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The best and smartest way to recover from an economic downturn is to maintain and build volumes and revenues while simultaneously cutting unnecessary costs and improving work organization and flow. But how?
“Trying to make more money but spending less to do it is the objective, but not an easy proposition,” explained Michael Jacques, eastern regional sales manager for MacNeil Wash Systems. “Being aware of our expenses forces us to look at what we are doing and consider making some changes. When things do pick up again — which is what typically happens — we should all, manufacturers and operators, be in a better place.”
Paul Fazio, president of Sonny’s Enterprises, Inc., agreed. “I do think we, as an industry, will come out of this strong. I am very positive about the industry and where I expect it will go in the future,” he elaborated.
In the meantime, Professional Carwashing & Detailing tracked down the experts to walk you step-by-step through your operations to find the hidden efficiencies that can save money and time, as well as ways to dual-purpose your staff and equipment. Read on to discover their best and brightest ideas to turn business around in 2010.
The labor component
Whenever the economy hits a new low or lulls a bit, the immediate reaction is to reduce labor expenses — but that might only help in the short term, according to David Dougherty, senior product manager for PDQ Manufacturing. Instead, Dougherty suggested operators find a way to reallocate labor expenses.
For example, Dougherty said operators can find individuals within the operation that can serve dual purposes. “You may have a great technician who may also have excellent interaction with customers; leveraging the skill set of every employee is critical,” Dougherty explained. “If reductions are ultimately required, keeping employees that can wear many hats will prove to be a tremendous advantage.”
Jacques agreed, adding that operators should focus on specific areas where they currently need the labor in their wash process, such as wheel cleaning.
“[This is] a very difficult area to produce good results and meet customer expectations,” Jacques said, but most manufacturers have recognized this and subsequently developed equipment which can dramatically reduce and in many cases eliminate the need for employees to do this.
Jacques said prepping the vehicle before it goes through the tunnel and towel drying it afterwards might also be unnecessary chores depending on the wash’s equipment set-up, but operators should be conscious of the customer’s expectations. “Removing this element of the wash can potentially make customers feel as though they may not be getting what they used to and that quality has diminished somewhat at their favorite carwash,” Jacques cautioned, adding that it is up to the operator to promote any new procedures.
“Educating your customers is the best way to let them know what you are doing and why,” he explained.
On another note, Joseph Biello, CEO of Joseph Biello Company, LLC, Carwash Consultants and Brokers, said operators should concentrate on perfecting their scheduling routine in order to eliminate over-time pay. “[It] is one of the best ways to cut labor expenses,” he said, adding that operators can use staggered start times in order to accomplish a reduced schedule.
“Hypothetically, you’d have your key staff members work Wednesday through Sunday, from 10 a.m. to 6 p.m., a 40 hour work week. Fill in the vacant hours accordingly with part-time employees to eliminate overtime.”
Update your equipment
To return to Jacques’ point about using equipment to reduce labor, Dougherty said many sites are automating their operations in order to better control expenses. “In-bay automatics have been run with little to no labor for years, however with improvements to traffic control systems, many full service operations are moving toward either full or partial automation,” he said.
Dougherty said systems like PDQ’s Access Traffic Management System allow operators to selectively reduce labor costs, while maintaining the wash’s quality.
Jacques said new equipment also presents up-selling opportunities. For instance, on-line tire shining can generate higher ticket sales but doesn’t require an additional labor component.
Biello agreed, adding, “Proper equipment selection is most important; the less time labor spends on cleaning and drying the car the less it costs to wash a car.” He suggested operators research efficient dryer units, as well as front-to-back mitters, cross mitters, flex wrap around units and side/rocker combination units to improve the wash quality while simultaneously reducing the need for on-line labor.
Concentrate on the known costs
According to Dougherty, there are many types of expenses for carwash operators, and a great many of these expenses is unfixed, such as maintenance expenses. “The savvy operator will focus on the expenses that can be controlled,” Dougherty said, adding that a complete analysis of expenses should be performed annually to try to find controllable expenses.
For instance, Jacques recommended operators review their utility costs andwater consumption, which can be improved with the use of variable frequency drives or the addition of energy or water-efficient equipment.
“Dryer intake air valves are a great example of power reduction for the enormous amount of energy that a dryer system can use,” Jacques pointed out, and chemical arches are more efficient today, as well.
“It is important that operators look at the right places to try and reduce costs,” Jacques cautioned. “For the most part I feel today’s operators are aware of the importance of proper chemical usage and know that this is not a good place to try and reduce costs. It is important that you do not jeopardize your wash quality to pinch a couple of pennies.”
Biello added that operators should refine water consumption through proper nozzle selection, recycling, energy efficient motors, proper chemical metering, etc. in order to reduce overall costs.
Improve ticket averages
No matter the amount of efficiencies improved at the carwash, Dougherty said operators should also concentrate on improving sales in order to balance rising costs or declining volumes. “Many entry stations allow for customer ‘buy-ups’ and a’ la carte selling, which ultimately increases the average price per wash,” Dougherty said, suggesting operators maximize added-value services like total car protectants.
Dougherty and Jacques both suggested that operators consider revising their menus and re-packaging their services. Some entry stations will even allow customers to purchase loyalty packages, with no need for a sales person at the cashier. “[These packages] bring in higher revenue per sale as well as improving customer loyalty can easily be accomplished by using today’s technology,” Dougherty explained.
Biello said a monthly unlimited wash club can be a very effective selling technique. “This promotes loyalty and your greeter always has the capacity to up-sell,” Beillo explained. “You must deliver a quality, super consistent clean car with exceptional customer service and charge for the service. All the rest will fall into place.”
Above all, be sure to hold your prices. Jacques said some operators have a knee-jerk reaction to reduce prices or offer a cheap entry-level package to bring in volume, but these tactics hurt business in the long run.
“It is necessary for the operator to show value,” Jacques continued. “If an operator wants to add an additional service to bring ticket averages up, it is essential that your customer feels that they are getting something for that additional charge. Spend some time in the marketing area. Ask if your marketing is effective or not, and if it is not than review and revise your plan.”