under pressure
Member
so why do they keep building new car washes right next to existing car washes, when the existing market is already overbuilt?
new car washes
- Thread starter under pressure
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Reds
Member
Because having a brain is not a prerequisite for having money.
wendy's wash
Member
lots of reasons
Well there are alot of reasons. (1) The builders don't care if the wash makes money, just to pay the loan or not. They got their money up front. Some builders will make you a projection of the income you will make, just looks so good to the bank. They will also sell you equipment that you really don't need. Over size spot free holding tank, added booster pump, ect. (2) Lets don't forget the new owners that have more money than common sence. All they see is the dollars they are going to make. Mind set of, - all the customers will come to my place and not to the old ones. (3) There is a wash listed by a realitor now that says - better than Vegas. Just stop by and collect your money. Once a wash has proven it can't make the bills and the owner finally gives up. The listing agent says all these good things and no where are the truths. Low income, the repairs that are needed, the cost for supplies, vandels. They list, owner looking to other ventures, owner retiring, divorcing. great wash and will not last long. Everyone just wants to own a wash that needs them only to go and collect the money. Sounds so good.
Well there are alot of reasons. (1) The builders don't care if the wash makes money, just to pay the loan or not. They got their money up front. Some builders will make you a projection of the income you will make, just looks so good to the bank. They will also sell you equipment that you really don't need. Over size spot free holding tank, added booster pump, ect. (2) Lets don't forget the new owners that have more money than common sence. All they see is the dollars they are going to make. Mind set of, - all the customers will come to my place and not to the old ones. (3) There is a wash listed by a realitor now that says - better than Vegas. Just stop by and collect your money. Once a wash has proven it can't make the bills and the owner finally gives up. The listing agent says all these good things and no where are the truths. Low income, the repairs that are needed, the cost for supplies, vandels. They list, owner looking to other ventures, owner retiring, divorcing. great wash and will not last long. Everyone just wants to own a wash that needs them only to go and collect the money. Sounds so good.
washnvac
Well-known member
Where is that wash that you only need to collect the money from? I will trade my four, for that one!!
The real reason you see this so much is that new investors rarely find this site. In my conversations with these people, I always give this place as the place to start for basic good info. My competitors jsut smell blood.
Danny
Member
One that I have heard more than once from new owners "this has to be a great business...look at how many car washes there are". It kills me sometimes
pitzerwm
Active member
I hear that from non-business people. I also hear "Look at him/her they must be making a killing in that business" My response, is "I'll need to see the books to know that". In many things of life what you see is not really reality.
It always amazes me how someone who either has access to so much money or credit can be so stupid when it comes to building a wash. In many cases they must not do their due diligence before they make their decision to build.
At least for now I think this problem will slow down. Many are concerned about the future of the economy and in some cases their jobs and own finanacial future. Banks are getting tighter and tighter. Zoning and permitting is tougher than ever in many areas due to water concerns. Oil companies are being much more cautious about including a wash on a site. In many cases they are closing more washes than they are opening.
I even think the Express Exterior growth will begin to at least level off if not decline. With volumes down we are seeing some unbelieveable pricing in our area to attract business. Last week I got my truck washed in an EE for $1. No way they aren't losing money on that.
All that being said, a car wash, as most of you know, can still be a good business if you have a good location and run it properly.
At least for now I think this problem will slow down. Many are concerned about the future of the economy and in some cases their jobs and own finanacial future. Banks are getting tighter and tighter. Zoning and permitting is tougher than ever in many areas due to water concerns. Oil companies are being much more cautious about including a wash on a site. In many cases they are closing more washes than they are opening.
I even think the Express Exterior growth will begin to at least level off if not decline. With volumes down we are seeing some unbelieveable pricing in our area to attract business. Last week I got my truck washed in an EE for $1. No way they aren't losing money on that.
All that being said, a car wash, as most of you know, can still be a good business if you have a good location and run it properly.
smokun
Consultant - Rainmaker
The Question Was A Rhetorical One, Right?
There is a certain logic in locating close to your competition... in an already well-served marketplace.
Look at Walgreens and CVS. Or gas stations on all four corners of many intersections. The statistics support that location dynamic.
Entrepreneurs often go into a business because they are willing to wager that their plan is better. Frequently ill-advised, many who venture into carwashing feel as though they've done their homework... and are willing to go against the odds because their vision makes more sense. Seldom do they ignore the option of trying to purchase an existing carwash... before deciding that they have the plan that will ultimately prevail.
Entrepreneurs, by nature, are willing to take risks, and the ego that drives them to follow the beat of their own drum... sometimes winds up becoming their nemesis. Yet, on balance, most entrepreneurs are made up of the stuff that make businesses move forward with a fresh new spirit of confidence.
The cycle of business life depends on this form of advancement, followed by a shaking out of the great pretenders... and enabling those worthy of sustaining their growth and eventual success to advance and raise the bar of achievement.
Natural selection is the wellspring of life... and competition is the lifeblood of business development. Truth be told, there are plenty of carwash businesses that are resting on their laurels... and offering lackluster service. Or, worse yet, they are simply taking up space that is better served by others. I think Charles Darwin called it "the survival of the fittest". The natural order of things, I suppose.
So, rather than lament, fix your sights on continuous improvement. Focus on better serving your customers... individually; one at a time.
-Steve
There is a certain logic in locating close to your competition... in an already well-served marketplace.
Look at Walgreens and CVS. Or gas stations on all four corners of many intersections. The statistics support that location dynamic. Entrepreneurs often go into a business because they are willing to wager that their plan is better. Frequently ill-advised, many who venture into carwashing feel as though they've done their homework... and are willing to go against the odds because their vision makes more sense. Seldom do they ignore the option of trying to purchase an existing carwash... before deciding that they have the plan that will ultimately prevail.
Entrepreneurs, by nature, are willing to take risks, and the ego that drives them to follow the beat of their own drum... sometimes winds up becoming their nemesis. Yet, on balance, most entrepreneurs are made up of the stuff that make businesses move forward with a fresh new spirit of confidence.
The cycle of business life depends on this form of advancement, followed by a shaking out of the great pretenders... and enabling those worthy of sustaining their growth and eventual success to advance and raise the bar of achievement.
Natural selection is the wellspring of life... and competition is the lifeblood of business development. Truth be told, there are plenty of carwash businesses that are resting on their laurels... and offering lackluster service. Or, worse yet, they are simply taking up space that is better served by others. I think Charles Darwin called it "the survival of the fittest". The natural order of things, I suppose.
So, rather than lament, fix your sights on continuous improvement. Focus on better serving your customers... individually; one at a time.
-Steve
While I have to agree with most of S Okun's points, it is not a true representation when comparing Walgreens and CVS to one wash and another in close proximity.
The bulk of our income in the wash detail industry is from discretionary/disposable income. The pharmacy industry has an ever increasing population that NEED to get their prescriptions.
What we/you need to make sure of is that your plan is working very well, no reason for another to get too close to compete as you may win either way.
If you can take care of your customers by providing exception service, wash/detail quality and fair pricing, that plan will work.
A long time carwasher once told me "I don't give a #@% about the competition, they can worry about me!" 50+ years in the Biz and 6 locations, all paid for AND profitable!
Be Well
The bulk of our income in the wash detail industry is from discretionary/disposable income. The pharmacy industry has an ever increasing population that NEED to get their prescriptions.
What we/you need to make sure of is that your plan is working very well, no reason for another to get too close to compete as you may win either way.
If you can take care of your customers by providing exception service, wash/detail quality and fair pricing, that plan will work.
A long time carwasher once told me "I don't give a #@% about the competition, they can worry about me!" 50+ years in the Biz and 6 locations, all paid for AND profitable!
Be Well
If I had a nickel for every new car wash owner I have met had a better way to operate or was planning on franchising before even building the first one I could have retired a long time ago. For some reason, on the surface, car washing looks rather simple and it attracts people with money that see it as an easy way to make more money or their way out of the rat race of working for someone else.
Steve makes some very valid points. I am not sure that the analogy with oil companies or drug stores building close to each other is really the same. In most cases they have already built a brand loyalty. By building in close proximity of their competition they are attempting to maintain their customer's loyalty rather than tempting them to switch due to a more convenient location for their competitor.
I agree that in some cases, building a wash close to another sometimes makes business sense. I remember a tunnel that built two blocks away from one of the busiest tunnels in Northern California. On many days the line extended out on the street. After they built they made money just handling the overflow. I have also seen many cases where a wash was allowed to become a dump where a new wash in the area was successful by simply being a nicer place to go to.
In some ways it is a real "Catch 22". If you really run a good wash it might make others feel that they can do it better and build close by. On the other hand, if you are satisfied where you are and don't work to continually improve you may give the impression to others that they can compete successfully.
I agree that continuous improvement and attention to detail can go a long way to continued success. The only thing you can really control is how well you do business, not prevent others from competing.
Steve makes some very valid points. I am not sure that the analogy with oil companies or drug stores building close to each other is really the same. In most cases they have already built a brand loyalty. By building in close proximity of their competition they are attempting to maintain their customer's loyalty rather than tempting them to switch due to a more convenient location for their competitor.
I agree that in some cases, building a wash close to another sometimes makes business sense. I remember a tunnel that built two blocks away from one of the busiest tunnels in Northern California. On many days the line extended out on the street. After they built they made money just handling the overflow. I have also seen many cases where a wash was allowed to become a dump where a new wash in the area was successful by simply being a nicer place to go to.
In some ways it is a real "Catch 22". If you really run a good wash it might make others feel that they can do it better and build close by. On the other hand, if you are satisfied where you are and don't work to continually improve you may give the impression to others that they can compete successfully.
I agree that continuous improvement and attention to detail can go a long way to continued success. The only thing you can really control is how well you do business, not prevent others from competing.
Another carwash owner
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We are often asked if the car wash business is profitable, and I always tell them the truth ... If we were making money hand-over-fist, my wife and I wouldn't be the only ones working the business. Anyone thinking of competing with a successful carwash less than 5 miles is taking a big chance that its carwash business will do just as well. In fact, they "may" only gain 50% of the business which would only serve to hurt both businesses. If one finds their own location, they will have a better chance of being successful.
ANO
ANO
smokun
Consultant - Rainmaker
Please Don't Misunderstand...
My comment about proximity site consideration as applied with other retail operations was merely identifying a well established marketing theory. It, along with a lot of other stuff is what makes up a strategic marketing plan.
When a client asks me to conduct a competitive market analysis and assess a specific marketplace, with his thoughts of picking off a weak competitor doing a substandard job, I caution against any such thought with a very sobering consideration.
Yes, the competition is weak, and a fresh new operation that provides good service will conditionally have a good chance at success... as long as the current competition doesn't change hands.
Maybe the new carwash will force the other out of business, and the facility will be sold to a different type of business. But, what if the old carwash is sold to an energetic well-funded owner who revitalizes that carwash to a formidable competitor? Is the marketplace big enough for both to not only survive, but thrive?
(continued)
My comment about proximity site consideration as applied with other retail operations was merely identifying a well established marketing theory. It, along with a lot of other stuff is what makes up a strategic marketing plan.
When a client asks me to conduct a competitive market analysis and assess a specific marketplace, with his thoughts of picking off a weak competitor doing a substandard job, I caution against any such thought with a very sobering consideration.
Yes, the competition is weak, and a fresh new operation that provides good service will conditionally have a good chance at success... as long as the current competition doesn't change hands.
Maybe the new carwash will force the other out of business, and the facility will be sold to a different type of business. But, what if the old carwash is sold to an energetic well-funded owner who revitalizes that carwash to a formidable competitor? Is the marketplace big enough for both to not only survive, but thrive?
(continued)
smokun
Consultant - Rainmaker
Nobody likes a spoiler, which is why most investors would walk away... or tender an offer to buy the existing carwash, if there was only enough business for one to thrive. The old business axiom: The best competition... is no competition... is a nice result, but there are no guarantees.
Yet sadly, many carwash operations seemingly stuck in yesterday's world, are barely making a living. Not really successful, but rather merely hanging on. What was once a business... has turned into a job with dim prospects.
This is a situation where competition provides a good shaking out of the marketplace. It's inevitable in most marketplaces, and is often a healthy thing. Wiser operators see the unavoidable coming, and use all of their skills and resources to improve and become stronger. Otherwise, the constant drain will kill any business.
In this challenging economy, some may choose to hunker down and hope for the best. Others will focus on doing something pro-active to fortify their business and grow new opportunities. Wishing that things get better is for fairy tales. Instead, I suggest that many operators need to re-invent their operations... and make them exciting again. Refocus on the back-to-basics philosophy of making "serving the customer" first and foremost. That means engaging your customers... and asking what else can be done to better serve their individual needs. More diversified services on an as-needed choice basis. That kind of resiliency provides for healthy growth. I call it TOTAL-SERVICE CARWASHING... because it is all-inclusive; whatever it needs to be in a given marketplace.
A few well-intentioned thoughts...
-Steve
Yet sadly, many carwash operations seemingly stuck in yesterday's world, are barely making a living. Not really successful, but rather merely hanging on. What was once a business... has turned into a job with dim prospects.
This is a situation where competition provides a good shaking out of the marketplace. It's inevitable in most marketplaces, and is often a healthy thing. Wiser operators see the unavoidable coming, and use all of their skills and resources to improve and become stronger. Otherwise, the constant drain will kill any business.
In this challenging economy, some may choose to hunker down and hope for the best. Others will focus on doing something pro-active to fortify their business and grow new opportunities. Wishing that things get better is for fairy tales. Instead, I suggest that many operators need to re-invent their operations... and make them exciting again. Refocus on the back-to-basics philosophy of making "serving the customer" first and foremost. That means engaging your customers... and asking what else can be done to better serve their individual needs. More diversified services on an as-needed choice basis. That kind of resiliency provides for healthy growth. I call it TOTAL-SERVICE CARWASHING... because it is all-inclusive; whatever it needs to be in a given marketplace.
A few well-intentioned thoughts...
-Steve