New Owner/New Build

[GGGG]

Demographic
2.5M MSA
250K within 5 miles
$1M land price/1.75 acres/but tight
Building envelope 335’x75’
20k cars/day traffic
ingress/egress 4-lane undivided w/turn lane
400’ from 4-way intersection
Nearest tunnel 3.5 miles w/ $25 avg wash
Four full seasons

Planning
Owner office on-site full time
SBA 504/7a combo
120+ ft tunnel with vacuums
Current bias is Sonny’s
Hand wipedown at finish
12 hrs/day, 6 days/wk
30 cars/hr
20 days/month
$20 mean ticket price
$3M total price for build

My stupidity/ignorance/assumptions
How many employees @ what rate?
Technician employee onsite?
Chemical monthly costs?
Insurance premiums?
Utilities cost?
How many service days/year for maintenance?

Plenty of Known Unknowns…but I‘m certain there is plenty I’m missing.

Any/all advice would be helpful. Thick skin, so fire away.

Thank you in advance.

 

[GGGG]

First Post. Seeing it’s under IBA…I apologize if this was posted in the wrong forum.

 

[I.B. Washincars]

I'll move it.

 

[OurTown]

Location can play some into your cost questions. Why only open 6 days? How did you find the average ticket of the competitor? It seems a bit high to me but then again location plays into that. Hand finish drying can be a good way to make your wash standout but once you start that then you can't stop later without pushback. That of course adds labor. Is your $3M cost including the land? If so then $2M for equipment, site work and building seems a bit low. Sounds like a decent location though. How involved will you be in the daily operation?

 

[GGGG]

Location can play some into your cost questions. Why only open 6 days? How did you find the average ticket of the competitor? It seems a bit high to me but then again location plays into that. Hand finish drying can be a good way to make your wash standout but once you start that then you can't stop later without pushback. That of course adds labor. Is your $3M cost including the land? If so then $2M for equipment, site work and building seems a bit low. Sounds like a decent location though. How involved will you be in the daily operation?

No reason besides overwork…

I currently use competitor on a weekly basis over past 5 years.

Agree on hand buff…but comp does it and people seem to expect at that px…

$3M includes land…and yes, I want that to be true! Guessing it’ll be closer to 3.5-4…

Very involved. Planning on being onsite all day, every day.

 

[Waxman]

what is your experience in the car wash business, other than being a customer? i think a 3.5-$4MM project for a new tunnel wash with the labor expense and management as well as all those moving parts is too much for someone with little or no experience to handle. This could be a huge financial disaster for you if you are able to get financed.

Please tell us more about you; your mechanical and technical capabilities, your skills, current job, your skills managing people, your customer service experience, etc.

 

[GGGG]

what is your experience in the car wash business, other than being a customer? i think a 3.5-$4MM project for a new tunnel wash with the labor expense and management as well as all those moving parts is too much for someone with little or no experience to handle. This could be a huge financial disaster for you if you are able to get financed.

Please tell us more about you; your mechanical and technical capabilities, your skills, current job, your skills managing people, your customer service experience, etc.

Happy to…and I agree…which is why I’m here

50 y/o
20+ year business owner
Financial Advisory
Bought/integrated multiple businesses
Small/Medium-sized team management
Financial Advisory is almost exclusively differentiated by service-level and execution. So, quite a bit relative to customer service/experience.

My weak areas are absolutely technical/mechanical; ergo my question on technical hires.

Selling my current advisory business and wanting do something challenging, different and profitable with a reasonable growth curve. Your fears, however, are apt. I’m worried about precisely the same thing: inexperience and capital structure.

Hope that answered your questions.

Thanks

 

[OurTown]

Over two years ago a large car wash lender told me that the average Express Exterior wash coming across his desk was in the $4.5M range including land. Have you received any estimated pricing from contractors or equipment distributors? One thing we ran into early on is that lenders do not want to fund these projects without car wash management experience unless you put down substantial money. This type of car wash model is getting very competitive and some players have deep corporate pockets. Be careful out there.

 

[GGGG]

Over two years ago a large car wash lender told me that the average Express Exterior wash coming across his desk was in the $4.5M range including land. Have you received any estimated pricing from contractors or equipment distributors? One thing we ran into early on is that lenders do not want to fund these projects without car wash management experience unless you put down substantial money. This type of car wash model is getting very competitive and some players have deep corporate pockets. Be careful out there.

Excellent feedback. Have a call with an experienced distributor later this afternoon, actually. Couldn’t agree more; experience + saturation + unlimited budgets = potential new guy beating…

Very cognizant of the elevated LIFO danger. Will definitely be cautious.

 

[Axxlrod]

I have lots of thoughts...

Population is good
Traffic count is low.
Has Sonny's done a site layout for you yet? Or a site analysis?
75' is not a lot to work with.
Is this going to be an express model?
There is not an express wash in the world that has a $25 ticket average. Use $15 for both the competition and your pro forma.
Do not do towel dry at the end. Add more blowers instead.
Operate 7 days per week; you're not Chik-Fil-A
Your lack of experience will be a problem for the bank. They don't like to lend millions to people who don't know what they're doing.

 

[GGGG]

I have lots of thoughts...

Population is good
Traffic count is low.
Has Sonny's done a site layout for you yet? Or a site analysis?
75' is not a lot to work with.
Is this going to be an express model?
There is not an express wash in the world that has a $25 ticket average. Use $15 for both the competition and your pro forma.
Do not do towel dry at the end. Add more blowers instead.
Operate 7 days per week; you're not Chik-Fil-A
Your lack of experience will be a problem for the bank. They don't like to lend millions to people who don't know what they're doing.

Not married to Express. Batting around 4-6 IBA w/free vacs as well

My apologies….so stupid…335x120…75 is the offset.
No layout as yet.
Fair enough on the ticket. Comp is true Full Service, frankly.
Hear you on the towels.
Ha!
Very true.

Thank you for this.

 

[Axxlrod]

$25 ticket is absolutely doable for a full-serve; in fact it might be considered a little low. But you an't really compare different types of washes; apples and bananas.

To do 6 IBAs you'd need a direct connection to one of the Great Lakes to feed all of them.

 

[GGGG]

$25 ticket is absolutely doable for a full-serve; in fact it might be considered a little low. But you an't really compare different types of washes; apples and bananas.

To do 6 IBAs you'd need a direct connection to one of the Great Lakes to feed all of them.

Hahahaha….

Absolutely right, different animals.

 

[Roz]

With that much land I would consider making a 4 to 6 IBA wash. You can have both touch free and soft cloth. Can handle 500 cars a day or more with four IBA and compete with express tunnels. You can have a Dencar paystation that allows you to offer memberships and vac usage. I think Executive Laser Wash in IA has this model. You are open 24-7, and just need one manager with some tech skills and good common sense to help you run the place. Probably can do the entire build and outfitting for the $3M (including land).

 

[JaySingh]

I probably have less experience than those on here but I must say in 1 years time we closed 4 washes with the SBA.
23 SS bays, 1 IBA, 1 Express, 3 Dog washes.
In Escrow to purchase another 13 SS Bays and another Express by end of February

We are now planning a similar move with ground up development with SS + Tunnel.

1) Don't sleep on the SS
-SS is an underrated business and if you can fit Self Serves onto a lot with a Tunnel or IBA, it's a killer combo.
-SS bays serve a diverse crowd and if you are running an IBA or a Tunnel already on the lot, it uses the same equipment and easier to manage

2) Go Touchless in a market full of Soft Touch Tunnels
-Be different
-Some people don't want brushes
-Open 24 hours
-Less labor intensive than a Tunnel

3) Marketing works
-We have increased prices and grown memberships at our Express wash with aggressive marketing
-Within 5 miles we have at least 8 Tunnels around us


My stupidity/ignorance/assumptions
How many employees @ what rate?
- Our Tunnels require Minimum 2 employees all day, 3 -4 employees on weekends
- We pay just above minimum wage
- The more trained and experienced employees are paid 1-2 dollars more per hour

Technician employee onsite?
- We train staff to take care of smaller repairs and maintenance
- We have car wash techs (1099 contractors) on standby, they charge us $150 per hour
- We keep a lot of spare parts on site ready to go for easy swap outs to minimize down time
- We do repairs and maintenance early morning or after hours.

Chemical monthly costs?
-We are at about 1500 per month on our Tunnel

Insurance premiums?
-Our SS+Tunnel is at 12,000 per year
-You will have a higher premium due to lack of experience in car washes, number of employees, number of cars washed, and sales

Utilities cost?
-We are at about 10% of sales per month
-Electricity is our biggest cost, then water

How many service days/year for maintenance?
-We have our techs services our end of month routinely
-We do pre-emptive repairs at least once monthly
-We always have something break once to twice monthly (small or big)

 

[GGGG]

I probably have less experience than those on here but I must say in 1 years time we closed 4 washes with the SBA.
23 SS bays, 1 IBA, 1 Express, 3 Dog washes.
In Escrow to purchase another 13 SS Bays and another Express by end of February

We are now planning a similar move with ground up development with SS + Tunnel.

1) Don't sleep on the SS
-SS is an underrated business and if you can fit Self Serves onto a lot with a Tunnel or IBA, it's a killer combo.
-SS bays serve a diverse crowd and if you are running an IBA or a Tunnel already on the lot, it uses the same equipment and easier to manage

2) Go Touchless in a market full of Soft Touch Tunnels
-Be different
-Some people don't want brushes
-Open 24 hours
-Less labor intensive than a Tunnel

3) Marketing works
-We have increased prices and grown memberships at our Express wash with aggressive marketing
-Within 5 miles we have at least 8 Tunnels around us


My stupidity/ignorance/assumptions
How many employees @ what rate?
- Our Tunnels require Minimum 2 employees all day, 3 -4 employees on weekends
- We pay just above minimum wage
- The more trained and experienced employees are paid 1-2 dollars more per hour

Technician employee onsite?
- We train staff to take care of smaller repairs and maintenance
- We have car wash techs (1099 contractors) on standby, they charge us $150 per hour
- We keep a lot of spare parts on site ready to go for easy swap outs to minimize down time
- We do repairs and maintenance early morning or after hours.

Chemical monthly costs?
-We are at about 1500 per month on our Tunnel

Insurance premiums?
-Our SS+Tunnel is at 12,000 per year
-You will have a higher premium due to lack of experience in car washes, number of employees, number of cars washed, and sales

Utilities cost?
-We are at about 10% of sales per month
-Electricity is our biggest cost, then water

How many service days/year for maintenance?
-We have our techs services our end of month routinely
-We do pre-emptive repairs at least once monthly
-We always have something break once to twice monthly (small or big)

Incredibly helpful. Thank you

 

[OurTown]

I probably have less experience than those on here but I must say in 1 years time we closed 4 washes with the SBA.
23 SS bays, 1 IBA, 1 Express, 3 Dog washes.
In Escrow to purchase another 13 SS Bays and another Express by end of February

We are now planning a similar move with ground up development with SS + Tunnel.

1) Don't sleep on the SS
-SS is an underrated business and if you can fit Self Serves onto a lot with a Tunnel or IBA, it's a killer combo.
-SS bays serve a diverse crowd and if you are running an IBA or a Tunnel already on the lot, it uses the same equipment and easier to manage

2) Go Touchless in a market full of Soft Touch Tunnels
-Be different
-Some people don't want brushes
-Open 24 hours
-Less labor intensive than a Tunnel

3) Marketing works
-We have increased prices and grown memberships at our Express wash with aggressive marketing
-Within 5 miles we have at least 8 Tunnels around us


My stupidity/ignorance/assumptions
How many employees @ what rate?
- Our Tunnels require Minimum 2 employees all day, 3 -4 employees on weekends
- We pay just above minimum wage
- The more trained and experienced employees are paid 1-2 dollars more per hour

How do you find and keep good people paying near minimum wage? Are you in a state where the minimum wage is much higher than the Federal $7.25?

 

[water guy]

I probably have less experience than those on here but I must say in 1 years time we closed 4 washes with the SBA.
23 SS bays, 1 IBA, 1 Express, 3 Dog washes.
In Escrow to purchase another 13 SS Bays and another Express by end of February

We are now planning a similar move with ground up development with SS + Tunnel.

1) Don't sleep on the SS
-SS is an underrated business and if you can fit Self Serves onto a lot with a Tunnel or IBA, it's a killer combo.
-SS bays serve a diverse crowd and if you are running an IBA or a Tunnel already on the lot, it uses the same equipment and easier to manage

2) Go Touchless in a market full of Soft Touch Tunnels
-Be different
-Some people don't want brushes
-Open 24 hours
-Less labor intensive than a Tunnel

3) Marketing works
-We have increased prices and grown memberships at our Express wash with aggressive marketing
-Within 5 miles we have at least 8 Tunnels around us


My stupidity/ignorance/assumptions
How many employees @ what rate?
- Our Tunnels require Minimum 2 employees all day, 3 -4 employees on weekends
- We pay just above minimum wage
- The more trained and experienced employees are paid 1-2 dollars more per hour

Technician employee onsite?
- We train staff to take care of smaller repairs and maintenance
- We have car wash techs (1099 contractors) on standby, they charge us $150 per hour
- We keep a lot of spare parts on site ready to go for easy swap outs to minimize down time
- We do repairs and maintenance early morning or after hours.

Chemical monthly costs?
-We are at about 1500 per month on our Tunnel

Insurance premiums?
-Our SS+Tunnel is at 12,000 per year
-You will have a higher premium due to lack of experience in car washes, number of employees, number of cars washed, and sales

Utilities cost?
-We are at about 10% of sales per month
-Electricity is our biggest cost, then water

How many service days/year for maintenance?
-We have our techs services our end of month routinely
-We do pre-emptive repairs at least once monthly
-We always have something break once to twice monthly (small or big)

Where are you located?

 

[jfmoran]

Demographic
2.5M MSA
250K within 5 miles
$1M land price/1.75 acres/but tight
Building envelope 335’x75’
20k cars/day traffic
ingress/egress 4-lane undivided w/turn lane
400’ from 4-way intersection
Nearest tunnel 3.5 miles w/ $25 avg wash
Four full seasons

Planning
Owner office on-site full time
SBA 504/7a combo
120+ ft tunnel with vacuums
Current bias is Sonny’s
Hand wipedown at finish
12 hrs/day, 6 days/wk
30 cars/hr
20 days/month
$20 mean ticket price
$3M total price for build

My stupidity/ignorance/assumptions
How many employees @ what rate?
Technician employee onsite?
Chemical monthly costs?
Insurance premiums?
Utilities cost?
How many service days/year for maintenance?

Plenty of Known Unknowns…but I‘m certain there is plenty I’m missing.

Any/all advice would be helpful. Thick skin, so fire away.

Thank you in advance.

Have you had Sonny's do a Site Analysis and ProForma for you?
$3M total price for build including land is not even close.
I'm in the Mid-Atlantic region working on several projects, the cost to build the building is $2.75-3M, Equipment and install for an Express is another $1.2-$1.5M. That's not including land. Total project cost is $4.5-$5M easy.