Getting into the business.

[blakebcg]

This is almost my first post (and hopefully not my last ) so I may as well introduce myself! My name is Blake Griffin, I am 18 years old as of writing this and I live in Florida. Right now I work almost full-time doing various internet marketing, but I'm also active in the stock market learning to trade options and pennies in my spare time. I'm hopefully in the next year or two looking to start a car wash, and I've entertained the idea of a chain of car washes, but I know next to nothing about the business, so I'm not even sure if that's practical.

There isn't a lot of up-to-date information online about starting one of these, but I purchased a book by Entrepreneur Magazine's called "Start your own: Car Wash" (I have no relation and I am not an affiliate) and it has a lot of useful information.

I just have a few questions for you guys who are actually in the car wash business..

In the book it talks about a self service wash generally costing 200-250,000 for 3 SS bays and one in-bay automatic, and they can make around 50-60,000/year. I'm wondering how accurate this is? It also has statistics for full-service washes and conveyer washes.

I'm also wondering if you guys ever regret getting into the business? I know it can be a lot of work with vandals and such, but investing 250k to make 50k a year means it would take 5 years just to break even..

I understand this business is the opposite of what most people think it is (it isnt passive income at all). If you could do it over again, what would you do differentely? Would you ahve started a different type of car wash (full service vs ss, etc)?

And lastly, is it unpractical to think someone could start a chain of car washes? I'm only 18, and my plan now will probably change a million times, but I like to look at my options.

Any comments aside from my questions are definitely welcomed aswell, I want to learn all i can!
Thanks, guys!

 

[buda]

Blake

Starting a car wash takes MONEY, and lots of it. At 18 I must assume that you do not have the cash nor the financial assets necessary to finance a car wash. That is, unless your family will put up the money or co-sign and have the financial network for a multi-million dollar loan.

If you want to make BIG money in the car wash business you need to build either a conveyorized full service carwash or a conveyorized exterior carwash.

The first would cost a minimum of $3-4 million dollars and the latter at least $1.5 to $3 million depending on the area of the country, including land.

The self service business is becoming more difficult to justify itself. That is, you simply cannot get the return if you attempt to build a self service wash today. Costs are just too high and the return limited.

If you are serious in this venture and have access to the finances you will need those of us here on the Auto Care Forum will be happy to assist you.

Regards
BudAbraham

 

[blakebcg]

You're right. While I might be able to start a SS in the next year or two, a 3 million dollar venture is way out of reach for me right now.. When you say "BIG money" what does that entail?

And the car wash your describing sounds like a full-service, am I right? Where the car goes on a conveyer, gets washed, and then employees dry it and do the interior? I cant imagine where 3 million would go... Is it mostly in building the place?

 

[buda]

Blake

Your numbers for a self service are close, about $50,000 a bay for self serves and at least $150,000 more for a inbay automatic.

That is for equipment, construction, building, but you still have the land to pay for or lease. Does not make sense to lease land most car wash investors buy the land. So you got to calculate that into your budget. Then you have to have operating capital so are you looking at close to $1 million even for a self service.

A conveyor wash can be either a full service or an exterior only. The full service is as you describe, an exterior operates with one or two people maxium. Customer pays gets on the conveyor and leaves.

No matter what car wash concept you choose it takes MONEY and you have not indicated where you are going to get the MONEY.

Typically an 18 year old does not have access to that kind of money nor the net worth to borrow that kind of money.

 

[MEP001]

In the book it talks about a self service wash generally costing 200-250,000 for 3 SS bays and one in-bay automatic, and they can make around 50-60,000/year. I'm wondering how accurate this is? It also has statistics for full-service washes and conveyer washes.

That book is either full of crap or horribly out of date. The amount of land alone you'd need for a decent 3-bay SS and auto would cost you that much or more. Does it say you can NET $50-60,000 a year? No way on a newly built 3/1 with current costs for utilities, chemicals and property taxes.

I assume it doesn't mention that no bank will loan you money for a car wash without at least 30% down.

Read some older posts on this forum and educate yourself on the current state of the self-serve car wash industry in Florida.

 

[buda]

The national average gross income per self service bay is about $1300 a month.

If the inbay automatic could do 2,000 cars per month, which is doubtful, you calculate that number by whatever you charge for the wash

That will get you the gross income and you can figure say liberally a 50% pre-tax profit.

Will that get you what you need for the investment needed? I do not believe so.

But the question you have failed to answer Blake is if you have any money?

Regards
Bud a

 

[vinh]

I have a 3 SS bay and an IBA that I bought for $270,000 five years ago. It generate about $65 to $70K in gross with about $40K in net. If I were to do it again, I would have invested my money in the stock market instead. The first question you need to ask yourself, can you fix a machine if it were broken. If you have to call someone to fix a problem, car wash is not for you.

My advise is to you is to stay in school, get an engineering degree, buy apple options. Don't look back at carwash.

 

[Waxman]

Go and work at a carwash. Really commit yourself to it for a couple years. Sweep the bays and lot, wash the walls, clean the pits and empty garbage. Ask for opportunities to help fix broken equipment, do landscaping projects and develop new ideas for signs and marketing campaigns. Help plan charity fundraiser washes and other community events at the wash. Join the local Chamber of Commerce and represent the business in that arena.

Do those things then get back to us.

If you are unwilling or reluctant to do any of the above, then I second vinh's advice.

 

[soapy]

I can't see any way you can build a 3 bay SS with 1 automatic for under $600,000 in todays market. I have built 3 washes myself and the first one I built was a 4 SS bays and one auto bay 20 years ago and it cost over 500,000 and I already owned the land.

 

[bigleo48]

I believe the cost quoted are low. Around here if you want a quality build SS wash with all the options with CC clearing, its more like $80k per bay. Stand alone IBA is over $400k....plus land. "High Barrier To Entry" is the way I describe it. If you don't have much cash...get into dog grooming or a pizza joint..."Low Barrier to Entry" that's why they are a dime a dozen.

What you don't have at 18...even if you have the $ to do it, is the ability to run this kind of business. I built at 43...worked as a tech my whole life and my wife is an accountant. So I fix everything from the toilet, to computer/networking, to gear boxes, pumps, plumbing, electrical, etc. My wife does the accounting. It takes a fair bit of time to acquire all those skills. Not to mention the 'sober' view of life you get over time. When your young...your just too rosy about business...as you get older, experience teaches you to be more critical and pay attention to that voice in your head saying "is this really such a good idea?". So perhaps a franchise would be a better choice if you've got the cash and no real experience...they can hold your hand till you can walk.

 

[Waxman]

Bigleo has out it very well; especially the 'sober' part.

I still remain an optimist but the optimism has been tempered by reality.

There is no 'build it they will come'. There are few true 'days off'. Few businesses are a 'gold mine' (everyone's favorite way to describe a carwash when they know little about this business).

Get real and go work a wash like I said; managing a nice carwash/lube/detail shop is a decent goal for a young man like you. Try that first.

I was in my late 30's when I started the wash and had already worked hard in the car detail game for years and years, never making tons of money at it.

 

[Kevin James]

Blake the best advice I can give you at your age is to get a quality education. The self-serve car wash industry is a slowly dying low profit industry.

 

[JustClean]

Hey Blake, are you still there???