Consider yourself wise.
According to the International Carwash Association (ICA), you’ve just joined an estimated $24-billion-a-year industry that’s grown by more than two percent over the last five years despite a struggling economy. And according to our research, that growth rate is expected to continue its rise over the next five years due to the return of disposable income.
So now that you’ve joined an industry so ripe with potential for success, you may be wondering how to keep the momentum going and ensure your new carwash still holds all that excitement and potential in five years.
The goals and objectives for your first five years can really be boiled down to three areas of focus.
Learn all you can about your industry. Research the ins-and-outs of carwashing. Steve Gaudreau, president of Brink Results LLC considers not acquiring enough carwash knowledge to be successful one of the most common mistakes new owners make.
“Everyone underestimates what it takes to be successful in the carwash business,” Gaudreau asserts, adding that owners must ask themselves, “How they are going to obtain the knowledge they don’t have to be successful in this new business.”
- Visit trade shows where you can see modern equipment in action, talk to manufacturers and network with other industry professionals who can give you advice on what works best.
- Get involved in the industry by joining associations like the ICA or local agencies. Even joining online forums will offer a chance for you to ask questions and network with experienced owners.
- Research best practices for technical skills, equipment, marketing, hiring, etc. in the field, all of which can be found in the pages of PC&D or on our website.
- Keep evaluating your own business within the industry. Perform frequent SWOT analyses (noting the strengths, weaknesses, opportunities and threats to your company) as your business grows and changes.
Create a strong staff. “Not hiring the right people, training or managing properly is one of the most common pitfalls,” asserts Gaudreau.
- Avoid hiring quickly. Instead, set up an interview, actually call references and allow time to weed out those with only a passing interest in your company.
- Try hiring by recommendations from existing employees. Hard workers know other hard workers and a can recommend them.
- Be sure to create a new employee manual, which includes your standpoint on all company procedures — interacting with customers, safety precautions, uniform requirements, end-of-day procedures, etc. Don’t just train new employees with this, but also reemphasize the procedures to existing employees periodically. Be sure to tweak this manual continually. Ask top-performing employees about changes they recommend or things they would like to have known when training.
- Treat your employees well and help them grow. Let employees know when they are doing things well, and offer constructive criticism when they’re not. Delegate more work to top performers, and promote and reward whenever possible.
- Gaudreau says new owners should also keep in mind that, “after the second year, the volume and required staffing levels will start to be understood and more manageable.”
Build a loyal following. Make sure your customers feel appreciated so they keep coming back.
- In order to build your customer base, you need to find the right marketing strategy for your company. Some areas will respond better to print ads, while others prefer email promotions. It may take some time to find the “sweet spot,” but when you do, make sure you utilize it, sending promotions for holidays and company anniversaries, etc. Gaudreau lists not advertising enough as one of the most common mistakes made by new wash owners.
- Increase your number of happy customers by encouraging them to recommend others to your establishment or leave online reviews. Our recent survey of manufacturers found they consider customer reviews and word-of-mouth marketing to be more than four times as effective as any other means.
- Reward frequent customers with discounts and perks like reduced wait times or special VIP areas.
Avoiding big mistakes
There are a number of potential pitfalls for new carwash owners, many of which have been covered already. Perhaps the three most common mistakes made by new carwash owners are:
- Not focusing your efforts on this venture. Don’t split your time between your new company and another job or leave someone else in charge. You must stay in control during the early years for it to succeed.
- Setting your expectations too high. Gaudreau says, “Be prepared to lose money the first year. So, have a financial reserve — 100,000 for a tunnel is ideal.” He adds that most washes break even in their second year, meaning it’s not until the third year that successful carwashes begin to see a profit. Make sure you’re prepared for this financially and emotionally.
- Expanding too fast. It’s important to make sure the business is really ready and the market will accommodate an expansion. Again, do your research and consider your profits. Gaudreau reports that after third-year growth, most washes see a small growth under five percent per year. Keep this in mind.
But don’t let the difficulties dishearten you. Remember the return on investment in the growing carwash industry, according to marketing expert Brandon Gaille, is quite large, with two-bay self-serves averaging annual revenue of $41,000 and in-bay automatics and tunnels averaging $139,000 and $686,250, respectfully.
So the potential to make money off your investment is great. Stay focused and dedicated to your own success in the first five years, and soon you’ll be the industry veteran giving advice to new owners sitting where you are now.
Amanda Hosey is assistant editor of our sister publication, Cleanfax. She can be reached at [email protected]