new IBA help

[npc]

Hi everyone, long time reader and just decided to join today. I always enjoy the honest feedback (and sometimes funny) that each member contributes and it has helped me in the past.
I have a 4 bay SS that I keep clean, all equipment in 100% condition, air shamees, well lit, etc etc. It has been a small side business for the past 7 yrs. Revenue has remained steady even during the downturn and has increased yr over yr the past 2 yrs. I've never really taken income from the business, just paid down debt and tried to make improvements.

However, I am behind the times in several areas. No CC acceptance, still at 1.50 for 4 min (everyone within 40 miles is the same) and no IBA.
Here is where I need help (actually two items)
a) To add an IBA one bay will need some major work. Raise roof, build out pump room, electrical and plumbing upgrades. I was 99% sold on a laser 360 but then ran across the MNEX22 from Istobal. I know nothing about this machine but it would give the customer the choice between a touchless, friction or hybrid. Looks like an interesting system but they are an unknown in my market and not one within 3 hours.
Early analysis estimates 9K cars in yr1 up to 12k cars in yr 4. Have no clue if this is accurate since this was done by PDQ.
I do know I have 18K cars a day pass by going less than 35mph. One other 4 bay SS in my town of 5k and 2 IBA's about 3 miles away. I think either way with the prep work and actual equip I looking at 200K.


b) should I be an early adopter and move the SS price up to $2 for 5min or some other change that reflects a higher cost per minute? I've come to the point where I want to produce an decentl income from this property and I know (at least think) that these changes will need to take place for this to happen.

Fire away.
Thanks

 

[robert roman]

“I have a 4 bay SS… I've never really taken income from the business, just paid down debt and tried to make improvements.”

“To add an IBA one bay will need some major work.”

“….I do know I have 18K cars a day pass by…..”

“….my town of 5k and 2 IBA's about 3 miles away”

“I've come to the point where I want to produce an decentl income from this property….”

“Fire away. Thanks”

Based on total potential sales, I believe your market might support about $1.67 million in assets. This is replacement cost new for building and equipment and market value of real estate.

You know how much you have tied up in your property (i.e. $500K). Estimate how much other self-serve with two in-bays has tied up (i.e. $700K).

$1.67 million – ($500K + $700K) = $470,000

This is an estimate of the amount of additional assets the market could support.

So, it’s not $200K capital investment that’s most important but rather what is the asset’s capability to produce revenue.

For example, I figure the in-bay would need to be capable of producing a 22 car hour to achieve maximum revenue at sales volume of 22,500.

Less the hourly capacity the less chance of achieving sales volume potential.

 

[npc]

Thank you. Very good information.

 

[Jeff_L]

Raising Prices - if you're the same as everyone else on price/time, what would be your justification to raise them? You should have a differentiator that justifies the price increase. Otherwise, what are you going to say to the customer who asks why? Raising prices because of costs increase works for Starbucks, but in our industry I don't think it does.

IBA - make sure to choose one that your trusted distributor supports. There is so much technology in them these days that you just can't take a wrench and beat on it. I just installed a PDQ ProTouch ICON and am installing a 360 next week. One of the reasons I went with them was because my distributor is minutes away.

 

[mac]

Have you thought of just talking to the other wash operators and have all of you raise the price? Wouldn't hurt and you might make a friend.

 

[robert roman]

“Raising Prices - if you're the same as everyone else on price/time, what would be your justification to raise them?”

Changing from four wand-bays to three plus one format changes the focus of business from self-serve to automatic washing.

Less supply means higher demand for wands so raise price.

“IBA - make sure to choose one that your trusted distributor supports.”

Although good advice, dealer would also need to supply something capable of producing a 22 car hour to achieve maximum revenue at sales volume of 22,500.

Also, new help, mentioned desire for friction/hybrid machine.

Coincidently, it is this type of machine that can approach 22 cars an hour as well as produce hand-finished qualities to reach an average of $10 a wash like foam wash material, wheel attachment, contour drying and full complement of extra-pay profit centers.

 

[npc]

https://istobalusa.com/M-NEX_22.php

This is the IBA. There is one 3 hrs away that I can visit. Looks like a good product but I have service concerns since so few in the area. But I could service both (friction and touchless)customers with one unit.
With this change I thought it would be a good time to raise SS cost per minute. I've owned for 7 yrs and like it is repeated here often we are one of the few services that has few if any price increase . We have absorbed all cost increases. As they say,it is not who writes the check but who bears the cost and SS owners have taken this cost. It can't be a business model that will last.

 

[tdlconceptsllc]

Man just get a Washworld Razer and be done with it. made out of stainless very reliable vs a PDQ 360 makes there plastic machine look cheap way better customer service than PDQ, straight up no BS and no I don't work for Washworld

 

[pgrzes]

I put in a Washworld High Velocity a year ago and it has been the best move I have made in 9 years in business!! Great company to deal with, excellent tech support. I had a lingering 45' EE that was draining me, since the change my business has increased 25% 1st year, and this year business is up over 50%. Now we have had a lot of salt this winter and I have also upgraded self serve equip. and vacuums. Things are now more dependable, I dont have to worry about someone calling in sick and aside from me being so picky about not wanting to lose out on any cars the last year has been much less stress then before. Many people on the forum told me I was crazy for going this direction, but I had to adjust for what my area was giving me, it has been working well for 14 months!!!

 

[MEP001]

Have you thought of just talking to the other wash operators and have all of you raise the price? Wouldn't hurt and you might make a friend.

That's very illegal.

 

[JustClean]

Don't forget: With a brush machine (depending on your customer base) you have to monitor what cars go in. Having a 3 brush setup, be aware of big antennas, pickup trays or sharp bits and pieces that cannot be detected by brush resistance and could potentially damage your brush. Also with the Istobal machine you will have rails & guide rails on the floor that makes it difficult for some people to drive in. I like the setup of http://www.dscarwash.com/products/in-bay-automatics/iq-soft-touch or the PDQ Tandem (unfortunately it only has 1 sidebrush).

The other thing to consider is those hardcore touchfree customers might drive away the moment they see brushes. You would need BIG signs.

If it's to be unmonitored I would only go touchfree.

 

[Buzzie8]

I just sold my last wash. I am completely convinced that I would still be in the business if I would have bought more reliable equipment for my IBA's. I am not here to throw any mfg's "under the bus". Just make sure that you do a bunch of research in this area. I enjoyed the business but was not ready to reinvest another $250K and another ten years into it. I think the ten years I spent in the business would have been a completely better experience if my equipment was more reliable. I would spend days looking at the moving parts and overall engineering before I committed to any machine or MFG. Try to get sense of the overall thought and company's behind the machine. Also, don't hesitate to make visits to their mfg plants. Talk to as many other owners in other non-competing markets about their satisfaction because adding IBA's will be a game changer for you in both greater revenues and customer complaints and maintenance. It sounds like your location can easily support the investment.

 

[npc]

That is a good point. I'm sure the current customer base is not familiar with a hybrid setup.

 

[Ric]

Man just get a Washworld Razer and be done with it. made out of stainless very reliable vs a PDQ 360 makes there plastic machine look cheap way better customer service than PDQ, straight up no BS and no I don't work for Washworld

I agree. We own equipment from both companies.

 

[tdlconceptsllc]

MEP001 is that illegal I did not know that, why is that like Monopoly or something by law.

 

[MEP001]

It's called price-fixing.

 

[Greg Pack]

MEP001 is that illegal I did not know that, why is that like Monopoly or something by law.

Violates the Sherman anti-trust act. Even at association meetings where operators are from different markets, discussion of menu prices is highly discouraged. That may be overkill, but as I understand it's a definite no-no in a given market area. Maybe our resident J.D. can chime in.

 

[rph9168]

While all this may be true I have never heard or seen any legal problems occur from "price fixing" by carwashers. In reality most pricing is set by the better washes in town. In most areas pricing is almost the same among the washes.

 

[MEP001]

While all this may be true I have never heard or seen any legal problems occur from "price fixing" by carwashers.

It's still illegal.

 

[rph9168]

I never said it was legal but that doesn't mean it doesn't happen or that the law is enforced. The only price fixing charges I have ever seen involved large companies in large market areas. Even then it is difficult to enforce with limited success when prosecuted. I am not advocating price fixing. I am simply stating facts as I know them. To say or believe it never happens would be naïve. Personally I think there is de facto price fixing in most areas anyway.

I believe you are setting your customer base when you establish pricing. If you are on the lower end of the pricing spectrum you will attract bargain hunters that are more interested in cost over performance. On the higher end you tend to get people that are more performance oriented and are willing to pay more for better results. It is difficult if not almost impossible to set pricing that will attract both types. Bottom line - provide the best service and possible results at a price you can live with and customers are willing to pay. It may involve a little trial and error but is not rocket science.