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David Daniels understands the importance of persistence — a lesson especially important during an economic recession. No matter how many lenders told him they couldn’t or wouldn’t fund his carwash project, he continued to knock on doors and make phone calls. His determination paid off; today he is the owner of Car Wash Express, LLC, a 120’ express exterior conveyor which opened on August 15, 2009.
The loan process
Daniels’ path to carwash ownership started in June 2007 after he spent 25 years in the real estate and new home building industries. Sensing the imminent slow down in those markets, Daniels decided the time was ripe to realize his dreams of running his own business. He started approaching lenders only to realize that not everyone shared his enthusiasm.
“I was caught in the middle of the financial crisis,” he explained. “Financing was getting extremely difficult for a first time investor. This was a big number for me since I had quit my job to pursue this full time and had cashed in most of my investments to have the required down payment.”
To throw another wrench into Daniels’ plans, the property’s owner insisted on a ground lease. “The first seven or eight lenders I spoke to wouldn’t even consider a ground lease,” Daniels recalled. “There were a lot of sleepless nights,” he admitted.
Eventually he found a lender who specialized in small business funding; a branch of the United Parcel Service, UPS Capital. He laid out his plans for a one acre parcel in St. Cloud, FL, near the city’s Home Depot and Wal-Mart on a highway with a 50,000 daily traffic count and started the paperwork for an SBA loan (7A).
The loan finalized in March 2008 and required 20 percent down for the $1.9 million project (without land costs) and Daniels spent over $100,000 prior to closing on civil engineers, surveys, architect and other expenses, but it was all worth it when construction began in March 2009. He didn’t even mind filling out the loan paperwork for a second time when the project surpassed the deadline terms because his filing date now made him eligible for an incentive the Obama administration passed as part of its plan to stimulate the economy.
The construction process
St. Cloud, a city of about 35,000, is a relatively up and coming city, Daniels said, which maintains a “small town feel.” The area experienced a development boom when land in nearby Orlando started to run at a premium and home owners were drawn to the affordable housing market and lack of congestion.
“The reason I focused on this area is because there are no other express tunnels within 10 miles from this site and only one full-service five miles to the west in Kissimmee,” Daniels explained.
In December of 2007, Daniels hired a civil engineer to start the process with the city for a permit. Fortunately, his property was already in a zoning classification for a carwash, but, not surprisingly the permit process still took 14 months before final approval was granted.
In the meantime, Daniels attended the 2008 Car Care World Expo and contacted every major equipment supplier. “I was overwhelmed with the amount of suppliers, but I really learned a lot through the process,” Daniels said. After much research, he chose Ryko equipment and worked with Mid-Florida Car Wash, a local distributor headed by Chris Lee and Harold Chenowith.
Daniels broke ground in January of 2009 and held his grand opening eight months later in August.
Daniels’ express exterior tunnel is 16’ high with Extrutech panels on the walls and ceiling, one set of wraps, rocker panels, side brushes and two top brushes. “The choice to install a top brush instead of mitters was to keep the tunnel as open as possible,” he explained.
The end of the tunnel features a Motor City Wash Works tire brush and tire shiner, and two ICS Auto Sentry cashiers mark the entrance. Four large windows along the tunnel allow plenty of light into the carwash while the exterior is concrete block with stucco and a tile roof.
“My real estate background helped me since I was used to the construction process; reviewing blue prints and materials used for the construction,” he stated, “and of course designing the building for maximum curb appeal.”
He designed the building to include areas for an employee break room with lockers, a microwave, refrigerator, water fountain and restroom as well as a manager’s office and at the tunnel’s exit, a room which can be converted into a customer lounge in the event that he decides to add detail services to convert the wash to a flex-service model.
The wash features 19 central vacuum spaces designed by Vacutech with a tube system and canopy with overhead lighting attached. His is the first wash in the area to have such a system, Daniels said.
Daniels takes pride in his bright and modern red, yellow and blue carwash. “I always believed if you think retail and put some design in the facility to make it stand out the customers will follow,” he explained, adding that he believes the look and curb appeal of his carwash are a large part of his success so far.
“I didn’t want it to look like a run of the mill carwash. I was trying to come up with a Mediterranean-style look,” he said, indicating the columns which line the building.
Only four months old, Daniels’ carwash is already meeting and exceeding his expectations. In its first 30 days, Car Wash Express saw 5,000 cars through the tunnel with only a discounted wash special and a large “Grand Opening” balloon.
“It was a lot of work and quite a gamble since you are spending lots of money on the front end before your project is permitted and approved by the bank,” Daniels admitted. “And of course with all the pro formas, projections, and due diligence you never know if a site will be profitable until the doors are opened.”
His pricing ranges from $5-$12 and one of his four employees or manager is always at the pay stations to assist customers as well as pitch the up-sell. His employees have also been handing out five-question surveys for customers to offer feedback. Responses have been overwhelmingly positive and Daniels has also learned that there is great interest in additional detail services, so he anticipates adding a flex-service component later this year.
Also in the works for the next 12 months are ideas to grow the carwash’s new monthly unlimited club as well as its fleet account business. Daniels has also started working with community and charity groups who are interested in fundraising through wash sales. “What I’d like to do is continue to grow the business by going out and getting fleet accounts,” Daniels said. He already has a few contracts with the city of St. Cloud, and hopes to add a few more in the first few months of 2010.