|During the presidential campaign of 1928, a circular claimed that if Herbert Hoover won the White House, there would be “A chicken in every pot and a car in every garage.” Not long after Hoover took office, the stock market crashed and the country launched into the Great Depression.
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What does this have to do with the car wash industry? Nothing, really. I just wanted to show that the title I used had some history behind it before I modified it to suit my purpose.
Now, to my point. There are some areas of the country where it appears as if there truly is a car wash on every corner. For those areas, the problem is probably there to stay as, once a wash is built; it is rarely converted into another use. But what about the rest of the country where over saturation doesn’t exist? At least not yet. Can this be avoided?
In the CarWash College New Investor Seminar we stress site selection and the importance of maintaining a meaningful distance from any existing operators. We review how different traffic patterns can affect how far of a radius should be maintained, and emphasize that building too close to an existing wash and splitting traffic counts isn’t healthy for either wash. (At a minimum, differentiate yourself. If there is an existing full serve close to where you intend to build, operate as an express or flex.)
To this we often hear, “But the guy down the street does a lousy job. I know I can do it better.” and they end up building a short distance away from their competitor against all advice. Everything goes well for a while. Volumes improve month over month until the wash down the street eventually folds up shop and goes out of business. Game over, right? Wrong! Now the bank takes over the other wash and wants to get rid of it fast. (As I mentioned earlier, once a wash is built it is rarely converted to another use.) An experienced operator from across town buys the wash from the bank well below market value, puts some new equipment in it, and cleans it up. Now, the new wash that put his competitor out of business is struggling to stay alive because the older wash has less debt service and is now washing cars for less, to gain market share. Had he found another property, a reasonable distance away from any competitors, would he be facing this dilemma?
Most new investors to the industry have gone to an existing wash site where the owner really did his homework; high traffic, great visibility, easy access and thought to himself, “This guy is just raking it in. I should build one of these right down the street. There has to be enough business for both of us.” On rare occasions, that may be a reasonable assumption if the traffic counts and demographics support it. The more likely scenario, however, is now there will be two struggling washes. What we would hope a new investor would say to himself in this situation is more like, “Wait a minute. I shouldn’t build down the street from this guy. I should go find a site with these same traits, where there are no car washes and I can have all the business to myself.”
Sounds simple right? Go somewhere where no one else has built, on a lot that meets the demographic and traffic requirements? It is simple. It’s also smart and prudent. It’s also extremely difficult to find, but for those who really put the time and effort in, for the ones that won’t settle for second best, it seems those sites manage to find them.
Site selection is probably the single biggest decision you will make regarding the success of your business. Do you really want to cut your potential success rate in half right off the bat by building in close proximity to another wash? It doesn’t make sense!
Choose wisely. Remember, you pay for the right site only once. You pay for the wrong site every day.
Bob Fox is an instructor at CarWash College™. Bob can be reached at [email protected]. For more information about CarWash College™ certification programs, visit CarWash College or call the registrar’s office at 1-866-492-7422.
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There are some areas of the country where it appears as if there truly is a car wash on every corner.