Looking for advice, buying new wash....

[soonermajic]

Wash I have bought, is barely a money maker....but does make about $500/mo. This may change, going forward, as I am through remodeling this place. I may have a chance to buy another wash, that comes with a full-time employee, who preps IBA cars, & can also fix things. The other wash makes about $95k/yr, & has costs of about $45k/yr. It has all old MH lighting, $1 start up on S.S., & $5,$6,$7 on IBA. Town of 7500, w/ 1 other IBA (Lube place), & 1 other 4 bay SS(terrible location & always has 1/2 bays down).
Wash I have a chance to buy, IBA does 25 cpd(which I'd also need to install a nice, used dryer system). Needs to be cleaned up, lighting, & a few other cosmetic things. IBA is about 13 yrs old, & SS equipment is 15 yr old Jim Coleman.

Thoughts: If I raised IBA to $5/$7/$8 & $10(Dually wash---lots of Duallys, but no advertising of Dually wash), & S.S. start up to $1.50, is there a formula to estimate future profits?

 

[getnbusy]

What up Coach. There is no magic formula for future anything. If you cant make money with the purchase price and current income, don't buy it. I would not make any purchase decision on what might be. You gotta look at the numbers in front of you. Also, I'm sure there are plenty of hot dog diggity carwashes out there in carwash land, but I gotta say there is no way I'd be payin any kind of market price for a carwash. The only carwashes I would consider are bank owned or a wash offered for pennies on the dollar. But thats just me. If I had any business sense at all I woulda got out and pursued another field long ago.

 

[robert roman]

“You gotta look at the numbers in front of you.”

That’s true.

7,500 persons would not sustain three carwash locations based on same store sales.

Mostly likely, this is why subject has gross of only $95K, too many self-serve outlets.

Apply some business sense.

Sanity test indicates cash flow can support maximum monthly debt of $2,500. That’s loan amount of $350K based on standard terms and conditions.

However, acceptable risk reward would require final price of less than $250K.

So, you can beat your head against the wall trying to squeeze normal profit from an over-served self-serve market or reposition the business to capture the unmet demand.

 

[soonermajic]

1 of the other Self Serves NEVER EVER has anyone there. 2nd does very little business. Oil & Lube place does well with its IBA (which has dryers). This was does pretty good with it's S.S & really good with it's IBA (but no dryers, & that why it loses much of its business to the other IBA).
I think putting in new lights & cleaning entire place up, would allow me to easily go to $1.5 start up & $5 $7 $8 & $10 on IBA. There isn't a tunnel, Xpress or Fle, serve w/in 50 miles. Closest other IBA, except O/L is mine, which is 38 miles away. That's what I've done here in a town of 3000 & much worse economy. Business is up here, but just slightly, as I only raised IBA prices.

 

[robert roman]

“That's what I've done here in a town of 3000 & much worse economy.”

Yes, and wash makes only $500.

Problem is wash needs to make $3,400 a month.

$500 to $3,400 is pretty steep slope.

 

[soonermajic]

My wash does about $ 4k /mo. My mistake is trying too hard for early payoffs, on all e loans, & my bills are nearly $3k/mo. I won't make that mistake again.
If other wash makes $55k on IBA (25 CPD @ $6 wash) S.S. does about $40k, I'm thinking I can get the IBA to around $70k & S.S. to around $50k. That's gives me about $25 more per year. AM I way off base here? Those are even slightly conservative estimates.