Where to start???

[ViperSBT]

I just recently found this forum and am hoping to find some guidance/mentors to help me on the road to becoming a Car Wash Operator. I say car, but my real focus is on Dual Rear Wheel trucks and possibly up to the size of school buses.

The county that I live in, and hope to open my business in, has a population of just more than 26,000 and is broken down 31% Urban and 69% Rural. As such there are lots of big pickup trucks (of which I own one). And yet there is no convenient/affordable place to get them washed automatically.

My goal is to open a automated wash facility that could handle these trucks and other large vehicles. There are several organizations that I would like to target to contract cleaning of buses and other large vehicles.

I've got so many questions running through my head and not sure where to start. My goal is to use 2013 to plan and get everything together to be able to launch my business in 2014. I'm not getting in this as a get rich quick scheme, it is really about supplementing my current income in the hopes of my wife being able to quit her job and stay at home with our kids.

I am really hoping for some insight and guidance from those of you that have "been there and done that".

 

[Waxman]

How do they wash the buses now?

If you are developing a plan for a new carwash, it's not hard to build a bay that would fit a school bus. Do it with a self-service bay and it will be a 'truck bay'. You can expect this bay to be your messiest bay consistently, with grease etc. making regular cleanup necessary.

Many in-bay automatic carwashes can accomdate dually pickups.

I'm in a rural area too. I opted NOT to get the dually kit for my in bay automatic and have had very few complaints. The duallys just wash in the self serve bays.

Look at your competition. If someone is already there and in business as an existing carwash, you're not going to hit a home run just by cleaning duallys and buses. Not enough of them to make a difference.

 

[ViperSBT]

Existing Competition

There are currently two existing facilities in operation. One is a single automatic bay and 2 self-serve bays and I hardly ever see any traffic there. The other has recently added a second automatic bay, and has 4 self-service bays. They are regularly busy and seeing lines of 5 or 6 deep at both automatic bays is not uncommon.

With that said, I have spoken to dozens of truck owners that wished they had an automatic bay for doing their trucks. Also the "reputation" of the 2 facility I mentioned above is not very good.

Currently the school buses are being cleaned manually.

 

[Whale of a Wash]

Have you figured out what your truck wash would cost?
How much will the banks loan you right now?

 

[ViperSBT]

Have you figured out what your truck wash would cost?
How much will the banks loan you right now?

No, still doing research on it... There are a lot more manufacturers out there than I had envisioned and there are a lot of options that I am wondering about...

Where do I start with addressing the bank? I'm guessing a business plan would be my first step?

 

[Kevin James]

The first place to start is with your lending institution. Tell them your plan and ask them if they will lend you 1.5 million for this project and see what they say.

 

[Whale of a Wash]

The banks will probably also want $300K down for that amount,and most
likely will cost that $1.5M or more. Just a guess but an automated bay for buses will be 3-500K complete meaning i would want to look into the buses
and see if they are interested in spending real money. In our city all the school buses are contracted out and they probably wouldn't use my wash if i had a bus wash -as school contracts are pretty tight budgeted around here. It might
be best to check the market real well, and see if there is enough in the budget
for washing

 

[robert roman]

The proper place to begin is location (market) and site.

Will the location/site produce sufficient sales?

You propose automatic truck wash so you can serve a niche that includes heavy duty pick-ups, step-vans, utility trucks, fleet vehicles, school buses, etc. as well as passenger vehicles.

Since someone mentioned bank, let’s solve for size of the plant first.

The least expensive way to wash a vehicle the length of a school bus automatically would be to design a 50’ long, touch-less “drive-through” tunnel.

This implies a building 20’ W by 50’ L by 24’ H or 1,000 SF plus mechanical room 10’ W by 50’ L or a total 1,500 SF.

A basic steel building, erected will probably cost out at about $100,000.

Heavy vehicles like school buses will require a 9” slab and entrance pads rather than 4” or 6”, so figure $50,000 in concrete work plus $50,000 in site work.

Based on the automatic drive-through systems I’ve seen, you can design a 50’ touch-less tunnel for about $150,000, plus $25,000 to install plus $40,000 for mechanical and electric work or a total of $251,000 for equipment.

Now you are up to $451,000 less the expense of soft cost and land.

Let’s say you lease land and a partner covers soft cost.

If you could borrow money, loan-to-value 70 percent, equity required or your investment would be $135,300.

So, return on cash of 20 percent would require net operating income of $170,000 or a return on investment of 26 percent.

Factor in expense ratio of 60 percent and your truck wash would need gross sales of $425,000 to produce the returns mentioned.

So, is there $425,000 worth of business in your market?

I hope this thumb-nail analysis points you in the right direction.

 

[ViperSBT]

The first place to start is with your lending institution. Tell them your plan and ask them if they will lend you 1.5 million for this project and see what they say.

Yes, it looks like putting together a solid Business Plan is going to be the first step in this journey.

 

[ViperSBT]

Robert, that is some great food for thought and a good measuring stick to work with... Thank you!

 

[robert roman]

You are welcome.

The method I used above is called concept planning. It is the front end of the project development process.

The next step would be to continue to work with the model until the numbers make sense to you – is there enough of a there to proceed forward.

If so, the next step would be to develop a feasibility study – a rigorous examination and evaluation of the benefit cost of the project.

If the project is commercially viable, then you would develop a business plan to support external funding such as bank loan or venture capital.

 

[Waxman]

As I recall your market contains 26k people.

You stated there are 3 in bay automatics and 6 self-serve bays.

Robert Roman stated $400k+ gross is desired in an initial, rough estimate of roi calculations.

I can tell you that there's very little chance you will achieve such numbers in this marketplace.

I'm no carwash expert or consultant, but I have common sense. No-go.

 

[bigleo48]

I live in a town drawing about 30k pop. I am directly next to the busiest hwy in the country, next to a big box location and behind the big box location is an industrial park. There are so many trucks on that hwy that at night it seems like a constant train going by.

I have had hundreds of truck drivers ask me for a truck bay. The local school bus lines does not have their own washing facility. Many Many RVs of snowbirds drive by and park in the Walmart next door. No competition in truck washing for a 100 miles.

I would not build a truck wash for many many reasons. My freind has a wash with 2 truck bays 100 miles away on the same hwy...he regrets it. Mr Roman's numbers show it as a non-starter.

Sorry dude...

 

[robert roman]

My numbers were meant to illustrate method, not judge the project.

For example, there is information given on population and competition but this is not nearly enough to determine if there is unmet demand.

If average price is $50, 8,000 truck washes is gross $400,000.

At $25 per wash, you would need 16,000 visitors.

If you wash 20,000 passenger cars @ $10, then you need 4,000 trucks at $50 or 8,000 trucks at $25.

Thus, the analysis keeps circling back to solve the location problem; will the site/location produce sufficient sales.

So, can your site/location attract 8,000 trucks or 20,000 passenger cars and 4,000 or 8,000 trucks?

This is what is meant by concept planning.

 

[bigleo48]

Robert,

Yes, I didn't mean to make your post into a judgement. But the numbers you posted in a town of 20k pop is a screaming stop sign to me. But maybe I'm wrong....but in this case I highly doubt it.

 

[robert roman]

No problem.

A client of mine, Wash A, has a single in-bay in the S.W. serving a market of 3,500 people. This owner washes over 20,000 vehicles annually. Traffic count is 4,000 or capture rate of 0.014.

A wash near my office, Wash B, has population density of over 3,000 people per square mile and daily traffic of 85,000. The owner doesn’t wash 75,000 cars a year – this is a capture rate of 0.0024.

The number of washes per customer of Wash A is 5.7 to 1.

Wash B is 0.88 to 1.

This is why location problem needs to be solved first.