Hello All!
I'm not entirely sure where to start here so I may ramble a bit. I wanted to get a brief summary out of where I am in the process and make sure I'm on the right path through this process.
Many months ago, I reached out to a current owner via friend who owns the only local SS and touchless IBA for several miles. Our town is around 36,000 folks with quite a few visitors due to local sporting events, the local YMCA, bowling alley, restaurants, and league volley ball (all within 0.5 miles of the wash). We are in SE MI and near a medium sized city with ~250,000 folks not including the suburbs (obviously there are much closer choices than mine). The only other SS's are 4-6 miles away or more. The same owner has one touchless IBA at a gas station 3 miles away through a lease. Part of this purchase would include first right of refuse to take over that property in 3-5 years. There are numerous tunnel washes in the area, including an older one in town, a new Tommys (4-5 miles away), and several long standing local tunnel operators 3-6 miles away.
The wash has two original (2004) Mark VII (I believe) touchless units and 4 SS bays. There are a few vacuum islands, a broken detail vending machine, and two bill exchangers. The wash has appeared to be in somewhat of a decline for a few years now and has a poor reputation (at best) due to broken touchless equipment/poor washes. It has taken a beating on social media. The quarterly water usage also substantiates this decline. It sits on a smaller 0.75 acre property. The building appears to be in pretty good shape (block construction with split face) but it could use a little paint. There's some parking lot light replacement, seal coating, and minor landscaping that needs to be completed as well - which is being budgeted into the financing.
Based on conversations with the current owner, even currently revenue is doing ok and there is a lot of use. Now prices for the SS are on the higher end for start up/continuation but they have CC readers (not sure on the type) and he is claiming $6+ average bay with revenue above $1600/month per bay. The touchless IBA prices are very low - highest wash is $10. We will be raising prices but offering a superior product when things are completed. I believe this owner charges $12 or $14 at his Laserwash 360 location. Part of this process is obtaining all available financial records to review with my investing partner and lender, as well as the most recent bank appraisal. I am also having two vendors visit the site to do a walk down and provide costs for repairs/updates on equipment. We plan to use these items as leverage because more or less nothing has been done to the site in 17 years besides the bare minimum to keep it open.
Operations wise, we do plan on having at least part time daily help for cleaning and maintenance. I would be the primary "manager on duty" followed by my investing partner who lives 20 minutes away. I (and my father who is nearing retirement) are both very mechanically inclined and can handle most maintenance. We do want to select a vendor with superior support to minimize downtime.
Goal wise, we obviously want to pay the bills but do not plan on getting rich. I live in a smaller community that is close knit and big on local business support. I want to keep the business involved in the community by doing creative things such as fundraisers. We are very "forward" thinking investors and want to ensure the business has sufficient cash available, therefore part of our monthly expenses include setting aside future replacement funds (I think this is where a lot of people get into trouble). Is there a rule of thumb for future updates/equipment on how much down payment vs. financing? As of now, we plan on saving to have 100% cash available in ~10 years to upgrade later.
If anyone has the time or wants to, I can send them by assumptions and calculations for variable costs, fixed costs, and revenue. We will be sitting down with the lender to verify all of these items as well to ensure this transaction makes sense.
In terms of once the transaction is completed, there are planning to do several things:
1. Rebranding/naming - This is tough because the current name ties to the community and we do not want to loose that. I'm on the fence with advertising new ownership and equipment to keep the name or a very similar variation. The building colors coordinate with the school and mascot as well.
2. Basic outside updates (cleaning, touchup paint, painting the bays, lighting, landscaping, etc.). There may be a few other things such as one of the bay heaters that require repair or minor equipment repairs.
3. New LED sign for advertising (replaced old manual sign board).
4. Replace both IBA with new touchless equipment. This will most likely Washworld RZR with LED lighting and ability to do hot lava wax, Rain-X, etc. We are on the fence of if we can upsell ceramic coating to make it worth our while. Our goal price is $12 but we may try for $14 on the top wash. Local tunnels charge $18 for the top and $6 for the basic but offer those silly 2.5x prices for monthly passes. We do not plan to offer passes and would rather engage the community to drive business and support, such as a fundraiser with the local high school sports team. I'm very afraid of pricing myself out of business.
5. New roll up doors (old acrylic ones are falling apart).
6. Update pay station (Gold Line) to accept touch pay and loyalty app (We have not decided on a vendor yet). This would include new face plates to update them. They do currently have DAN.
7. Eventually consider further updates to the SS (touchless pay), repair/replacement of the onsite detail vending machine, and potentially adding credit cards to the vacuums/additional offerings at the islands. I would consider putting paneling into the SS bays and IBA as well in 5-7 years to update the look.
Overall, are we over looking anything? Any insight or tips on this? I know this was a lot but I wanted to get my ideas out to everyone to take a look and see...
I'm not entirely sure where to start here so I may ramble a bit. I wanted to get a brief summary out of where I am in the process and make sure I'm on the right path through this process.
Many months ago, I reached out to a current owner via friend who owns the only local SS and touchless IBA for several miles. Our town is around 36,000 folks with quite a few visitors due to local sporting events, the local YMCA, bowling alley, restaurants, and league volley ball (all within 0.5 miles of the wash). We are in SE MI and near a medium sized city with ~250,000 folks not including the suburbs (obviously there are much closer choices than mine). The only other SS's are 4-6 miles away or more. The same owner has one touchless IBA at a gas station 3 miles away through a lease. Part of this purchase would include first right of refuse to take over that property in 3-5 years. There are numerous tunnel washes in the area, including an older one in town, a new Tommys (4-5 miles away), and several long standing local tunnel operators 3-6 miles away.
The wash has two original (2004) Mark VII (I believe) touchless units and 4 SS bays. There are a few vacuum islands, a broken detail vending machine, and two bill exchangers. The wash has appeared to be in somewhat of a decline for a few years now and has a poor reputation (at best) due to broken touchless equipment/poor washes. It has taken a beating on social media. The quarterly water usage also substantiates this decline. It sits on a smaller 0.75 acre property. The building appears to be in pretty good shape (block construction with split face) but it could use a little paint. There's some parking lot light replacement, seal coating, and minor landscaping that needs to be completed as well - which is being budgeted into the financing.
Based on conversations with the current owner, even currently revenue is doing ok and there is a lot of use. Now prices for the SS are on the higher end for start up/continuation but they have CC readers (not sure on the type) and he is claiming $6+ average bay with revenue above $1600/month per bay. The touchless IBA prices are very low - highest wash is $10. We will be raising prices but offering a superior product when things are completed. I believe this owner charges $12 or $14 at his Laserwash 360 location. Part of this process is obtaining all available financial records to review with my investing partner and lender, as well as the most recent bank appraisal. I am also having two vendors visit the site to do a walk down and provide costs for repairs/updates on equipment. We plan to use these items as leverage because more or less nothing has been done to the site in 17 years besides the bare minimum to keep it open.
Operations wise, we do plan on having at least part time daily help for cleaning and maintenance. I would be the primary "manager on duty" followed by my investing partner who lives 20 minutes away. I (and my father who is nearing retirement) are both very mechanically inclined and can handle most maintenance. We do want to select a vendor with superior support to minimize downtime.
Goal wise, we obviously want to pay the bills but do not plan on getting rich. I live in a smaller community that is close knit and big on local business support. I want to keep the business involved in the community by doing creative things such as fundraisers. We are very "forward" thinking investors and want to ensure the business has sufficient cash available, therefore part of our monthly expenses include setting aside future replacement funds (I think this is where a lot of people get into trouble). Is there a rule of thumb for future updates/equipment on how much down payment vs. financing? As of now, we plan on saving to have 100% cash available in ~10 years to upgrade later.
If anyone has the time or wants to, I can send them by assumptions and calculations for variable costs, fixed costs, and revenue. We will be sitting down with the lender to verify all of these items as well to ensure this transaction makes sense.
In terms of once the transaction is completed, there are planning to do several things:
1. Rebranding/naming - This is tough because the current name ties to the community and we do not want to loose that. I'm on the fence with advertising new ownership and equipment to keep the name or a very similar variation. The building colors coordinate with the school and mascot as well.
2. Basic outside updates (cleaning, touchup paint, painting the bays, lighting, landscaping, etc.). There may be a few other things such as one of the bay heaters that require repair or minor equipment repairs.
3. New LED sign for advertising (replaced old manual sign board).
4. Replace both IBA with new touchless equipment. This will most likely Washworld RZR with LED lighting and ability to do hot lava wax, Rain-X, etc. We are on the fence of if we can upsell ceramic coating to make it worth our while. Our goal price is $12 but we may try for $14 on the top wash. Local tunnels charge $18 for the top and $6 for the basic but offer those silly 2.5x prices for monthly passes. We do not plan to offer passes and would rather engage the community to drive business and support, such as a fundraiser with the local high school sports team. I'm very afraid of pricing myself out of business.
5. New roll up doors (old acrylic ones are falling apart).
6. Update pay station (Gold Line) to accept touch pay and loyalty app (We have not decided on a vendor yet). This would include new face plates to update them. They do currently have DAN.
7. Eventually consider further updates to the SS (touchless pay), repair/replacement of the onsite detail vending machine, and potentially adding credit cards to the vacuums/additional offerings at the islands. I would consider putting paneling into the SS bays and IBA as well in 5-7 years to update the look.
Overall, are we over looking anything? Any insight or tips on this? I know this was a lot but I wanted to get my ideas out to everyone to take a look and see...
