Last good year---2003!

[scout]

2003 was the year gas prices went over $2 a gallon. 2003 was the last year we made real money. Since then we have been down 30% steady. Last winter was a real winter, not that planet warming kind, and we did good. Then gas went to $3.50 this spring and it was a ghost town.
My feeling is that me and everyone else has determined that the car/truck we love is actually a huge black hole in our expensive American lifestyle-. I will stop and get my starbucks every day, and save by not washing the car--something has to go-. Have a nice day!

 

[Waxman]

First of all, all capitals is like shouting the whole post. Second, all businesses have ups and downs and are in one way or another affected by the economy. Instead of complaining about it, why not put your energy into turning things around? There are many possibilities for this!

And by the way, I make Maxwell House coffee at home every morning and enjoy it from a travel mug and I just bought the newest car I've ever owned; a 2000 Honda, which I love!

 

[guywashingcars]

Amen to that. I've been forced to invest in a prepless wash process to get my labor costs down. Had to do it with declining gross and no help. Due for a vacation but I can't afford it because all my money is invested in the prepless equipment. Firmly believe that the American love affair with the motorized vehicle is on the rocks.

 

[asalsy]

After 2003, the company I work for has bought three washes and increased profits. Simple as that! We work harder than the previous owners did. Simple as that!

Waxman, We will just work hard, stay positive and seek the rewards for our efforts. Instead of complaining

 

[Waxman]

Amen to that! I work hard every day at my car wash and detail shop; I keep service and value high. I understand full well the challenges that face many businesses today and I greet them with as little fear and as much positivity as I can manage. Period.

For those who only complain about car washing, maybe it's time to try something else. For me, the thought of sitting in an office or taking orders from a boss keeps me grounded and moving forward within my chosen field; car washing and detailing.

 

[Jim Caudill]

Waxman, my gut instinct tells me you haven't been in this business all that long (forgive me if I'm wrong). The idea that simply "doing a good job" or even being "the best in town" means that you will have a successful and profitable business just doesn't hold water. I'm glad that your region of Massachusetts is still doing well economically. It is possible to have 100% of the car wash customers and still not have a viable business! People don't have to wash their cars, it is highly discretionary. When times turn tough, people make choices about where to spend their diminishing dollar. Ohio has LOST 158,000 net jobs since 2001. Although that may not sound like much, there are many thousands of jobs that must be created every year to absorb new folks entering the work force. So, not only have we not created new jobs for all those high school and college graduates, we have actually gone backwards. I could go on, but I won't. Actually, I will, but not about this specific area. See the following post, I typed it all, but it was too long (2,000 characters max)

 

[Jim Caudill]

The Sept issue of PC&D in an article about "Save the IBA" on page 72 refers to the years from 1993-2001 as the "Golden Age" of IBA's. I remember posting about 6 years ago how the whole IBA thing looked like a "house of cards". I didn't think most operators were truly getting the whole picture on the true cost of providing an auto wash. I also said that I wonder how many operators would replace their wash when the one they had degenerated into a heap of rust and corrosion. Later on in the same article, the author looks at the state of Georgia and writes "of the 1,000 IBA automatics which are now in the field, only about 700 of these will be replaced in the future." Think of that, 30% of newly installed IBA's do not economically justify their replacement. Chance are, they didn't justify their initial installation either.

Lastly, the article states that the last five years have been lean (see "lessons learned" page 74) with washes that once grossed $6,000 to $8,000 per month struggling to reach $3,000 to $4,000 per month. How much do you think gas will be selling for next year? Do you think it will be more or less? Do you think real wages will increase or decrease? Some of this is a glass "half full" or "half empty" for sure; but, you also had better temper your unbridled optimism with a little cautiousness. If you are doing well, congratulations! Just keep your head low, keep on doing the best you can, and hope that what is happening in Ohio and other parts of the country doesn't repeat itself in your neighborhood.

The downturn that I have been seeing is shared by all the other operators that I have contact with in my area and is confirmed by some of my suppliers. What I think we are ALL trying to do is figure out some way of attracting customers back into the washing program, but it is tough to get them to spend $ on washes when they still want to eat out, or buy gas to get to work.

 

[Ben's Car Wash]

Jim,

Save your time, many just won't believe your FACTS. A co-worker of mine recently returned from Ohio.... she said nearly whole neighborhood were boarded up... a ghost town of sorts.

A headline article on AOL yesterday about the NURSING SHORTAGE (I know your wife is a nurse) said that this shortage will continue to get worse, yet SALARIES ONLY ROSE 1.3% last year for Nurses..... 3% or more BELOW THE INFLATION RATE! That equals a net loss of income NATIONALLY in a SHORTAGE of skill persons...... a fatal trend!

Today I got my letter from my Hospital that I work at. I'm been a critical care nurse for 22 years now..... I got a 25 cent raise! My hourly salary is $31.50 (I have a special area of knowledge in the Cardiac Cath lab). Yet that "raise" only represents a 0.8% increase in my salary! Now I'm extremely thankful for my profession that I chose to work in.... I have assured job security, but at that rate of "raises" I'll have to quit in a few years and rehire again at a new pay scale just increase my salary (most of your won't understand this... but we cap out at a lower rate then "new grads" who come into the market).

 

[Ben's Car Wash]

Cont.



This trend encompasses all professions and "blue collar" jobs. Real wages are down NATIONALLY. Foreclosures are now the largest in US HISTORY NATIONALLY. And more business are competing for that same "discreationary dollar", business that are much better at marketing for that $! Like that STARBUCKS chain, walmart, BEST BUYS... all spend millions just to figure out what triggers spending not on what is necessary.... but what is impulse. Bud Abraham alway posted about advertising or "what bring customers into a car wash". His answer is always the same "84% said they happen to drive by" which means its IMPULSE DRIVEN. Multinational corporations hold the key to IMPULSE BUYING and market speciifically to that. When discreationary spending DECREASES because a NET LOSS OF INCOME (record high personal debt) we as CAR WASHERS are at a severe disadvantage to compete for those decreasing dollars.

Real wages have to rise. Monday (LABOR DAY) a report of American income came out...... look it up. The Average CEO make 364% MORE that the average American Worker! I'm not sugesting SOCIALISM... I'm sugesting that American begin to care about eachother enough to define what is socially good for us.

 

[Ben's Car Wash]

cont.



A story about gun powder: Over 1000 years befor the invention of guns, the Japeneese (borrowed from China) made a bulistic weapon... basically a rifle. They saw no benifit to their "culture" for this weapon becasue for centuries swords became there main weapon.... as a symbol of the values.

When our "values" embrase RAP artist, Sports figures, movie stars and corporate excutives as more worthy of capital advance then nurses, doctors or teachers.... we've disguarded or "cultural values" of what is important... that emphesis being on a "super star" instead of the ordnary guy next door. This is not "wealth distribution" that I am speaking of (so please don't go there), but of realizing that no one person should make an obsene amout of money, while others are scraping the bottom. This is cultural as it was for Greek to accept pediphelia, Jericho resident to practice infanticide (burried fetuses in the lental of their door) or Oriental woman to wrap their feet. Super stars and CEO's do not offer the SOCIETY a benifit 354% higher than you, your wife or your neighbor.

That is my opinion. That is why Ohio is suffering. Compassion has been removed for profit in the obsene. Hell the Adult movie business is like the largest, most profitable business in the US... if not the World! Maybe you should just tear down the car wash and build an Adult video store!

I all seriousness.... good luck. My area is reporting a 50% decline in the past 2 years. Yet I'm holding my own. So far I'm up about 15% (without adding the self service) in gross $ but my car count is down slightly (about 2% YTD stems from last November 2006 - February 2007 as a decline was noted). Housing is very slow now but Commerical building is strong. Tampa is still a growth area even with housing flat.

Ohio need serious leadership now. I hear that over 10% of the housing is for sale in Ohio. Is that true?

 

[Greg Pack]

Jim there can be life after recession. Birmingham was a big steel town until the late 70's. I was a teenager but I remember major shutdowns of the plants, all related support industries, and super high unemployment rates. One local town had a 30% unemployment rate for a while. Over the past couple of decades, the focus has shifted to healthcare and financial services. I won't get into mfg vs. service economy but it seems everyone who wants a job has one in my area. Unemployment is low. Some of the old industrial communities suffered from white flight and have still floundered around, but overall the metro area seems pretty healthy.

Although my business is picking up, I've grown cautious lately. I think the big wildcards are gasoline prices and the middle east. And I don't think either political party has the answers. I really have the urge to pay down all my business debt as quickly as possible. When you're debt-free, there aren't too many storms you can't weather.

 

[Red Baron]

Not to get off topic, but we solved our expensive Starbucks habit buy buying a $200 Gaggia espresso machine. We figure it paid for itself in about 2 months, including fuel costs.

 

[pitzerwm]

Well said Greg, in the early 80's right after I had bought my wash, paying 50% more than I should have. They shut down 4 nuke plant construction projects, we lost probably 30K jobs, over a period of years 100K people left. Many of the smart people in town went BK, some of them my friends. Lucky, I survived with some blood loss, We had never had an economic slowdown here because of the nuke stuff, so a lot of people had no clue how to deal with it. They were sure that it would correct in 2 years, I figured 5 years but it took 7 years. Building lots that had cost $30K were $3K, do you think that I could bring myself to buy some, no way, I was as freaked as the rest of them.

Greg, is totally right, the less your debt service, the safer you are no matter what happens.

 

[Waxman]

Listen, Guys. I am a new car wash owner, but I have had a free standing detail shop for 12 + years. You wanna talk about a challenging business? Try detailing for your sole source of income.

I know times are tough in some regions and economic forecasts are bleak. My point is that I do not focus my thoughts on that stuff and instead look at positives. That's just me and if it seems like I'm very 'green' in this industry when I talk like this, so be it. I'll be the green one, no problem.

There are choices in life; every day we make a choice with what to do, what not to do, what to think about, and what to let go of. It doesn't change the fact that what we think about is what expands, so when you talk about scarcity, you get more of it. Think about all you need and the universe sends more need your way. Likewise, count your blessings, be in a state of gratitude, do what you love to do, serve others, and let success chase after you, as it most assuredly will. The glass must be half full to be half empty!

 

[JK Xpress]

Stop w/ the doom and gloom.

The inflation rate is no where near 4.3% as posted by another member.

Per post from another member (nurse raise of 1.3% + claim that it lags inflation by 3.0%) = 4.3%

According to the US Department of Labor (release date = 8/15/07), the Rate of Inflation is 2.36% (CPI-U 1982-84).

Things are not great w/ the US Economy but we are not near a recession either.

As far as the price per gallon of gas, I am trying to find what a gallon cost back in 1973-74 when the US Economy was challenged w/ a recession and an oil embargo. I am somewhat confident that if one indexed 1973-74 gas for inflation, we would discover that gas is cheaper today.

Does anyone remember what a gallon of gas cost in 1973-74?

I'll run the numbers and post back.

 

[pitzerwm]

Bottom line is that if you think the sky is falling or you don't think that the sky is falling, you are right.

JK, you are right adjusted for inflation, gas is still cheaper. When gas was .35 in the 60s, I made less than $2 an hour.

Old but a good reminder: http://www.harveymackay.com/columns/column_this_week.cfm

 

[Ben's Car Wash]

Ok, if by that same report that says inflation is 2.3% and wage earning actually fell for men -1.6% and woman -1.3 %1n 2006 whats the differance? the net loss is still near 4% of earnings adjusted for inflation!

We have regional issues... same for years. Yes my family lost income in the 70's when carpet mills/textile headed South. But the US had a manufacturaing base.... that has been off shored now or illegal labor is bening used to further reduce expense. Yet again CEO wages and corporate profits are at an all time high (in many sectors).

Some areas will take a long time to recover... some might never (New England has little industry compare to what it had in the 1940's -1960's).

Florida did benifit over the past 5-6 years, IMO because of it's governor relations with other political leaders. Yet our growth is lacking behind Arizona's in new residents. That's what I mean about leadership, what Ohio needs is a draw to business that will increase income and stop the bleeding of more jobs.

Reguardless, real wages are down 5 years in a row NATIONALLY. Debt is at an all time high. Where is the discreationary spending coming from?

 

[scout]

The problem to solve is systemic. High gas prices have moved the feelings and emotions people have for their cars. Their exists now a disconnect from the car as a source of pride and joy, to a tool or appliance that does the same duty as before, except the joy is removed.The utter dismay of long term high gas prices, has been transferred to the item that consumes our cash.
The problem is not just our washes--we are market share leaders. Our regular customers are rare now. If you had told me that carwashing would actually go down by 25-30+% in 2003,for 2004,-2007, What reason would I say that would propel this theory?
The objective facts are their for all to see-

 

[Washmee]

The problem to solve is systemic. High gas prices have moved the feelings and emotions people have for their cars. Their exists now a disconnect from the car as a source of pride and joy, to a tool or appliance that does the same duty as before, except the joy is removed.The utter dismay of long term high gas prices, has been transferred to the item that consumes our cash.
The problem is not just our washes--we are market share leaders. Our regular customers are rare now. If you had told me that carwashing would actually go down by 25-30+% in 2003,for 2004,-2007, What reason would I say that would propel this theory?
The objective facts are their for all to see-

I agree Scout, people hate their car now. Every time they have to fill up the tank it causes them pain. No love= No wash

 

[BillClinton]

At the risk of sounding like an optimist, you should look on the other side. If people hate their cars right now because of gas prices, then as hybrids and eventually plug-in cars become common, they will be spending less on fuel and love their cars even more than ever. (I recognize this may be a few years away.)