Selling your wash? Here's how to prepare
Whether you’ve decided to enter a new line of business or you’re relocating your carwash chains’ market area, careful steps should be taken when putting your property up for sale and looking for the right buyer.Outside help
The first thing a carwash owner should consider after deciding to sell a property is to retain an consultant with the credentials and experience to help in preparing for the sale, according to Harvey Miller, president of Car Wash/Oil Lube Consultants, La Quinta, CA.
Miller noted that the seller should consider appraising the property before contacting a buyer; simply guessing at the value could prove misleading.
Also, make sure you understand the carwash market you’re in and what most buyers want:
- Is your property going to be a costly fixer-upper?
- Or will it be a comfortable transition of operation for the new owner?
Another step that should be taken before putting the property on the market is to prepare a professional business offering packet that includes detailed information about your site.
Miller said that it’s not enough to include the demographics of your area; you need to make sure you clarify community information, improvements made to the property, and be sure to offer records of business dating at least three years back.
Deduct all personal expenses from the records in order to get a clear idea of the capital used for the business without miscellaneous expenses.
Also, make certain that the property is zoned.
It may be on a conditional use permit and if the city has made zoning ordinance changes, there might be a problem that can hinder your attempt at closing a deal if addressed by the buyer.Realtor’s angles
Check with various commercial realtors in your area in order to get a feel for the value of your carwash, but also make sure to contact carwash consultants to get a more catered opinion on the matter.
Compare the estimated values of your property to the costs of building something like it from scratch. By doing this, you may find an angle or sales tactic for negotiating with a potential buyer.
According to Norris Streetman, Streetman Realty, LLC, Tulsa, OK, most buyers aren’t going to want a property that needs a lot of repair and retrofitting.
In order to conduct a successful sale of a property, an owner needs to understand all of the necessary changes the buyer will need to make in order to have things running and be able to compete in the market where the carwash is located.
Know how your equipment is maintained and keep a maintenance log, said Streetman. This log is a great tool for a buyer that is new to the industry, and serves as proof that you’ve maintained the value of your property.
Common buyers who may be interested in purchasing pre-existing carwash locations include:
- Car-care competitors in your area
- Investors planning post-retirement income
- Business owners looking for a career change
- People who want to become entrepreneurs
It may also be wise to find yourself an attorney who can understand sales agreements and the carwashing business before you sign any offer made.
Many times a seller is anxious and will sign the offer or counter-offer, but backing out of a deal by either party could result in a non-performance lawsuit.Goodbye competition
While other carwashes in your area may have been considered competition in the past, if you decide to sell your site you may want to take those other businesses and business owners into consideration.
Take a look at carwash or car-care owners in your area, and get a feel for their business in order to understand the level of competition your location has.
If you’re down the street from a major carwash that can easily trump the performance of yours, you may have a more difficult time selling to an experienced prospect that can identify that handicap.
When you’re ready to sell, run an advertisement in your local newspaper and also contact Professional Carwashing & Detailing magazine for an announcement in the classified section.
According to Streetman, the downside with advertising locally is that you may receive call backs from people used to purchasing lower-cost property such as houses, and lack knowledge of the carwash industry.
Most of these interested parties will be shocked by the high costs of investment and money down for a carwash, and will only waste your time as your property depreciates in value.
The benefit of networking with other carwash business owners in your area, contacting state or regional carwash associations for leads and advertising in a trade journal will ensure that you can reach a targeted, industry specific audience.