Professional Carwashing & Detailing

Branching Out

October 11, 2010
The International Carwash Association has been touting the benefits of multiple profit centers for years, so there is probably no need to explain how this concept leads to increased revenue, more productive employees and a more marketable location. (If you're interested in connecting the dots, you can always check it out at www.carwash.com. Just look up “additional profit center” in the keyword search.)

The next 12-24 months are guaranteed to test your patience as a carwash operator. Carwash volumes are likely to be stagnant as gas prices and consumer worries rise. The last thing you want to do is add another headache to your business. Instead, you need to find the profit center that will add enough revenue to keep you out of the red, while at the same time not hampering your abilities as an operator.

Professional Carwashing & Detailing has gathered a few of the most popular profit centers for carwashes and abridged the business proposition for you. You'll notice the prices are generalized (marked with dollar signs according to how high the cost of investment is) and the operational requirements are simplified. This is not meant to imply that adding a profit center is an easy process. It is not. But adding a profit center is becoming close to a necessity as consumers demand convenience in louder, more impatient voices. In some cases, an additional profit center may be supporting your carwash business as the country weathers some trying economic times.

As you consider the following options, keep in mind the following:
  1. The money you are willing to spend on an additional profit center;
  2. The space in which you have to put the profit center, as well as the layout and traffic flow of your site;
  3. The labor and management specifics of your business as compared to the labor and management the additional profit center will require;
  4. The “open” factor (the number of hours per day your additional profit center will be open compared to the hours per day your carwash is open); and
  5. The type of customer that currently patronizes your carwash as well as the type of customer you would most like to attract to your business.

Spotlight: The coffee shop/smoothie stand
Best for: Full-serve and flex-serve locations
Initial price tag: $
Biggest advantage: Improves the customer's waiting process
Greatest disadvantage: Additional revenue is minimal

Coffee customers like to talk, and they like to talk about where they get their coffee, explains Miles Johnson, owner of MILES Autospa, an upscale carwash in Cool Springs, TN. According to Johnson, his café customers do most of his marketing for him.

“The regulars we have, they're not a significant means of revenue, but it's nice to have them here every day and they talk up the business. They're like promoters for us,” Johnson says.

Johnson always pictured a coffee shop adding a certain element of class to his full-serve carwash. He had already planned to build a stylish lobby, complete with flat-screen TVs, high-speed Internet and a fireplace when he started researching his coffee options. He was surprised when Starbucks representatives told him they had changed their policy; they would no longer offer local kiosks to businesses unless they were national accounts, like a hotel.

So Johnson turned to Bongo Java, a locally-brewed coffee that is well known in the area. This local coffee gave him a marketing edge; he was able to brand his coffee bar with its own name, OCTANE, which capitalizes on the carwash's vehicle theme. Several drinks also play into this theme, including SUV, V8 and I-65, named for a nearby highway.

Johnson's coffee bar is set up at his point-of-sale register for the carwash, meaning employees have the opportunity to sell to each and every customer. His facility can't accommodate a drive-thru, but he still has regular faces that come each and every day, park outside and walk in for a coffee to go.

His set-up is first-rate, just like his carwash. Working with the local brewer, he was connected to well-reputed vendors. Along with the usual coffee makers, his outfit includes a high-end espresso machine, heavy duty coffee bean grinders and coffee pots. The coffee bar also sells bottled water and sodas.

Another advantage of the coffee bar is the increased productivity of his employees. All of his staff is cross-trained to know how to brew coffee and work the counter. On busy days, he staffs dual registers. On slow days, it gives his cashier another way to increase ticket averages.

The feedback so far has been extremely positive, Johnson says. “It takes their mind off of the wait. Now they utilize that time to savor the coffee and use our lobby to peruse magazines and it makes that 20-minute wait go by much faster.”



The fast food joint
Best for: Express exteriors
Initial price tag: $$$$
Biggest advantage: People gotta eat
Greatest disadvantage: Management headaches

This profit center is not for the faint of heart. Be prepared to deal with a high-cost of investment and heavy-amount of management. If you have a good piece of property, the end result is almost always positive, especially if you're tacking on a well-known name.






The dry cleaners
Best for: Full-serve locations
Initial price tag: $$$
Biggest advantage: Encourages more regular visits
Greatest disadvantage: Labor intensive

Perfect for the full-serve owner whose customers love to multi-task. If your customers are already using your lobby to power through their lunches, investigate the extra cost of adding a dry cleaning businesses to help them check one more to-do off their list.






Spotlight: The pet wash
Best for: Self-serve locations
Initial price tag: $
Biggest advantage: Marketing edge
Greatest disadvantage: Daily maintenance

If you're not a pet owner, you might not want to consider adding a pet wash to your business, according to Paul Doerr, owner of Quick Clean Car and Pet Wash in Akron, OH. Pet owners will be more likely to put their heart and soul into the business, which requires cleaning and maintenance throughout the day, he explained.

“You have to approach the pet wash business as though it's equally important as your vehicle wash, even though the revenue stream will be less by comparison,” Doerr says. “If you're going to do it, do it first class.”

If you're ready to add a pet wash to your business, be prepared for an overwhelming response from the public and from local media. Doerr's pet wash was the first in his quadrant of the state, and he had coverage from the city's daily newspaper, the local weekly newspaper and two different television stations. Other pet wash owners report similar media hype. Make sure your carwash is prepared for visits from journalists and camera crews and consider how to take advantage of their coverage.

Doerr's unit is a waist-high, self-contained stainless steel tub with coin acceptance. The unit ran him about $7,500 a few years ago, and he later added credit card acceptance for $1,800. His three-bay pet wash is away from the carwash building, but many carwash owners are transforming under-performing self-serve bays. He said his next pet wash will include higher ceilings with fans for circulating air in the summer months

Where you house your pet wash obviously affects the cost of your investment. Erik MacPherson, president of TMC Pet Vending Solutions, based in St. Pete Beach, FL, said standalone units from his company start at around $22,000 for a complete set-up.

As for revenue, Doerr says you can expect it to be in-line with what your typical self-serve bay would generate based on local demographics, marketing, quality of the wash and amenities.


The self-storage facility
Best for: Self-serve locations
Initial price tag: $$
Biggest advantage: Requires little day-to-day management
Greatest disadvantage: Needs a large footprint

An oldie but a goodie, the self-storage facility requires very little from you other than space. Great for rural carwashes that aren't on an A-1 piece of property, this business helps maximize revenue for self-serve businesses.


The fast lube
Best for: Full-serve or express exterior locations
Initial price tag: $$$
Biggest advantage: Good cash flow
Greatest disadvantage: Employee management

It doesn't get much better than pairing a car care business with a car care business. Your customers already trust you to maintain the cleanliness and paint finish of their car, why not add their engine and inner-workings to the list. Added bonus: the fast lube can be as complicated as you want it to be. For express operators, that means a couple 10-minute oil change bays. For full-serve operators, that means brakes and tires and anything else that might make you money.



Spotlight: The Laundromat
Best for: Self-serve or in-bay automatic locations
Initial price tag: $$$
Biggest advantage: Continuous, steady income
Greatest disadvantage: Quarter headaches

If he's being honest with himself, Michael Racine, owner of Washland, a coin-laundry/carwash business in Plattsburgh, NY, will admit that his laundry is more profitable. But Racine's first love is his carwash, so if he has to operate the laundry to run the carwash, he will.

“The laundry is a steady source of income; it's been much more reliable and profitable. But my passion is the carwash,” Racine says.

Racine is an accidental laundry owner. He bought a couple coin-operated washers and dryers when he was still in college. He had bought his first apartment house up the street from a run-down Laundromat and decided to give his tenants a better option. He was shocked when the machines paid for themselves within a couple months.

“So I went down to the owner of the Laundromat, which was really, really run-down; probably the most run-down Laundromat in America. I told him if he ever wanted to sell the place, he should let me know,” Racine explains. He made the same offer to the owner of the building the Laundromat was housed in. Within six months, both the coin-laundry and the building were his.

In 1996, a fire destroyed his coin-laundry. Starting from scratch, Racine rebuilt the coin laundry and added some apartments. Knowing his ultimate goal was to open a carwash, Racine re-named the business Washland so that it could someday be plastered on a sign above the carwash. He had the name trademarked, as well.

It would take several more years before Racine could get his ducks in a row, but he eventually was able to open a carwash across the street from his Laundromat. His lifelong dream was realized, but it hasn't all gone to plan.

According to Racine, the biggest mistake he made in his calculations was in how many customers would use both businesses. Originally, Racine estimated this number to be about 75 percent, or at least more than half. Today, Racine thinks the actual number is between 10-15 percent. “It's two totally different demographics,” he explains. But having cross-customers is not as important as having cross-promotional tools, Racine says. “I think anybody thinking about trying to do this combination, I don't think they have to worry about the customer base coming from their existing customers, because that's not as important as the customers you're going to gain,” Racine explains.

Aside from financial security, the biggest advantage of joining the two businesses has been the marketing aspect. Racine is able to use one name and oftentimes, one advertisement, to push both businesses. He also ties the two properties together with a mutual promotion, Wacky Wednesdays, where both businesses are discounted on the same day.

Racine estimates the coin laundry adds about 20 man-hours per week to his carwash maintenance schedule, which isn't much in the grand scheme of things. A good handy man should be able to work on both businesses flawlessly. “It's really not a lot of extra management,” Racine says.

As for the investment, Racine estimates he spent about $250,000 rebuilding his laundry a few years ago, and some operators spend double that on equipment and building today. Size is very important; the larger the better, he says. An ideal building would include 20-25 washers and at least 10-15 dryers in about 2,000 square feet. And remember parking! The average customer will use three washers, so for every three washers, you need a couple dryers and a parking spot, Racine says.

One last tip from Racine: Spend the extra money and buy steel-braided hoses for the back of your washers because rubber hoses break after a year or two. Steel-braided hoses are twice as expensive, but Racine says his hoses are now more than ten years old.


The c-store/gasoline
Best for: Express exterior, in-bay automatic or self-serve locations
Initial price tag: $$$$
Biggest advantage: Increased volume
Greatest disadvantage: Gasoline profit margins are shrinking

At a time when gas prices are getting all of the attention on national news, this might be the last profit center you want to consider. Keep in mind that you can operate a convenience store without gas pumps. Either way you slice it, the gas brings the customers, though. You'll have a commodity on site, not just a discretionary purchase.




MISCELLANEOUS
And finally, some other ideas to consider that are a bit more off the radar:
Ice vending: $
Propane vending: $
ATM or bank services: $$
Post office services: $$
Tanning or beauty salon: $$
DVD kiosk: $








Editor's note: Information included in this article is believed to be accurate, but fees, terms and financial requirements change often, so contact companies for the most up-to-date information. Franchise information obtained from www.franchise.com or www.franchise.org.


Kate Carr is editor in chief of Professional Carwashing & Detailing. She can be reached at kcarr@carwash.com.