Gross vs. Net on the tunnels....

[soonermajic]

I have a couple sites with IBA's & SS washes. My gross is around 40%.

I have a carwash friend who manages a tunnel. he says his gross is only about 25%. That includes the loan, salaries, & all the other things associated with the biz. That sounds like a low profit margin. Is this typical of the tunnels? I belive that 40---60% is typical for IBA's. My gross is much lower because I pay over $2500/mo in salary, to my prepper..

 

[Earl Weiss]

You really need to look at how you define "Gross". Some Tunnels prep and some do not. If they do not prep than labor cost should not be deducted to arrive at Gross. The same amount of labor can process 15 CPH or 150 CPH. I would say that if you only deduct incremental cost per car for basic wash, maintenance, utilities, solutions, then 25% is way too low.

 

[OurTown]

It looks like he is including debt service too.

 

[soonermajic]

Think I meant net is 25%...?

 

[Earl Weiss]

Think I meant net is 25%...?

Still somewhat meaningless without details since some fixed costs like debt service and real estate taxes can vary greatly.

 

[dukeofsuds]

Other than water and electric so many costs are fixed. So the key to me is utilization (aka car count). If you're busy and he's not, that makes all the difference.

 

[Earl Weiss]

Other than water and electric so many costs are fixed. So the key to me is utilization (aka car count). If you're busy and he's not, that makes all the difference.

Other Variable costs: Cleaning solutions, maintenance, water heating cost (I am about .30 / car for maintenance.)

 

[soapybroker]

I was thinking the same. Maybe he/she is accounting for debt.