Here's my reading on the P&L. The owners are insisting that the car wash business as a whole is dropping off. However, with the 3 year gross at 27k, 24k, 27k, the gross revenue is relatively constant. Utility costs and taxes have greatly increased with the owners failing to pass on to customers these increased costs. Basically, instead of functioning as a business, they're functioning as a pass through collection point for government and utilities.
The wash was constructed in 1990. The floor heat and water heater is natural gas with a electric wall heater to heat the equipment room. Unlike you guys out west with cheap electric from hydropower, our grid here is fossil and nuclear so gas is cheaper than electric. It's also listed as 200 amp single phase service instead of the 3 phase I was expecting.
So, we've established at the beginning that pricing is an issue. Assuming all else remains the same, taking the bays to 1.75 and the vacuums to 1, that's a roughly 40% increase which would give projected total gross at 35k with the only change being increasing pricing to current norms.
The other issue is taxes. Pennsylvania has a concept of Keystone Opportunity Zones which encourage communities to attract businesses by giving exemptions on a number of taxes and fees. We have a new mayor and city council and with my work schedule recently changing to give me a Tuesday\Wednesday weekend, I'm able to make the council meetings and get involved. Our neighboring town has a designated KOZ that stops a few blocks from the border. If I get the town I'm in to get that extended through the main strip and a block in either direction to cover the property, it would be the best opportunity to keep revenue for the business instead of the government sucking it faster than a vacuum takes the change.
Then we come to dealing with utilities. I know there's a pretreatment permit on file which I imagine might just be for a oil/ water separator. I could try getting a sewer meter so I'm not paying for water not going to the sewer to begin with. The electric company does offer a rebate program to modernize commercial lighting, and I think replacing the equipment room heating to gas would drop costs as well. I also think that the weeping system could be improved to reduce wasting water, which depending on it's current setup could actual be running up every bill without taking anything in.
Seeing the actual numbers and listening to the advice from you guys definitely gives me pause. I'm still questioning whether it's a dead wash vs underperforming and mismanaged. I definitely see a convenience factor to a count up Cryptopay system letting customers actually focus on getting a quality wash instead of rushing to beat the timer. As stated, I don't see a rush of buyers for this property. One of the big dollar stores backed out because the neighbor wouldn't sell them a piece to meet their land specs. I may not be opposed to working with the owner on learning the business if he'd be receptive to trying to get improvement instead of running stagnant.
