Acceptable ROI

[Earl Weiss]

I have asked this before and was hoping for more replies.

If you ad something new to the SS what would an acceptable ROI be?

In this instance it is the in bay hand held blowers.

Would you hope it be 1,2,3,4, years or less?

For purposes of this we will not consider factors like , maintenance, operational cost or perhaps benefit of someone choosing you versus the competition because you have this.

 

[MEP001]

That's a tough one, for example if you add a tri-color foam wax, you not only sell more time when they use the option but they'll spend more rinsing it off. Going by time sold on that function alone doesn't give you direct revenue increase. Obviously hand-held dryers can be tracked directly.

Also there's a wide range in the cost of added functions. A single color foam wax can be added cheap, so the ROI would be really fast. Six bays of dryers would be what, $12,000-$15,000 installed? I would be really surprised at a 5-year ROI from that.

 

[Earl Weiss]

As I did with credit cards and bill accepters I did not do all the bays at once. Performance dictated my actions. Since the Dryers with booms and install were about $3000 I did the 2 busiest bays which were also super bays. Since they started service around November 1, I think the really cold months although they might be busier saw perhaps a smaller percentage use because people just don't want to stand in the cold and mess with these. Now it's warming up and although business tends to slow down i think the percentage uses is picking up.

With Bonus time factors etc. I can figure 50 cents a minute / $30 per hour average. As of May 1, about 35 hours each. We will see how it goes thru the summer.

 

[PaulLovesJamie]

I just purchased 5 diskin air shammee dryers at the show in vegas, total cost including self-install (equipment, apparatus to mount booms, electrician, motor starter enclosure, wiring, etc) should be under $8000. My market is good for drying - I sell a lot of towels and a lot of SFR. I'm anticipating a 12-18 month payback, two years tops. I think I would have still bought it if I figured a 3 year payback, but it would have fallen lower on the priority list, possibly low enough to not get done.

All the operators I spoke with at the show who have blowers said they were surprised how profitable they were. I think it'll cannibalize some from the SFR, but I think they will see enough use in my market to produce a good payback.

 

[pgrzes]

I have blowers at my 3 busiest bays at one location, they always were my busiest bays, but are even now more busy. I just purchased 4 for another location I just rehabbed and will install once I get all the ancillary parts for the install together. Once situated I will add to the remaining bays at my first wash. One thing I would say is that the blowers are great, maintenance is not bad and they get tons of use. If you want to maximize them, be sure to have count up timers with credit cards! We continually see people spend tons of time trying to blow every water droplet off their vehicles, if count down once timer beeps they hurry up and leave with wet cars. Just my observation!

 

[mac]

We have installed the Diskin units in several locations. They have all pretty much paid for themselves in a year. If you do, ask them for the 230 volt motors as they produce more air.

 

[Greg Pack]

be sure to have count up timers with credit cards! We continually see people spend tons of time trying to blow every water droplet off their vehicles, if count down once timer beeps they hurry up and leave with wet cars. Just my observation!

I love the count up timers showing price and not time. I continue to be surprised at the amount of money people will knowingly spend cleaning their car. I had a guy call me a couple of weeks ago because his bank called him. He racked up 67.00 cleaning a Tahoe he just purchased. He wanted to make sure I got my money.

But back to Earl's question, at very least a 5 year payback, but greater than three year is preferred.

 

[OurTown]

If you do, ask them for the 230 volt motors as they produce more air.

Just so everyone knows Mac might be talking about the three phase Super Air Shammee II and not the three vac motor model that can be had in single phase 220v.

https://www.kleen-ritecorp.com/p-56459-super-air-shammee-ii-ss2-in-bay-wall-mount.aspx

We are installing one right now.

 

[soonermajic]

I just purchased 5 diskin air shammee dryers at the show in vegas, total cost including self-install (equipment, apparatus to mount booms, electrician, motor starter enclosure, wiring, etc) should be under $8000. My market is good for drying - I sell a lot of towels and a lot of SFR. I'm anticipating a 12-18 month payback, two years tops. I think I would have still bought it if I figured a 3 year payback, but it would have fallen lower on the priority list, possibly low enough to not get done.

All the operators I spoke with at the show who have blowers said they were surprised how profitable they were. I think it'll cannibalize some from the SFR, but I think they will see enough use in my market to produce a good payback.

I'm trying to figure out how you got 5 Air Shammees, & installed, for $8000....?

 

[PaulLovesJamie]

total cost including self-install

I stand a bit corrected, thanks. A few clarifications:
self-install
show special pricing
I may be underestimating the cost of motor starters
I'm having an electrician in to do some other work, I'll run everything for the blowers and have the electrician do the final hook up to keep me legal and safe. And keep the cost down.
Aaand, my wife reminds me that I didnt count shipping cost.
OK, maybe more than a bit corrected, bump that up to 9k?

 

[robert roman]

I have asked this before and was hoping for more replies.

If you ad something new to the SS what would an acceptable ROI be?

In this instance it is the in bay hand held blowers.

Would you hope it be 1,2,3,4, years or less?

For purposes of this we will not consider factors like , maintenance, operational cost or perhaps benefit of someone choosing you versus the competition because you have this.

ROI and payback are not the same.

Payback period (years) is investment / annual cash flow from investment

ROI is gain from investment – cost of investment / cost of investment

Cash flow not payback is useful for determining true investment value of something.

For example, not all things at carwash wear out at same rate.

 

[Earl Weiss]

Cash flow not payback is useful for determining true investment value of something.

For example, not all things at carwash wear out at same rate.

At the end of the day the result is the same. (Whether it was a worth while expenditure.) The factor for wear on wearable parts is typically nominal for car wash equipment as compared to total cost where the "Bones" last indefinitely. For purposes of this question this factor was eliminated as was COGS like utility cost, or in other cases supplies such as solutions.

 

[robert roman]

“….Whether it was a worth while expenditure….”

How to answer this question depends on a person’s explicit goal and objective.

So, it may not be the same result at the end of the day.

For example, it is possible to have a machine with a short life span generate higher returns than a machine with a longer life span.

 

[Earl Weiss]

“….Whether it was a worth while expenditure….”

How to answer this question depends on a person’s explicit goal and objective.

So, it may not be the same result at the end of the day.

For example, it is possible to have a machine with a short life span generate higher returns than a machine with a longer life span.

Uh, no: 1. The stated goal is "Worthwhile expenditure"
2. The initial post addressed and discarded factors such as maintenance so "Life Span" is irrelevant.

Thanks to all who responded with X% or Y years.

 

[bighead]

Robert you are truly trolling right now.

Something with an ROI of 50% has a 2 year payback.

Something with an ROI of 20% has a 5 year payback.

In Earl's question the lifespan of the equipment is not relevant. What a car wash owner wants in regards to a return on his money is.

Earl: I said on facebook 2 years is typically what I look for in payback. But if its something I'm going to do anyway (like install CC readers to boost revenue, I'll do it right away.)

Also, don't forget sometimes the best way to tweak the return is to focus on the "investment" side of the equation (ie: buy a used vending machine for $300 off craigslist by watching for one for months, buying some pumps used off of Ebay for cheap and building your own tri foam stand, etc.)