller (whether manufacturer or distributor) must sell equipment for the best price the market will bear — and discount as the sale warrants.

2. Thinking All Equipment’s The Same

          No one can succeed in this business without access to equipment that cleans well, runs reliably and appeals to carwash customers. The truth is, only a committed manufacturer can provide the innovative products, quality design and construction, and after-sale support to enable positive outcomes in the wash bay … and a committed distributor has the ‘street smarts’ and manufacturer connection to make it happen.

          Since you want to make your living with this equipment, consider its cleaning ability, uptime potential, ease of maintenance, and simplicity of support, as well as price. In other words, think about what the equipment costs to own, rather than just what it costs to buy.

3. Depending Completely Upon Short-Term, Long-Distance Advisors

          Instead of distributors, operators can choose to work with consultants who offer to advise them on getting into the business. The problem arises when consultants who claim to be ‘objective’ also try to sell equipment, thereby earning margin from the manufacturer at the same time they’re charging consulting fees to the operator. This is a conflict of interest for the consultant, and it exposes their true motivations for recommending the equipment they hope to sell.

          Of course, every distributor and manufacturer is motivated by a similar self interest — recommending what they sell. The difference is, the distributor and manufacturer have formed a durable relationship that provides the operator with a level of support the third-party consultant can’t begin to match. What’s more, the manufacturer’s distributor network means they can offer continuity of support to the operator through many capable distributor companies — both now and far into the future.

          These local distributors aren’t just conveniently close; they’re connected to the community. By contrast, the consultant is often located hundreds, or thousands of miles away from the operator’s market. How could such an advisor possibly be ‘in touch’ with the preferences of local consumers, and demands of local government?

4. Paying Too Much For Information

          Truly great advice is often worth paying for … but ‘advise with a price’ also carries a cost for the operator. Consultants typically must charge up-front for any advice given, since they usually cannot earn on-going chemical, service and maintenance business. These ‘consulting fees’ drain funds the operator could put to use buying the best piece of property, building the best building and purchasing the equipment itself.

          On the other hand, the distributor is in a great position to advise carwash operators on the items that will most impact their success — such as site evaluation, business models, permitting, construction, marketing and signage, staffing, chemistry — and of course, equipment selection. The distributor has the ultimate stake in the operator’s success, as he looks to ensure a mutually profitable long-term relationship.

5. Building a ‘Hodge Podge’ Carwash

          Nearly always, consultants recommend multiple brands of equipment in the same bay, because they need an equipment package that helps them maintain the appearance of ‘objectivity.’ Unfortunately, operators who build these ‘hodge podge’ washes must deal with multiple manufacturers to resolve any issues, which can be frustrating, expensive and time-consuming when downtime ‘drags on’ because the vendors are ‘pointing fingers’ at each other.

          All the while, distributors understand the value of installing and operating a well-integrated carwash system, and will utilize many components of common manufacture, especially in a brand-new bay. When the distributor does use components from different manufacturers, he or she brings the hands-on field experience to ensure that everything works together as planned for sustained profitability.

6. Not Having A ‘Go To’ Support Team

          When you need service or other attention from the manufacturer, a well-established distributor will take ownership of the situation — and has the knowledge, parts access and manufacturer support to get you back in business quickly.

          If you choose to work without a distributor, you may find yourself ‘going it alone’ or trying to contact a consultant from your past (who may not be able to help when you need it most), a manufacturer and even the manufacturer’s vendors. And all of them may place blame elsewhere — none of which helps you get back to what matters most — washing customers’ cars.

7.  Building A Carwash, Not A Business

          Every new wash begins with a clean sheet of paper, and is full of potential. To realize that potential, washes should be designed and built to attract customers from the street, convince them to come back, and encourage them to return frequently — even exclusively — to that site.

          Which leads us to our last point — a good carwash is a great experience. For many operators, that experience starts with a supportive manufacturer and committed local distributor. Working together, this team can help you build the most appealing carwash — and keep it running profitably for years to come.

Marcus McLaughlin is a member of the marketing team at Belanger, Inc. and was formerly the marketing director for one of Michigan’s largest carwash chains.

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