It’s the summertime and here on the West Coast we are coming into warm, dry weather. We dodged a bullet by not having water restrictions enforced due to the drought conditions, and as the industry continues to grow, a lot of people have been contacting me about getting into the business.
Two of the things I am most often asked are: How much money is needed to get started? And, what is the potential ROI? My answer is simple. Do you have at least $1 million in liquid assets that you can afford to lose? And, can you live with an approximate 15-20 percent annual return? Most will cringe at that those two prerequisites as they are suddenly hit with a reality check.
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Those who do not flinch are ready for the early stages of getting into the carwash biz and the questions move to: Where should they begin and what kind of carwash model will work best? So, for this article, we are going to discuss one model which continues its success across the United States for various reasons. That model is the express carwash.
A growth in popularity
Express carwashing has been popular for quite some time, especially all along the entire East Coast.
Here on the West Coast they are becoming more and more popular and for good reason: There are so many challenges that come with today’s labor laws. Such laws make it increasingly difficult to open and run a full-serve carwash, and operate at the same profit level that was once enjoyed many years ago. Now that’s not to say that full-serves are unprofitable or risky; just the opposite, they are very profitable; you just have to know what you are doing and must be cognizant of the environment you operate in.
Read also: Additional profit center analysis
So why express? First and foremost, there is virtually no labor! That’s not to say there are no employees whatsoever, but there are only a handful and they don’t actually "touch" the car. This eliminates the need for surety bonds and other types of added costs that are now part of the full-service model.
Second, by not really having any labor, the need for labor management is reduced. Which brings us to the point of what express carwashing is all about: Volume without labor.
The success formula
There are definite factors and formulas that go into making a successful express wash which we will discuss in a future article, but for now let’s concentrate and focus on the operational aspects of express carwashing:
- Due to the size of the property, the line to the carwash entrance and queuing area is in a straight line, but sometimes it can be in a curved pattern or shaped like a U-turn to enter the actual wash, to save on room. For the exit, drivers might also have to drive straight out, or off to the side or do a U-turn to leave the property or to get to the vacuum area.
- The greeter/greeting station is all automated and contained in a kiosk. However, there are still some express carwashes that use an actual live person inside of a booth, and this has proven to be useful and appreciated by the customers. This call is up to you.
- The tire cleaning, wheel cleaning and tire dressing applicators are all automated and actually work really well and in many cases look better than hand applied methods which of course, will cost much, much more.
- The tunnel itself tends to be a little longer (100-200 feet) and full of very high tech and expensive equipment that is usually geared towards high strength industrial type cleaning vs "gentle hand wash" type equipment.
- There is also a growing trend to add some type of vending which offers customers various car care products (towels, interior cleaning products, fragrances, etc.)
- Usually, there are also free self-serve vacuums available to customers, and some owners have installed air nozzles. Please note: Some carwashes (particularly the busy ones) put a sign reading: 5 MINUTE LIMIT. This helps reduce complaints and gets customers moving along much faster.
Odds and ends
One of the great facets of the express model is there are not a lot of payments made with cash. This, however, changes in more urbanized areas, but for the most part, the transactions are done electronically.
Another important thing to remember is maintenance inside and throughout the carwash property. The more customers you have at the facility, the more maintenance you will need to do. Preventative measures in this area will save you a bundle in cash and headaches.
Till next time … keep all lanes open!
Christopher C. McKenna of McKenna Assets LLC, based in Redondo Beach, CA, can be reached at 310-947-9711, or via email at firstname.lastname@example.org.You can also visit his website at www.carwash-consultant.com.