Thinking of selling your carwash? Gather this information first

Information checklist a carwash owner should gather before selling your business

Before you or your advisor contacts any buyers, it is highly recommended to compile in advance the key information that all buyers require.

Sponsored by Car Wash Advisory

Given the tremendous growth in the carwash industry in the last three to five years, as well as the flurry of acquisitions happening, most carwash owners have likely asked themselves the question, “Should I sell?” You’ve most likely heard of or personally know a fellow operator or competitor who has sold their businesses to one of the many carwash buyers.

Before you or your advisor contacts any buyers, it is highly recommended to compile in advance the key information that all buyers require. Organized, clean information will help the process run more smoothly and give buyers more confidence in your operations.

Below are some of the key information items that a seller should gather before “hitting the market”:

• Profit & Loss Statements: P&Ls for the prior three years are the most important information for a buyer, as EBITDA (earnings before interest, taxes, depreciation and amortization) multiples are the key valuation metric for carwashes. Historical P&Ls allow a buyer to understand your sales volume, profitability margins and growth over time, all of which tell the “story” of your wash, which determines value.

• Projections: If your wash has expected growth going forward, you should consider preparing a projection for the next one to two years to show the “upside” for the buyer. An experienced advisor can help you do this.

• Point-of-Sale Reports: These reports allow buyers to confirm car counts, sales and understand the breakdown by your various wash packages. All POS systems will have a sales report you can easily run, including DRB (General Sales Report), ICS (Shift Detail Report) and Sonny’s (Sales Overview Report). Most buyers will want these reports for the same periods as the P&Ls, typically for the last three years.

• Club Memberships: Also offered in most POS systems are reports that provide current club member count and the breakdown by wash package.

• Greenfield Developments: If you are growing and have any greenfield locations under development, most buyers will want to review your current site plans, surveys and civil drawings and designs.

• Other Information: Traffic count (average annual daily traffic), tunnel length, equipment and chemical suppliers, number of vacuums and paystations are all key metrics and information that buyers consider in the valuations and decision-making process.

At Car Wash Advisory, our standard process is help a seller compile all of this raw, detailed information, organize it and create a buyer-friendly marketing package. This includes an “information memorandum” that is easy to review, understand and digest, which highlights the key selling features of a client’s carwash, as well as a “data room,” which is a folder that contains the more detailed and “granular” reports, financials and information that a buyer will want to dig into.

Colin May is a managing director at Car Wash Advisory, a national investment banking firm and brokerage that focuses exclusively on the carwash industry. For any assistance, advice or a free valuation of your washes, interested parties can reach out to him for an introductory conversation at [email protected].

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