Business Down Drastically

[David Moore]

This is my 5th year of carwashing and up until November, I'd never had a negative cash flow month and sales were always somewhat predictable. Then December hit and sales off 30% and January is down even more - I'm having to feed the carwashes over $5k this month alone. I own 3 locations in different parts of Dallas, however all the areas are lower income.

Weather has been so so, but nothing out of the ordinary bad.

Is anyone seeing similar drops in revenues?

 

[Ben's Car Wash]

We posted about this a month or so ago David... and some ripped me a new a$$hole and told me the economy was just great! Well look around now... Finanlly even the Prez has acknowledge that the economy is in the toilet! Giving $300 to people won't help either, not unless they'll spend all $300 at the car wash!

It's been a trend for several years. Bill argued this with me and basically said I'm nuts, I told him he needs to pay attention to the news. That was the day Ben Berneke met with Congress behind "closed doors" and it got almost no press coverage (about 3 weeks ago).

People are nervious. January is usually a bad time as bills are coming in from Christmas. This Christmas was one of the worst spending is years. The housing market is at a 25 year low! When the press mentions "RECESSION" daily and the president (doesnt deserve a capital "P") even mentions it..... it's BAD!

Tighten down, be creative. Do what you can.... it's going to get worse for the next 6 -18 months! This is my opinion.... I'm entitlited to it!

 

[pitzerwm]

It's confirmed, Doug's info that the sky is falling and we are all going to die. I saw on the tube today that in spite of a 124% foreclosure rate, that unemployment is below the national average 4.3%. Of course, parts of the country are down, but just because the Pres and the congress want to give everyone $300-$1200 bucks, only means that they want to get elected in Nov. Listen to what Hilary is going to give everyone and she is going to pay for it by taxing companies. You think that we have problems today, stick around. Seattle had 6" of snow this weekend, I'd imagine that their business was down a bit. I doubt if Randy thinks that he will need to file Chap. 7 next week.

 

[Ben's Car Wash]

No doubt Bill that giving people $300- $1200 checks is a "political ploy" that both parties want BADLY because it's an election year. However it would not be considered if things were as "rosey" as you paint them.

In case you haven't noticed.... bankruptcies are UP, home foreclosures are projected to hit 1% NATIONAL by the end of the year. And I don't trust the "un-employement numbers". the price of Gold tells the story of the US economy, as does the reaction to the US stock market by overseas markets.

Today the FED will cut another .5% interest rate.... I supose that's because this economy is on fire and we need to apply the brakes? Can you say HYPERRINFLATION in the future!

Dam right you better be concerned.

 

[Reds]

I just had the best January since I opened (3 years ago). For whatever it's worth, I am in a very rural, lower middle class area.

 

[Greg Pack]

To many people the downturn seems to be to some extent regional and weather related. We had a great weekend but this will be the third month in a row that is >10% below last years average monthly revenue. So, we are getting off to a bad start. I imagine the operators in housing bubble areas could see a bit of a bust as this false equity has evaporated.


I'm conservative but think the fundamental underpinnings of the U.S economy are unsound. This is a ten minute video worth watching. Even the head of the of the GAO says we're in trouble:

http://www.youtube.com/watch?v=I-16u9x3tfE

Other than defaulting on our obligations or inflating our way out of this enormous debt, what options are there?

 

[pitzerwm]

Look back in history, of course, you young guys won't remember other times where there were regional problems and high inflation (24% money) but the people that used their heads and came up with solutions, survived and the crooks and people that just threw up their hands waiting for the government to save them went BK. We had an economic downturn here in the mid 80's I had just bought my car wash and paid way too much for it. I ended up giving away $300K of crap, lost $45K on my home (paid someone to take it) and lived like a poor person for a year or so. Turned out to be the smartest thing, that I could have done. I save the good stuff and freed up $8K a month in cash flow. Sure we may be going to hell, especially if you listen to the media and the politicians, but I've heard it many times before when it never happened. One of the great things about the US is the people that figure it out and "make it work".

The bottom line is that YOU need to figure out what is the smartest thing for your survival at this time. If you do nothing, it might work, if you are waiting for Washington to take care of you, you are probably going to get screwed. Not since the depression has the whole country gone to hell. A lot of our US companies are now global, so it totally changes what will happen to them and you.

I don't know where Reds is, but he shows that the whole US isn't going to hell as others have said they are okay.

As for the Feds lowering the rates, if you paid attention, you would know that all of this is reacting to the perception rather than reality. There is a lot of information today that is available to you if you look for it, but too many people use the Daily show/Fox etc for their news and it couldn't get anymore twisted than it does there.

 

[Greg Pack]

You mentioned you operated in a low income area. Another thing I think is low income people have a little less money in their pockets right now. High food and fuel prices might have an impact on whether they have enough money for carwashing.

Have you seen any changes in your immediate market? Any express tunnels around?

Spring is right around the corner, that will be a welcome sight for me. Bring on the gold dust. baby!

 

[ted mcmeekin]

Foreclosures on homes is less than 1 %. Bad if you are in the 1 % but insignificant in grand scheme of things. Bus forclosures are always above this even in best of times--not quite a crisis.

Ted

 

[Waxman]

Washes with manageable debt service, low labor costs, additional profit centers, and an owner on-site to run the place can do well in this economy.

Yes, I'm always looking on the bright side. But I've also been through hard economic times before and have been an entrepreneur for 24 of my 38 years on the planet.

Worrying does me no good. Neither does complaining. I focus on the positives. I give back to the community that supports me. I minimize expenses where I can and try and win in the margins. It has worked for me.

 

[pitzerwm]

Worrying about things that you can't change is a good way to have heart problems. You want to see things go to hell quickly listen to what Hilary will do if in office. A moratorium on foreclosures and freezing the interest rates for 5 years. Think about the results of this action on your business, your ability to borrow money and every part of our economy. It makes all contracts worthless (if the government can step in and change them) Anything frozen will ripple though out the economy just like it did when Nixon froze prices in 1971 (I think it was) Thankfully, people talked him out of that quickly. The market place always works unless the government decides that it knows best.

 

[Twodose]

Hey Greg, I like the picture you got there of Billy Bob in Slingblade, Umm-humm, that was a good movie, he's a brilliant actor, I got a kick out of that.

Anyway a little off the subject but...

I know that my business has been down over the past couple years, accompanied by inflation, the profit just doesn't seem to be there like it used to.

 

[Greg Pack]

Glad you like my pic. I feel like Carl more days than not lately, so I thought it was a good choice.

Just finished my end of the month. January was a bad month for all washers here. For me, my gross rev right at 25% below 2007 average monthly revenue. Expenses have risen too, so net is down even more. Factor in inflation and true income down probably close to 8% over last Jan.

Having said all that, I guess January is just a suckier month than I realized. Jan 2008 was within $100 of January's 2007 revenue. Plenty of time to play catch up in 2008. I guess its time to dust off the clown suit. I'm gonna go stand by the road and wave at the kids.

I'm in pretty good shape because of my low debt ratio. Some operators in this market that are over-leveraged and are really hurting. I think the local carwash heard will be thinned in 2008.

 

[pitzerwm]

Everything is always relevant, In the market, In the first 20 days of January, I was down all of the profits all the way back to June 06. Is the sky falling? Only if you believe that it is. When it is your bull that is getting gored, its a big deal, but like I keep saying, only you can decide what to do different, like Greg getting into a clown suit, and make due until things change. If it only went up we wouldn't learn anything. Adversity makes you smarter if it doesn't kill you.

 

[Ben's Car Wash]

Well Greg, About the smartest thing I heard come out of Glenn Beck's mouth in months was RON PAUL for President!

Bill complains about "washington handouts" WTF? Who get's the majority of Washinton handouts? Israel? Pakistan? Farm substidies, Oil companies, Railroads, airline compaines, Senior Citizens in Medicare and Social security, $hit... I never knew that even sock manufactures are subsidized by the US govenment.... but the implication is that it only lazy a$$ black and poor folk waiting in welfare lines who won't work get it...imagine that!

And I'm working 80 hours a week to support my family and grow a business for what... to pay a debt of subidies... an unjust, illegal war but have no right to bit(h about it? Dude.... I read history books. I had a father who lived in the great depression and I grew up poor. I know what hard times look like and what Bull$hit smells like! We went into 2000 with a FEDERAL SURPLUS, LOW UNEPLOYMENT and 116 months of straight uninterupted growth (the longest in US HISTORY). I'm not going to get into this now... I'm over it.

If you payed attention today, the job report came out, down 22,000 jobs last month. This hurts local economies. Yes, maybe CHECK CASHING is a good business because poor folK don't get bank accounts and "back in the day" you could rip people... I mean charge 20% fees for cashing a check EVEN IN A DOWN ECONOMY. BUT WHEN PEOPLE CAN't FILL THEIR GAS TANK, or haven't seen a pay raise in "REAL WAGES" in 4 years as earnings, car washes will suffer.

As far as the video link went, yes... supply side economic only works if you CUT SPENDING.... TAX CUTS ARE A JOKE AND NOTHING BUT A CHEAP POLITICAL STUNT to get votes and keep a certian party elected. On the other hand, entitlements do the same. Were "f'd". One party CUTS taxes while the other spends, one increases the size of the goverments while professing to "limiting the intrusivness of government in your life" BS(We now have the largest government is the history of the World)! Like I said.... the govenment wants to give me $300-$600 per kid and $1200 per household because were in an economic "recession" but wouldn't cover 12 million kids health care because it's "SOCILIZED MEDICINE" WTF is giving EVERY AMERICAN $600? IF THAT's NOT SOCIALISM I don't know what is?

Cont.

 

[Ben's Car Wash]

Oh... and you want to give me.... a business owner more TAX BREAKS (so we have LESS IN THE US TREASURY TO PAY OUR DEBTS) to buy more equipment, financed with money from CHINA that is leveraged with more US DEBT? That makes a lot of sense!

did I leave anything out?

 

[Ben's Car Wash]

Correction, Job loss was 17,000... not 22,000.

link to financial article.
http://www.marketwatch.com/news/sto...x?guid={925AC561-3996-496A-B147-4B3F2DB3714A}

 

[Sequoia]

Doug,

You asked if you left anything out. Doh!

Your analysis is shallow, incomplete, and not compelling.

Can't you do better?

 

[pitzerwm]

Doug, One major correction, check cashing places do not charge 20% for a normal check with ID. Basically, my point is all you do is bitch about stuff that you can't or aren't prepared to do anything about. Worrying and bitching about things that everyone knows about and you are not going to do anything about, is foolish. Most of the people here know all of this stuff, because its on the media all day long, but they are busy figuring it out and surviving, instead of bitching about it. Who did you think was the salvation 8 years ago, that you voted for? Who are you going to vote for this time that will solve all the world's ills.

And admitting that you steal towels from the hospital, sounds cool too. I'd like to see the policy manual that says one of your perks are all the towels that you need at home or at your wash. No wonder 10 minutes in a hospital, cost you $500.

 

[Ben's Car Wash]

Doug, One major correction, check cashing places do not charge 20% for a normal check with ID. Basically, my point is all you do is bitch about stuff that you can't or aren't prepared to do anything about. Worrying and bitching about things that everyone knows about and you are not going to do anything about, is foolish. Most of the people here know all of this stuff, because its on the media all day long, but they are busy figuring it out and surviving, instead of bitching about it. Who did you think was the salvation 8 years ago, that you voted for? Who are you going to vote for this time that will solve all the world's ills.

And admitting that you steal towels from the hospital, sounds cool too. I'd like to see the policy manual that says one of your perks are all the towels that you need at home or at your wash. No wonder 10 minutes in a hospital, cost you $500.

Well Bill, Eight years Ago, I voted for JOHN MCCAIN in the PRIMARY! And you see what I got. An appointed President, not an elected one (but that was 8 years ago). And if people do not stand up (bitching connotes some action afterall) and demand someting be done, nothing will be done. Only 12% of the British Colonies population in America engaged in the Revolution Bill.... which side would you have stood on? The 12% who complained, eventually fought and died or were hung for treason or the 78% who did NOTHING but say the other 12% where FOOLISH?

The blue towels are trashed after every case Bill, why not use them? They are not stolen (they sit in the open and we all are seen taking them home every few weeks)... nice try saying that I'm immoral like those poor folk wanting a "handouts and not a hand up". The point is you can't say that there is no responcability for this government and it's policies... that's Lasifare politics (sp)... and we hate the French don't we?

The government runs only to get re-elected and to keep feeding itself.... not to do what it was created for. It has become it's own beast.

Cont.