Advise for Potential Operator

[Patrick H. Crowe]

Mac:

When you tell the poster that the surveys from PC&D and ALN are "the only sources out there" in my view, you render him a considerable disservice.

Have you not seen the other mags? Have you read the Car Wash Appraisal Handbook? Have you studied the 30 Self-service Car Wash Technical Bulletins?

There are so many other places to get information it would be a shame to limit a person to those two surveys.

Patrick H. Crowe

 

[mac]

Dear Mr Chroe. I don't think you understand what I said. I thought that the poster was looking for numbers on what real washes are doing now. Read his last request. I have read and purchaased both your technical bulletins and your book, and your plans for a self serve wash. I found the book OK, the bulletins really outdated, and the plans were so bad, that I demanded a refund because the wash showed looked like crap. You did send me a refund on the plans. In all three of these there was not any way to determine what washes are doing today. The two sources I cited are it. If there are more let us know what they are. Anything else is what some salesman has printed out. Please enlighten me.

 

[CleanUp]

Thanks for the tips on where to find some recent, relevant statistics. I did look at PC&D, and ALN online and although their search function came up with alot of information, there were no recent statistics or pricing surveys on either site, at least not that I could find. Does anyone have some recent generic numbers they are willing to share?

 

[mac]

CleanUp, they do that on purpose. If you call them, they used to sell it for $5. Still worth it. I would even go back a few years to see any trends, or look up someone who hoards them and borrow them.

 

[pitzerwm]

Bear in mind that those surveys are just from people that take the time to fill them out and return them. In no way are they a real cross section of anything.

 

[Waxman]

Also keep in mind that many people make this mistake when creating pro formas for 3 years out in a new venture: they overestimate revenus and underestimate expenses or forget line items in the expense section, like burglar alarm system monthly fees, extra singage that is always needed, water testing, extra electrician, mechanics, plumbers fees that are sometimes necessary, etc.

It's easy to plug some generic #'s into a spreadsheet and make something look like it's going to be very profitable, then not realize those #'s in the actual operation of the business based on many factors, both within and not within an operator's control. What if your soaps do not clean? What if a local factory lays off, what if...

Be extra conservative in your projections; underestimate revenues and overestimate expense and see how it pencils out.

 

[mac]

We all pretty much agree that the surveys are not that exact. However they are the only thing that I'm aware of that do reflect some real numbers. They have been pretty close to many washes whose figures I did know. It also seemed that new washes, if built well in a decent place, always did better than the surveys.

 

[rph9168]

I would agree with Waxman on estimating revenue and expenses. It is wise when estimating to be conservative on revenues and slightly on the high side on expenses. Also be sure to take into account that it takes time to build revenues and there always seems to be some expenses that pop up that are unexpected.

I would also agree with Mac on the surveys. Although they are relatively small samples of the population I have found them to be in the ball park in most cases. You should also be aware of the current traffic count and projections for future traffic as well as any current or future building that might affect it. A demographic study is fairly important especially for self service and IBA washes since they tend to draw more of their volume from the immediate vicinity than tunnel washes. Some may dispute that but from my experience it is basically true with very few exceptions.

The one thing I always worry about are potential operators that become infatuated with a certain site or operating platform even though most of the information points to a poor or borderline situation. I have seen even very competent operators fail in those situations so the odds of someone new to the business making it are very slim. Select a good site, a good distributor, do your homework and if all looks favorable be prepared to work your a$$ off to succeed. Nothing comes easy in this business.

 

[pitzerwm]

This is one time that I agree with Pat C, Using gross, you can plug in your own expense estimates. The gross is harder to fake. If you have any CW experience then you know the expenses and if you don't you can work with someone here.

 

[mac]

I remember reading in one of the trade journals about 5 years ago of a new tunnell that went belly up before it opened. The main reason this stuck in my mind is that the wash had three partners, and all were considered successful veterans with 20 years each in the business. All were recogizable names. It went broke before it opened. It was somewhere in the northeast. It's sometimes good to remember that good washes can come from new investors with no experience, and investors with many years experience can fail big time. You pays your money, and you takes your chances.