How much revenue loss to expect from new nearby carwash?

[arizonabuild]

Hello,

This forum is a great resource, have spent hours searching and reading and have learned a lot.

Was just about to put an offer in on a car wash(3 SS and 1 Auto), literally within the next week. Did a google search and found a brand new wash is going in within a mile(4 SS, 2 Auto, 2 RV, and free Vacs). I had called the city permitting dept and they were not aware of any present or past building permits for carwash's, so kinda shocked to see one about to break ground. Question I have: How much revenue can expected to be lost due to the new competition? Is there an industry standard?

Thanks! Build

 

[MEP001]

There's no industry standard for this sort of thing. An established and well-run wash can usually hold up to some competition, but if the new one is in a better location it will probably ruin the older wash. If everything else is equal, you could still compete with better quality and price. Free vacs are hard to contend with, but in my experience free vacs are poorly maintained.

Bottom line is, your question cannot be answered with any degree of accuracy with the small amount of info you've given. If you don't already know what you're doing in this industry, you're probably better off investing in something else.

 

[Randy]

A mile down the road is pretty close. Is it going to be on the same street? You probably lose about 40% maybe a little more.

 

[soonermajic]

Those 2 guys are right. The owner would have to accept 2x gross, OR LESS, to make it work. Then you're still gonna have to work your A$$ off to keep up,& i ain't joking
Remember, All that glitters is not always Gold.

 

[mjwalsh]

Those 2 guys are right. The owner would have to accept 2x gross, OR LESS, to make it work. Then you're still gonna have to work your A$$ off to keep up,& i ain't joking
Remember, All that glitters is not always Gold.

Since 1968 when our SS car wash was built ... we have gone through many episodes of new competition making their big splash. I echo soonermajic ... the part about having to work extra hard possibly for less money for even a few years. Hopefully, it improves within a year or two as reality soaks in for some of the newbies. IMHO, it seems like it might be tougher to compete in an area saturated with a large number of gas stations offering "free wash" with a fill up!!!

 

[pgrzes]

My response would be that "the current owner knows about this" Why didnt he mention it? I agree with the other responses except that I wouldnt be surprised if he hurts even more then the 40% mentioned due to the free vacs. You dont hear too much about free vacs in SS IBA world, we just dont have the capacity to overcome the vac income. I could be wrong on that but in the last few years of free vacs becoming more prevalent, I just cannot get the numbers to work. Good luck but my advice would be if you are really interested a huge chop is in order and be prepared for a ton of work and maybe for little or no $$$. And if you are not doing this alone(with partner) should probly be a walk.

 

[arizonabuild]

Thanks for the replies! Gonna have to get a much better price or find something else.

 

[washnshine]

If you get the wash, make it so the new builder posts a question on this forum asking how much business the existing well run wash down the street ( you) is going to prevent him from getting. Don’t assume “new” “wins”.

 

[arizonabuild]

If you get the wash, make it so the new builder posts a question on this forum asking how much business the existing well run wash down the street ( you) is going to prevent him from getting. Don’t assume “new” “wins”.

No doubt. The new one is going to have lots of overhead with several employees. My old timer car wash owner friend says that the 1st owner usually goes bankrupt, the 2nd owner goes bankrupt half the time, the 3rd owner makes money. Probably applies in this situation perfectly.