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How to make good investments

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Ron Holub has been involved in the carwash industry for 35 years working for several national carwash chemical companies, owning a car wash and detail supply company, and serving as a general manager for a national carwash chain. He currently works for Hydro-Spray and does consulting. He can be reached at rph9168@comcast.net.
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Arguing with myself: How do I increase profitability?

April 29, 2013
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Cost cutting can be a two edged sword that may increase profitability but hopefully not at the expense of wash performance. I once worked with a very successful business executive that used to say, “You can’t save your way into profitability”. While it is hard for me to argue with myself based on his success I think that I would add “as long as it doesn’t adversely affect the product and service you are selling”. There are a lot of “little” things that an operator can do that can add up to increase profitability without sacrificing quality.

The first is to develop a comprehensive maintenance program to keep your equipment operating as best and efficiently as possible. Leaky valves, hoses and pumps or worn out nozzles means money is literally going down the drain. Increased water and chemical costs are something no one can afford in today’s economy. Are you using the most energy efficient fixtures and equipment? Are your chemicals cost effective? Do you really know your use cost and do you check it periodically to make sure it is constant? These are all things that can be maintained and checked without sacrificing wash performance.

How about labor costs? I have always been a believer that having well trained, well paid employees is a truly cost effective way to operate. I have seen many times when two or three good employees can easily outperform four or five average or poor ones. The key is good training and supervision as well as a fair wage and good working conditions and relationships. How much time do you spend on training an employee? Do they know what their responsibilities are and how to perform them the way you expect them to be? How well do you pay and treat your employees? Do you provide a good work environment? About now you are asking yourself “What does this have to do with profitability?” A well motivated and trained employee can be counted on to do those things the way they should be rather than let things like leaky hoses go unrepaired or fail to maintain the wash as it should be. Ultimately that goes a long way to enhance the bottom line.

What volume producing promotions work the best? It may sound simplistic but the answer is the one that achieves the goals you set for it. Simply offering discounted washes or coupons just for the sake of doing it makes no sense. What are you trying to achieve? Are you trying to attract potentially new customers? Do you want to increase frequency of existing customers? Are you trying to increase activity on slow days? These and several other desired outcomes are all valid. The problem is have you design a promotion that will achieve those goals and even more important do you have a way to evaluate the results to see if you have accomplished your goal?

I think my argument with myself has ended up in a stalemate. Raising prices depends on whether you are willing to take the risks involved with your business. How best to achieve a more efficient profitable operation depends on your ability to design and carry out your plan. If you are not capable of maintaining your wash maybe hiring someone else to do the maintenance may pay for itself or even save money. The same goes for an effective promotion. Not all of us are marketing geniuses. As far as employees go, that is up to you to institute and run an effective employee management plan.ncreasing profitability is a goal of all operators. There is no obvious approach to accomplish it. Maybe it’s time for you to argue with yourself to come up with a plan that will work for you.