Looking For Advice

[seattleguy]

Hi to everyone.

I am new to the industry and this board. I have just purchased a 7 bay SS car wash in Seattle. It is a inner city location - failry tough neighborhood. The site has been neglected for many years and is in need of serious repairs and upgrading.

About 3 mile away is a beautiful competitor. 4 ss bays and 3 touchless automatics bays. Every bell and whistle and very well maintained.

My plan is to repaint mine and bring everything into working condition. Do whatever is necessary to make mine fully operational and add hot water. I will also probably switch to a token system and add credit card processing. I will also clean eveything so it looks presentable. The vacuum pressure is very light and will be fixed or replaced. There is an old broken vending machine that looks terrible. I will buy a ShurVend machine and offer the usual accessories. Shoudl this work on cash and tokens?

My competitor charges $2 for 4 minutes while mine is $2.50 for 4 minutes.

I was thinking of lowering my price to $2 for 5 minutes using tokens. I would advertise it based on price and value. Does this strategy work for car washes? Les money - more minutes seems conceptually like it should bring in repeat business and loyalty.

I should add that I bought the location as a real estate investment with a 5 year window. Eventually the site is probably best utilized as mixed use residential with retail at street level. Because of this I don't think I want to drop a lot of money into major upgrades, but I am not opposed to the idea 100%

Any thoughts? I would really appreciate any discussion and ideas from industrty veterans such as yourselves.

 

[kentadel]

I think the answer is in the fact you purchased it for possible other use. I would clean it up, lower start up price,make sure everything works, and then see what kind of customer base you have before investing much more into it. Good luck!

 

[Buzzie8]

I think that you need to have some value proposition. Possible value offerings could be better price, better equipment (hard to do when you have a late model wash down the road), different offering (ie dog wash, detailing, lube oil). I have no idea what you paid for this but based on your post, if you don't want to throw good money after bad you might want to start your 5 year plan early and take the property to it's "best use" right now and not chase your tail in the car wash business. It could get costly for a property that is better utilized for something else.

 

[seattleguy]

I think that you need to have some value proposition. Possible value offerings could be better price, better equipment (hard to do when you have a late model wash down the road), different offering (ie dog wash, detailing, lube oil). I have no idea what you paid for this but based on your post, if you don't want to throw good money after bad you might want to start your 5 year plan early and take the property to it's "best use" right now and not chase your tail in the car wash business. It could get costly for a property that is better utilized for something else.

By better utilized I just mean the land was so incredibly expensive that even with a very successful car wash it probably wouldn't pencil out to justify the cost. I saw that without really having anything to base it on though. Is there any kind of industry average for a self serve bay? What about expected payoffs for in bay automatics?

There really isn't any way to take the property to what I would consider a 5 or 10 year plan now. As you all know, banks just aren't lending for redevelopment.

 

[mjc3333]

If the land is actually worth something more than the carwash can produce, you will not be able to price yourself in the current market place to be competitive with any competition especially a newer facility.

There are industry averages, but they are just that, averages.

What you need (income) and what they are (averages) can be totally different.

You will eventually just split the pie with the other wash if there is not enough population to handle both.

 

[robert roman]

“… just purchased a 7 bay SS, inner city, fairly tough neighborhood, neglected for many years, in need of serious repairs and upgrading.”

My plan is to repaint, bring everything into working condition and fully operational, add hot water, switch to token system, add credit card processing, clean everything, vacuum fixed or replaced, I will buy a ShurVend machine.”

The final cost to do these things may be considerably more than you think and may be more than the wash can support. In certain markets, SS has become a niche where the replacement value is often greater than the market value of the property.

“I was thinking of lowering my price to $2 for 5 minutes using tokens. I would advertise it based on price and value. Does this strategy work for car washes?” No, because there is absolutely nothing to prevent the competition from matching price.

“Any thoughts?”

I have a few but they go beyond what I would be willing to discuss here.

I can be reached.

 

[Tpoppa]

I took over an older 4 bay ss wash in a urban area. It needed attention. I took it in 3 stages.

1. Fix everything that was broken. New coin acceptors, new low pressure system, 2 new pumps, repaired change machine, rebuilt a tankless water heater, new hoses guns and brushes, etc.
2. Appearance - After everything was working properly, I tackled the appearance (why try to attract new customers to broken equipment). Paint, bay signs, minor lanscaping, etc
3. I am now adding updated coin boxes and adding a new option or two.

In 2 years, the wash is up 50% over what it was doing before I took it over. I am expecting another 15% growth next year.


How much growth would you need to cover your costs?

 

[Earl Weiss]

FWIW I would match his price but not undercut him. You don't want to start a price war.

 

[seattleguy]

I took over an older 4 bay ss wash in a urban area. It needed attention. I took it in 3 stages.

1. Fix everything that was broken. New coin acceptors, new low pressure system, 2 new pumps, repaired change machine, rebuilt a tankless water heater, new hoses guns and brushes, etc.
2. Appearance - After everything was working properly, I tackled the appearance (why try to attract new customers to broken equipment). Paint, bay signs, minor lanscaping, etc
3. I am now adding updated coin boxes and adding a new option or two.

In 2 years, the wash is up 50% over what it was doing before I took it over. I am expecting another 15% growth next year.


How much growth would you need to cover your costs?

Just the cost of maintanance and upkeep. Proabably hire a kid to sweep and empty garbage daily and check that everything is working.