While reading through an old magazine, I came across an article where the author discussed the merits of using intuitive reasoning rather than conventional location theory to select a site for a new express lube operation.
The author’s argument was that superior customer service may actually be more important to the ultimate success of a car-care business than having a good site and may also be a useful strategy to combat the rising cost of acquiring and developing commercial property.
But is it true?
If this idea makes you nervous, it may be wise to stick with the fundamentals.
In site selection, the location is the trade area where you intend on competing and the site is the piece of property on which the carwash will be built.
Depending on the scale and scope of the business model, a location could include a region, county, city or neighborhood and it can be measured in terms of radials, driving time, zip codes, census tracts or traffic analysis zones.
There are three basic types of settings.
Site analysis worksheet
In general, these worksheets include a list of variables and a rating system that is used to measure the potential success of a carwash site.
The variables usually include things like:
The investor selects the description that best matches the actual conditions at the site and the black box spits out a score that can range from “no-go” to “barn-burner.”
Unfortunately, most of the site analysis tools that are used today were developed when the carwash industry was very different. In today’s marketplace, things have changed considerably.
Consumers are more convenience driven and they have more options on where to clean their vehicles. Many markets have become far more competitive in terms of the number and types of competing carwashes.
I set up several of these site analysis models based on a fictitious site in my market and the black boxes told me I had a “barn-burner.”
To test the sensitivity of these models, I maximized the competitive density factor and held all other variables constant.
In all cases, the models told me that I still had a “barn-burner.”
Don’t go it alone
In other words, don’t try to do it alone. You will soon discover that the best investment in your carwash business may actually be the time, effort and money spent for professional help to look over your shoulder before you spend any real money.