The changing minimum wage - Professional Carwashing & Detailing

The changing minimum wage

Labor cost pains hit many owners’ and operators’ pockets in the new year.

While the federal minimum wage has remained stagnant since 2009, many states and localities have deviated with their own minimum wage increases. The federal minimum wage is currently $7.25 — up from $6.55 prior to July 24, 2009 — but in some cities, including New York, workers’ base wages have already been elevated to $15 for large employer companies (with 11 or more employees), effective Dec. 31, 2018.

And, while these increases are good news for workers, businesses like professional carwashes and large detailing operations are having to rethink strategies and processes in order to remain at a specific level of profitability.

Related: How minimum wage impacts the carwash industry

Businesses generally cannot save their way to success, but as the cost to pay employees has increased for many of those across the U.S., finding ways to reduce other operational costs, such as water, chemical usage and electricity, can help.

Proactive carwash operators with keen business sense have already prepared for this outcome. Whether it’s mastering your cashflow strategy, which we cover in this issue, or automating the wash process, labor expense pains can be overcome.

The industry’s technologies and systems are also evolving. Three of the critical issues professional carwash manufacturers are addressing with their products today are lowering costs, extending resources and maximizing revenue potential.

This month features the first prominent carwash event of the year — the Southwest Car Wash Association’s (SCWA) 2019 Convention & EXPO. Operators from the area and beyond, such as Dubai, have the unique opportunity to demo and inspect the newest innovations for 2019 under one roof.

In addition to seeing the latest technologies and speaking in person with the teams that build and sell these systems, industry trade show attendees also benefit from the associated educational sessions.

Although the regional and national trade shows have to put a price on these educational sessions, often with tiered registration levels, these sessions are in fact priceless. Topics range from best business practices to carwash-specific technical. If you were not able to make it to Arlington, Texas, for the SCWA event, there are several more opportunities this year to realize solutions that can help overcome new business challenges, such as minimum wage hikes.

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As everyone now knows, financial success in the carwash industry has become synonymous with the number of unlimited wash club (UWC) subscriptions that each location is able to secure and maintain. Carwash locations have even been able to transcend mediocre operational performance by signing up large numbers of UWC members. The result of this evolution into a subscription business is that the definition of an overbuilt market has changed. 

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