Earlier this year, the International Monetary Fund reported that the U.S. economy is projected to grow 2.7 percent this year. But, this isn’t the only positive news found in an economy that not only appears to be recovering from the tumultuous Great Recession, which was in full swing a decade ago, but also actually growing.
Additionally, many carwash operators might have noticed in recent months that the available labor pool is shrinking and that quality talent, when found, needs to be retained. As reported in March, approximately 313,000 jobs were created in February 2018, and the national unemployment rate remained unchanged at 4.1 percent, according to the Bureau of Labor Statistics.
With more people commuting back and forth to work and more discretionary funds in their wallets available to spend on services like professional carwashing, how can new investors maximize their new business’ profit potential and capture rates? It starts in the beginning at the site selection process.
A-plus carwash sites
What qualifies as a prime location in the professional carwashing industry? According to Carl Howard, Autobell Car Wash’s chief operating officer, A-plus sites in this industry have certain similar characteristics. Those commonalities, as noted by Howard, include:
- Being situated with significant car counts passing the front of the store (minimum of 30,000 cars per day)
- Having access to that full car count (is it a divided or obstructed highway, or can customers easily enter the site from both directions on the main road?)
- Being located on streets with a speed limit of 45 miles per hour or lower
- Having great visibility (a minimum of 200 yards for both directions of traffic on the main road and not blocked by landscaping or other buildings)
- Featuring prominent signage
- Matching the wash format, pricing and services with the local area’s demographics.
In addition, Howard says that conveyor washes as well as other washes and detailing shops looking to offer a high-end experience should note the makeup of the buildings and businesses in the area. High-end shopping and business offices will obviously bode well for a carwash business.
“The better sites have a combination of high-end residential, high-end retail and high-end office,” explains Howard. “In our opinion, that’s the trifecta for a perfect site.”
Understanding the area’s characteristics is crucial when deciding which wash format to choose. You want to make sure that you have a business model-market match. According to Howard, higher income areas tend to frequent do-it-for-me businesses, while lower income areas prefer the do-it-yourself carwash formats with lower price points.
Therefore, full-serve and flex-serve carwashes should seek medium- to higher-income areas in order to maximize their profit potential and recurring business. Express exterior washes, note the experts, can thrive in a more diverse, wide range of income areas. For a traditional self-serve with an in-bay automatic, for example, a rural area with a smaller market population, median income population and lower traffic count can be successful as long as the business is isolated from express exterior competition.
“But, if you feel like the market has the potential to grow,” adds Howard, referring to the lattermost scenario, “then maybe pick a site where, in addition to your bays, you can add a conveyor at some point.”
The importance of visibility and accessibility
As with any business, especially retail, convenience is an important consideration for your customers. As a result, the experts we interviewed for this article both noted that access to your carwash and strong visibility to traffic are two of the leading factors to increasing your wash’s capture rate and its loyal base of customers.
According to Bob Fox, who is the CarWash College manager for SONNY’S The CarWash Factory, “If drivers can see your carwash as they are coming down the road, have enough time to safely get over and turn onto the property, it’s easy to navigate while visiting the wash and then easy to exit and get back on the road — that’s what makes for a successful carwash today. If customers can’t get onto and off of the property easily and safely, you’re fighting a losing battle.”
Fox also sees value in being near retail areas people frequent while out doing their weekly chores. Hopefully, in these situations, your carwash naturally gets incorporated into those routines. However, local traffic is preferred with a medium density of about 30,000 to 50,000 cars in the area to support the wash.
As noted by Fox, local traffic is deemed more valuable than being situated next to an interstate where people are commuting back and forth to work where the area’s residential and business surroundings are meek. “People tend to wash where they live,” he adds.
Howard concurs, adding that people will consider the amount of time they have to drive to a business before awarding their loyalty. “We have found that much farther than about a seven-minute drive — and definitely up to 10 minutes — is as far as someone will go to get a carwash,” he educates. “If a customer has to drive more than 10 minutes to get his or her car washed, it is considered an inconvenience, and they most likely won’t go.”
While competition must be considered during the site selection phase, carwashes in many areas of the country today should not be overly concerned about maintaining a viable customer base if a competing carwash is less than five miles away, as long as the traffic, population and demographics can support both businesses.
Customers need to take it easy
Once customers are able to see and access your wash, the next most important factor is navigating the wash easily and safely. Therefore, working with a qualified engineer and consultant, investors financing new construction must visualize and strategize the site’s traffic flow, turning radiuses, stacking areas and vacuum stations prior to deciding on a plot of land.
Generally, providing comfortable margins for these aforementioned areas and allowing for a 100-foot tunnel, about 0.8 to one acre of land is recommended for express exterior sites, while flex-serves will require a minimum of 1.2 acres, as examples.
“The biggest mistake I see new investors make — and even some very qualified consultants in this industry — is poor [on-site traffic] flow,” notes Howard. “You cannot overstate the importance of flow on your site.”
Improving flow on a carwash site, continues Howard, will require efficient site design when addressing such areas as: turning radiuses; entrance and exit (ingress and egress); flow of traffic and clear signage on the site; stacking areas and pay stations equivalent to meet demand in order to avoid bottlenecks; and ease of access and availability to vacuum stations with spacious parking spaces (where offered).
“Particularly of importance is the ease to enter the lot and not have tight turning radiuses. It’s quite common to see operations that don’t allow for sufficient turning radiuses,” says Howard. “I have seen some locations where customers literally have to perform three-point turns to get into and off the lot — it’s a real business killer. Even the smallest inconvenience will turn the customer away.”
New investors will also want to do their homework and due diligence when it comes to the area’s municipalities, zoning as well as permit requirements, minimum wage and other local factors that might affect your initial startup budget and ongoing costs to operating the business.
“Some municipalities will require a minimum amount of stacking room, for example, to fit on the lot before cars start spilling out onto the main road,” explains Fox.
Some areas even have restrictions on business signage, which is a deciding deterrent for Howard and Autobell Car Wash when considering areas in which to build a new carwash for the leading chain.
“Try to find the best local consultant you can, because that will be money well spent. That consultant will know exactly what the local rules are, the political landscape, who needs to be contacted, what paperwork needs to be filled out and help you tremendously during the initial site selection phase,” notes Howard.
Underestimating and ignoring the local carwash competition is a mistake too many new investors make. Competition can provide helpful benchmarks to establish for your wash. Look at the competition when deciding on such areas of the business as:
- Hours of operation.
As noted in our publication’s biweekly Carwash eNews, due to demand and increasing interest in professional carwashing, some established carwashes are actually welcoming new competition in the area and could possibly share a few trade secrets for your budding business. Establishing relationships with them and other small business owners in the area is a smart way to ensure your new carwash’s short- and long-term success.
And, when deciding on the specific site for your new carwash, experts say it’s best not to settle for a second-best location. “You pay for the right location only once, but you pay for the wrong location every day,” concludes Fox.