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Q&A: Can a Car Wash Be a Profitable Extra Service?

Paul Partyka |

Have you ever thought about expanding your business, perhaps venturing into something that’s similar to coin laundries? The car wash/coin laundry combo has been popular with a host of operators.We’ve put together some introductory questions about the car wash industry and asked Steve Robinson, rollover product manager, and Kevin Fairfield, self-serve product manager, of Mark VII Equipment in Arvada, Colo., to share their views.Q: What challenges are car wash operators facing?A: The No. 1 concern for car wash operators at the moment is the price of gasoline. Historically, each time there has been a significant rise in the price of gas, the short-term reaction of consumers has been to drive less, and when they drive less, they wash their cars less frequently. However, history also teaches us that once gas prices stabilize at the new, higher level, consumers come to accept that as a fact of life and resume their old driving and washing habits.The focus on “green” is leading a growing number of municipalities to outlaw home washing, and we can expect that trend to continue. Modern equipment is also efficient in its use of electricity and the chemicals required during the wash process.Q: What demographics are advantageous for a car wash business?A: Car wash demographics include the entire spectrum of income, gender, vehicle type, etc. The trend for many years has been toward professional car washing and away from home car washing.Q: If a coin laundry owner wanted to offer car washing, what would you suggest?A: First, do your homework. Take advantage of the wealth of information that’s available on the Web to learn what it takes to operate a successful car wash. Second, and equally important, interview local distributors of car wash equipment you’re considering, ask a lot of questions, and talk to their customers to find out if they’re happy. There’s a lot of good car wash equipment available, but your local distributor will make or break your business depending on how knowledgeable he is about the equipment he sells and how responsive he is to the needs of his customers.Q: What about offering self-serve bays?A: Self-serve bays are a logical fit for a coin laundry, as its customers are used to the coin-op process and they have time available to hand-wash their cars while waiting for their laundry to get done.Q: What about offering an automatic wash?A: Automatics have the advantage of offering consumers multiple wash packages at different prices without requiring the consumer to get out of the vehicle, plus they can easily wash 12 to 15 cars an hour in a limited amount of space.Q: Should you combine these types of equipment?A: If there’s enough room for three or more bays on the site, an automatic rollover would be a good option for one of the bays, as many people prefer to not have to get out of the car and wash it themselves.Q: Would one self-serve bay justify the expense?A: The business plan has to be formulated for each individual opportunity, because many variables exist when starting a self-serve wash. The decision has to be based on demand from the local market or, in basic terms, the expected wash volumes. These volumes are utilized to determine if a self-serve site makes sense, or if the volumes would demand a rollover or tunnel system.With self-serves only, the key is to focus on not only the weekly volumes, but also the busy times of the week. The operator must be conscious of the customer who will drive past and see a long line. Having enough bays to handle the volume is critical. The cost for property development, equipment and many other factors has to be considered. As the operator adds bays, economies of scale are realized with construction, utility installation costs and equipment. For instance, the operator will have to build a room to house the back-room equipment, such as pumping plants and boilers. Many of these systems can support multiple bays with small incremental costs.Q: How much space does a self-serve require?A: A two-bay building with back room is approximately 45 feet by 25 feet; a four-bay building with back room is approximately 75 feet by 25 feet; a six-bay building with back room is approximately 105 feet by 25 feet; and an eight-bay building with back room is approximately 135 feet by 25 feet. Although this is just the size of the building for the wash equipment, it serves as a good basis for determining the minimum space required to fit the desired number of self-serve bays. You must add to that the space required to enter and exit the bays, room to wait in line, room for vacuums, local setback requirements, desired landscaping, etc.Q: Generally speaking, what would the cost per bay be? What about an automatic wash?A: Self-serve equipment costs could range from $10-11K per bay for the basic wash equipment. Adding revenue-enhancing options like triple-foam conditioner will increase the price tag, plus you have to factor in the cost of installation by your local distributor. The site will also need a compressor and a boiler, and might also need in-floor heating to minimize icing in the bays and other components to support the wash process. An automatic rollover will cost anywhere from $80-150K, depending on the equipment and options selected, plus another $60-80K for construction.Q: What does the average customer spend at a self-serve bay? What about at an automatic?A: There are typically multiple places on a site where the customer can spend money (wash bays, vacuums and vending machines), so it’s difficult to determine an average per customer. One recent survey, however, determined that the average gross income per bay was close to $1,300 per month. The average revenue per wash for an automatic rollover is currently about $7.Q: Are most washes still taking coins/cash?A: Cash acceptance is universal, with a growing number of operators adding bill acceptors in the bay to avoid the customer having to go to a centrally located change machine. Credit card and prepaid wash card acceptance represents a huge opportunity to increase convenience for the customer, and smart operators are investing in the technology required to offer those forms of payment. Studies show that accepting payment via credit card will increase the average transaction by 25% in almost any retail business.Q: What are the busiest days for car washes?A: Car washes are typically busiest from Friday through Monday, with Tuesday through Thursday being the slow days. For this reason, savvy operators run promotions to bring more customers on-site during the slow days. Car wash volume also varies depending on the season and the specifics of the local geography. People tend to wash their cars after storms, so the frequency of storms will increase volume. Seasonal conditions such as bugs in the summer and chemicals used to melt ice on roads will also drive more wash activity.Q: What type of crossover business could you generate at a coin laundry/car wash business?A: The key is to create initial trial to capture new car wash customers, then deliver quality results to keep them coming back. Consider giving away free washes for a limited time period during the grand opening, so customers can see what a great job your equipment does. Loyalty programs are also a great tool, where you offer a free wash for every X number of washes purchased. Marketing programs such as these can be easily automated through the latest car wash entry system technology, which also allows you to capture customer data to support future marketing efforts.Q: What are some of the basic management tasks?A: Check the operation of your equipment at least once a day and immediately address anything that needs attention. Clean your wash bays daily, make sure you have plenty of good signage to instruct customers how to use your wash and develop a good working relationship with your service provider, which is essential to keeping your car wash equipment up and running and generating profits for you.If you have any questions, contact Steve Robinson or Kevin Fairfield at 800-525-8248 or visit www.markvii.net. 

About the author

Paul Partyka

American Coin-Op

Paul Partyka was editor of American Coin-Op from 1997 through May 2011.

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