Minimum Wage increase and Regulatory Threats

[Sam]

Hey, you're the hotshot, Bob, remember? You're the Oracle of the autocare forum. I could randomly select any one of your 1,491 posts and see your hotshot attitude coming through. Funny thing about your posting statistics, seems you couldn't manage to hit the "Thanks" button to one single, solitary posting of another member since, I presume, Sept of 2007. But, then again, no one is the equal to Bob "The Oracle" Roman. The Oracle's job is to impart his hotshot wisdom...who could possibly tell the Oracle something he didn't already know.

We done yet Bob or do you want to keep going? Let me know buddy.

 

[Sam]

Thanks Jon, I'll score one for the tunnel car wash business. I, too, am happy when my laundromats finally close and the last customer leaves. Although, I got to admit, the thought of an IBA making money 24/7 has it's appeal too.

Although I just noticed that yours is a "full service" tunnel, the one I'm looking at is exterior only. You're giving people something they can't get from an IBA, that may be the key to it all. To me, the IBA is coming very close to what the exterior tunnel provides and they're doing it a lower price (at least from what I've seen) and at more convenient hours (24/7). But no one is agreeing with me on that point so I'll move on from the topic. Plenty of other things to consider.

 

[Randy]

Hey, you're the hotshot, Bob, remember? You're the Oracle of the autocare forum. I could randomly select any one of your 1,491 posts and see your hotshot attitude coming through. Funny thing about your posting statistics, seems you couldn't manage to hit the "Thanks" button to one single, solitary posting of another member since, I presume, Sept of 2007. But, then again, no one is the equal to Bob "The Oracle" Roman. The Oracle's job is to impart his hotshot wisdom...who could possibly tell the Oracle something he didn't already know.

We done yet Bob or do you want to keep going? Let me know buddy.

Sam, I couldn't have said it better myself. I’m from the land of the $15 an hour wage. What most businesses have done is raise their prices to reflect the increase in wages, no one really wins.

 

[MEP001]

I've read more than a few "horror stories" from areas where the minimum wage has already been significantly increased. A lot of those people are actually making LESS than before because the pay increase bumps them into a higher tax bracket, and they're earning too much to qualify for financial aid and food stamps.

 

[MEP001]

If you are such a hot shot, quit flipping out about nothing, buy the wash and quit wasting time.

Sam, this isn't the first time someone's caused him to take his ball and go home.

 

[BBE]

at what point will we start to see some washes pay less than minimum wage and claim the tips like restaurants do?

 

[robert roman]

“Funny thing about your posting statistics, seems you couldn't manage to hit the "Thanks" button to one single, solitary posting of another member since, I presume, Sept of 2007.”

Did you ever stop to think for a minute that I don’t ask direct questions?

Before I would come here, I would look for the answer myself.

As far as wisdom goes, I was washing cars and probably managed and owned one before you were born.

But, then again, you are the one that came here asking questions, and I told you where you could get the information.

Minimum wage is only an issue when a business cannot support excess labor supply.

If traditional full-service wash is not making normal or above normal profits (sick business), it will have a very hard time absorbing $15 hourly wage.

In this case, it might make sense to reposition business from full-service to flex-serve.

“at what point will we start to see some washes pay less than minimum wage and claim the tips like restaurants do?”

I’d say low likelihood.

For example, high-volume exterior express could handle $25 an hour (like in Germany) and still make good returns. Most new builds are large-scale exterior express or in-bays at gas sites.

For example, I doubt Metro Express is worried about minimum wage as its building a 36,000 SF carwash.

Plus there are other business models to consider.

For example, I just finished writing a story about a twenty-something college graduate that started a carwash business while going to school.

It’s an online waterless carwash service. She has 5 workers (college students) and is on track to gross $250,000.

She owns no building, carwash equipment or real estate and there is no mortgage or rent.

 

[Sam]

"Did you ever stop to think for a minute that I don’t ask direct questions?"

Bob, yeah I did but did you ever stop to think that you could just thank someone for a helpful or at least informative post? It happens all the time here. Even by people who may have been washing cars before you were born. Of course, you have to find something among the thousands and thousands of posts from people who collectively have thousands of years of experience that's helpful or informative. Not exactly like finding a needle in a haystack is it?

"Did you ever stop to think for a minute that I don’t ask direct questions?"
I know that! No one here has the knowledge or experience to help you.

Eh, I could go on and on but since the rest of your post was harmless enough and not directed at me, I'll play nice today (but, of course, there's always tomorrow)...

 

[robert roman]

I love washing and waxing my car. I love the carwash business. I loved working at the carwash. I love being a carwash consultant. I love writing about the carwash industry. However, I didn’t love operating a wash because I’m not a people person.

I also don’t text, do Facebook or Twitter about.

Sorry if my passion for carwash doesn’t carry over to social norms. That’s why I don’t sell carwash equipment. I would not be any good at it.

I’ve only joking asked for something once on this site and Earl Weiss mailed me a dollar bill which I posted on my office wall.

Certainly there is lots of experience and knowledge that frequents this site and you won’t find me telling them how to rewire a pay station, fabricate a pump stand or pour concrete.

I’m always available to match wits about carwash. It’s a good brain exercise.

 

[rph9168]

I don't consider myself the smartest person in the world but I have always tried to base my posts on the wealth of experience I have had in the car wash industry the past 35 years. I never try to be condescending or judgemental and to offer advice based on past successful experiences. One of the reasons I love this industry is the willingness of its member to share their knowledge to help each other to become better at what they do. It makes this a special industry to be involved in.

 

[Waxman]

i think it's amusing that this thread has turned somewhat hostile.

i have been encountering alot of misplaced anger this week and last. my theory is that it's the heat.

can't we all just get along ))))))))

 

[dewey9876]

Sam, I am in Mass, I am an owner /operator, I reclaim/recycle my water and I pay over minimum wage.

I am going to start of by saying the biggest problem is what rph9168 has in his signature block. "All car washes are the same, they are different." What may work for me, very well may not work for you.
As far as minimum wage, here in MA. It is currently $9.00/hour but I am starting employees at $10.50, I have to do this just to get people in the door to work, your area may be different. To me part of the problem is not just the increasing wages but our prices. For too long wash prices have been stagnant and not increased like other industries. It seems like every few months my Dunkin Donuts coffee goes up a little bit, why are car washes so afraid to increase prices?
As far as owner/operator... I would not be able to imagine not being able to fix my wash myself, when it is down I am not making $. I would not want to be at the mercy of a repair company. I do not know anything about the laundry business but I would imagine that you have many of the same type of machines. So if one goes down it doesn't necessarily mean you are out of business, just one is out of order. In the tunnel wash business we have many items that when broken mean we are out of business until fixed, (conveyor, water pump, air compressor etc.)
You talk about automating which is great (I have both a Auto cashier and human cashier as well as prep people) but remember when your pool of employees gets smaller you have less coverage. What I mean is if you have 1 employee and he doesn't show up...what then?... If you are not there who runs the wash or who even calls for a backup employee. Or if you have 2 employees and one doesn't come in, are you going to cover? Can one employee do it???
If you are not going to be there full time, IMHO you need a manager and he is most likely going to need more than minimum wage. You will need to find that special someone who cares as much as you do about your business.
Environmental - My experience is it is just a Phase 1 inspection that is required. If you have sewer hook up you should be fine and consider yourself lucky as long as your sewer fees are not that high. If you are forced to recycle your water, yes your water and sewer fees may be less, but reclaim is not a easy road.
Good luck - I believe the industry is strong but I don't have a crystal ball.

 

[pgrzes]

All I can say about this post is HAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHA!!!! Flame on!! I love to see that some of us active carwash OWNERS are finally getting tired of the better then now, condescending remarks that seem to follow one RJR!!! You talk the talk, but we walk the walk. We use our own $$$$$ And do what we can to make it work. I can write about making millions, but being able to do it is another thing. Go ahead buddy strike back if you like!!!! HAHAHAHAHAHAHAH.

 

[rph9168]

Sam, I think you need to get in touch with Dewey9876. He seems to be in a situation similar to what you are looking at and probably would be a good source for information that you are looking for.

 

[Sam]

Thanks Dewey, you hit the nail on the head. This place up in NH, pays 10.00 as well to the attendants. I'm guessing that a manager might need 15.00?? And that salary I'm going to bake into the numbers. I'm also going to factor in higher repair costs because I know I won't be able to do all the repairs. I'll just endeavor to learn as I go and hopefully trim the costs down over time as I pick things up. I likely wouldn't change a thing in terms of staffing for all of the reasons you mentioned - I need someone to open the place up if another doesn't make it in and I'm tied up somewhere else. I just wanted to find out if there were options to further automate a tunnel (and I see that there are) just in case the employee issues and the wage increases become too much.

Funny you should mention stagnant prices, I didn't mention it but that issue was the main reason I harped on the potential min. wage increase. The seller told me that he and his competitors have been sitting on their hands for the last few years, no one is raising their prices. It got me thinking that if the wage goes up a dollar a year until it reaches 15 (potentially) I'm going to be eating that cost just as the seller has been eating other increases in expenses. At some point, I would hope that the rubber will hit the road and operators will pass along some or all of the increase or further automate. Now as someone mentioned in another post, a tunnel car wash should be able to handle (i.e. absorb) the increase and it seems like it can but starting out by eating expense increases is less than ideal when I'm laboring under some serious debt. Seems that there is some real price sensitivity in this business (at least in our area). I'm sure many operators/consultants here will say you should always increase prices to cover increases in expenses but this particular seller and his particular competitors haven't and that's all there is to it. Hopefully, that will change but I need to think about it not changing.

Why do you think prices are stagnant? Does it have anything to do with my pet theory? That tunnels are being squeezed from a pricing standpoint by lower cost IBAs? In my neighborhood, I tend to bypass the lower priced touchless IBA and go the exterior only tunnel because I don't care for the quality of the wash of the touchless. But on the other side of town, I'll gladly bypass that exterior tunnel and go to a friction-style IBA which seems to provide a great wash and is $3 cheaper. Plus if it's at night, I don't say "well, I guess I have to wait until tomorrow when the tunnel is open." And if the nearby touchless converted to friction or had one of each, that tunnel would probably lose a big portion of my business. This poor, dead horse that I keep beating....sorry everyone. I'm contemplating another post that will likely make many eyes roll but the future of the industry in general and the exterior tunnel in particular is weighing heavily on my mind given the long term debt this deal will entail...

Curious, did you install the reclaim system or was it already there? Someone on the board and a distributor I spoke with said they're not that expensive (in the scheme of things) and you can make your money back over time anyway. But you say it's "not an easy road." Why is that?

 

[Sam]

"Sorry if my passion for carwash doesn’t carry over to social norms."

Sure, Bob, no problem.

"I’m always available to match wits about carwash. It’s a good brain exercise."

Yeah, me too. If I end up pursuing the deal further and/or buying the place, I'm sure you'll see me around.

 

[robert roman]

“Go ahead buddy strike back if you like…”

Nothing to strike back as you put it.

If I come across as condescending, the reason is I don’t misrepresent facts.

It would not make sense to come here and suggest something that is obviously false.

So, why not simply ignore the answer. That’s what I do.

 

[dewey9876]

Sam
I am 100% reclaim, closed loop = hard road! Again if you have a sewer hook up that is great. That means you don't need to be closed loop. It will be much easier for you. Reclaim can be expensive but again it depends on how much you want or are forced to reclaim.

As far as prices..We do not have many IBAs in my area so I don't think it is that. I think it is many things. I hear "well in Florida I can have my car washed, vacuumed, windows for $10.00!" (I am $11.00 for my base exterior wash in Mass) I can't pay $7.00/hour like they can in Florida, They don't have to heat there tunnels like I do, they probably don't have reclaim expenses like I do, etc... The new express exteriors @ 3/4/5.00 per wash and free Vacs don't help either. Some washes in this area have been around for ever, so they are probably paid off, they don't have a mortgage like I do so they don't need to charge as much. Another thing I am guilty of is when I make price changes it is for .50 or usually 1.00 per wash. Why not go up more often in smaller increments? Laziness? Don't want to deal with change? yes to both for me! hahaha! Because washing is a luxury to most people I think we are afraid to cross that line where all of a sudden people say, do I need this? or do I need to do this as often? I wish I had the answers!

 

[Sam]

Thanks again. I did some research on the closed loop reclaim. I understand why it's such an issue. Glad to know the IBAs are not a major issue for you.