Connect with us
0

Blogs

Carwash safety leads to higher profits

Are you aware that washes with low incident rates earn higher profits? It’s a myth that insurance will cover the costs associated with a claim…

Advertisement

You may not be aware that carwashes with low incident rates earn higher profits. It is a myth that your insurance will pay for all of the costs associated with a claim. This is known as the 'Iceberg Effect' ― those hidden/indirect costs. The following is an illustration of a simple claim:

Advertisement
Click Here to Read More
Advertisement

      Incident – Employee Injury equals direct costs totalling $1,500

      Using the formula developed by the National Council on Safety for calculating indirect costs on claims under $3,000:

Direct Costs x 4.5 =  Indirect/Hidden Costs

$1,500   x   4.5  =   $6,750

Then of course we add the hidden costs to our direct costs for a total claim of $8,250.

Here is how that affects your bottom line. Assuming our wash has $300,000 sales with a $75,000 profit equating to a profit margin of 25 percent, you would need to generate $33,000 in Net Sales (Gross Sales less overhead/operating costs) to completely cover the total costs of the $1,500 claim.

Just think how many cars you have to wash in a given month to simply cover this 'Iceberg Effect'.

So what are indirect costs?  This is just a small sampling of them:
 

  • Lost time spent by supervisors investigating the accident
  • Lost time by supervisors completing paperwork
  • Lost time by clerical staff completing and following up on paperwork
  • Damage to tools and equipment that will need to be replaced or purchased new
  • Cost of training a new employee replacement
  • Loss of production and productivity
  • Loss of business due to damaged public image
  • Loss of efficiency due to break-up of crew
  • Failure to promptly service your customers
  • Lost time by other employees discussing the accident
  • Loss of productivity due to employee moral

As you read this remember that your competitor may already be aware of this.

Advertisement

A safe wash protects people and profits!

Advertisement
Click to comment

POPULAR POSTS

Car decals, sticker, family, jeep, window, rear window, SUV, rear wiper, wiper. Car decals, sticker, family, jeep, window, rear window, SUV, rear wiper, wiper.

Multi-profit Centers

5 smart ways to apply and remove car decals

polishing, buffing, waxing polishing, buffing, waxing

Detailing

The beginner’s guide to buffing a car

microfiber, towel, towels, laundry, caring for towels, microfiber towels, microfiber washing, washing, microfiber care, hang dry, microfiber, towel, towels, laundry, caring for towels, microfiber towels, microfiber washing, washing, microfiber care, hang dry,

Operations and Management

How to properly wash and care for microfiber towels

first impression first impression

Starting a Carwash

Site selection and design: The first impression

Connect