Repair costs?

[Carwash Chris]

A 3 year old 100' tunnel with wraps, side brushes wheel blasters etc. What can you expect to spend for repairs and maintenance (parts and labor) as a percentage of gross sales. I would appriciate any input, thanks.

 

[Earl Weiss]

A 3 year old 100' tunnel with wraps, side brushes wheel blasters etc. What can you expect to spend for repairs and maintenance (parts and labor) as a percentage of gross sales. I would appriciate any input, thanks.

As Bill C is fond of noting, % of gross sales is not realistic factor. Why? Wash 100,000 cars at $3.00 or $10.00 a car and repair costs should be the same. I work on a 25 cents a car factor.

 

[nascarwash]

As Bill C is fond of noting, % of gross sales is not realistic factor. Why? Wash 100,000 cars at $3.00 or $10.00 a car and repair costs should be the same. I work on a 25 cents a car factor.

can you elaborate on this 25 centsa car factor please

 

[Earl Weiss]

can you elaborate on this 25 centsa car factor please

Example. (Note: Round numbers used for ease of calculation)

If I wash 100,000 cars in a year I expect to spend $25,000.00 in maintenance costs. This includes replacing anything from cloth, to electric and Hydraulic motors, conveyor chain and rollers, shafts, bearings, hydrominders, flojets, etc. Pit cleanung. Everything that varies with use. One article included the building roof with per car costs. I don't think that should be included for these purposes.

Now, in some years their may be a bigger expense. A chain and Rollers maybe $15,000. This needs to be averaged over the life of the item (Say 300,00 cars.) If a conveyor outlives it's useful life, the $25,000.00 replacement (net of chain and rollers) is also factored over say 1,000,000 cars.

In a brand new wash the percent should be lower the first couple of years. However, it is almost like you pre paid the maintenace expense for the initial period.

Taking over a badly neglected wash will likely incur higher initial per car maintenace costs.

 

[robert roman]

Titrate chemical, inspect moving parts and fluids, drain water from air compressor and air dryers, clean trough, lift service, inspect and replace worn conveyor parts, overhaul pumps and so forth should be done on a consistent basis; daily, weekly, monthly and annually.

The more you have others do these things for you, the greater the expense in parts and labor. If you skimp and break down, you would also have to add the opportunity cost of lost business to the equation and the true cost of maintenance and repairs (per car or % of sales) will rise dramatically.

What to expect in terms of cost (per car or percentage of sales) will depend on how well you manage repairs and maintenance.

So, your actual expense could be far greater than Earl's working factor.

 

[Earl Weiss]

Titrate chemical, inspect moving parts and fluids, drain water from air compressor and air dryers, clean trough, lift service, inspect and replace worn conveyor parts, overhaul pumps and so forth should be done on a consistent basis; daily, weekly, monthly and annually.

The more you have others do these things for you, the greater the expense in parts and labor. If you skimp and break down, you would also have to add the opportunity cost of lost business to the equation and the true cost of maintenance and repairs (per car or % of sales) will rise dramatically.

What to expect in terms of cost (per car or percentage of sales) will depend on how well you manage repairs and maintenance.

So, your actual expense could be far greater than Earl's working factor.

An important point not to be overlooked. We do most routine stuff ourselves. Most anything that can be done with basic hand tools and simple power tools. For stuff that needs welding, torch cutting, forklift lifting, Pit Sucking, we bring in outside services. So, yes, the more outside help you need, the more it will cost you.

Example: When I took over an 8 Bay SS, all the poly tubing needed replacing because it was exposed to the sun. Got a quote of $1500.00 per pay. Had my guys do it and I think total parts cost was less than $1500.00 for tubing and fittings. Since I used people on my payroll already during rainy days a couple of bays at a time, I did not keep track of the man hours.

 

[buda]

Consider an average of 3% to 5% of gross sales over a 5 year period.

Think you will find that this formula comes out about right.

Regards
Bud Abraham

 

[Earl Weiss]

Consider an average of 3% to 5% of gross sales over a 5 year period.

Think you will find that this formula comes out about right.

Regards
Bud Abraham

I need an explanation on how this works.

For simplicity sake, compare 2 EE locations. Identical physical plant and staff.

Each washes 100,000 cars a year.

#1 Averages $6.00 per wash or $600,000.00 .

#2 Averages $4.00 per wash or $400,000.00.

Using the 3-5% of gross sales:
#1 Would have expenses of $18-$30,000.00 per year .
#2 Would have expenses of $12 -$20,000 per year.

Why would the same physical plant and same volume have maintenance costs vary so widely based on revenue?

 

[buda]

Great question. It probably would not.

You asked for a "guideline." We have always used the 3% to 5% of gross revenues as a "guideline."

The first year you probably will not have as many maintenance costs as you will have in the 5th year, for example.

In your case with the same two systems washing the same number of cars in the same climatic conditions you probably will have the same maintenance costs.

You will have to decide what percentage of revenues would be most applicable or a number that you think is reasonable.

That is about all I can tell you

Bud Abraham