New to Forum / Car Wash Biz

[bigdaddyvoges]

All,

I figured I would start doing my research now. My father-in-law owns a car repair shop in Chicago on a high traffic street. He is neearing 60 years old, and wants to finally retire.

My brother-in-law and myself have always discussed turning his shop into a hand car wash. He has access off the main street with cars able to leave through the back and into an alley that is 90 feet from the side street. You could fit 3 cars straight in and 2 on the side which would be for detailing and what not.

We have researched how much supplies/labor/utilities would cost, but we don't know who to contact to get the drain dug out and where to buy the necessary machinery (pressure washer, soap machine etc...)

Any help would be a plus as we have a budget of roughly $100K to use in overhauling this. Please help, I know I am sounding vague, but if any further information is needed, please let me know.

Bob
Chicago

 

[bigleo48]

Local plumbing and engineering firm could help you with the building mods.

There are many major self-serve equipment vendors around and they likely can help with the install. Look in the industry directory at the top of this webpage for a list.

Big

 

[JMMUSTANG]

You won't be as effected with the weather in the repair shop business.
At least when it gets really cold you'll be busy whereas the car wash, if open, will not.
I rent space to a large auto repair shop. He and I were just having this discussion yesterday because this whole week we have had rain or forcast for rain and he's been busy and I have not. This weather pattern has been like this since April.
Next time it's raining look outside and think about being in the car wash business and then look inside your shop and count the money your customers are spending to get their cars fixed, rain or shine.
Stay with the auto repair. You'll be much happier.

 

[bigdaddyvoges]

JMMUSTANG,

I would like to, but since this economy has gone south, my father-in-law (who runs the shop by himself) has gone from doing 10-15 cars per week to 2-4 cars per week. It is almost cheaper for him to stay home. When we first asked him about the wash idea 2 years ago, he said he would retire in 5 years, but with business being the worst it has been, he is ready to move on right now. If this shop was super profitable, there wouldn't be a rush to move on with a car wash, but the fact of the matter is, the money and jobs just isn't there and hasn't been since early this year....

 

[DavidM]

I don't know if I would want to be in the auto repair business anymore than the car wash business, they both (along with all businesses) have significant challenges.

You need to do alot of studying, if you contact a distributor at this point, they will talk you into spending your money by telling you how car washing is all roses. Listen to the guys here on the forum to get some balance.

What makes you think a car wash will be more successful in this economy than a repair business? Before you spend your money be sure that this isn't just a case of "the grass is always greener..."

David

 

[bigdaddyvoges]

Does anyone know how much insurance would cost for a hand car wash as I described?

 

[MEP001]

If the economy is the issue for a failing business that is a necessity for some people, then refurbishing an auto shop to a hand car wash (a premium service folks can do without) doesn't make sense.

 

[pitzerwm]

IMO, hand washing would only succeed in areas where people, a lot of people, have expensive cars that they don't want to trust to a car wash, and too lazy/busy to wash themselves.

Ask Waxman or other detailers how many they get paid to hand wash.

 

[Waxman]

There have been posts listing the 'pros' of the handwash. I think there a precious few markets out there that would support a 100% handwash. The cost to provide the service and the price the customer pays are high.

I hand wash a few customers' cars. Mostly older folks who would use the SS bays but want me to do it for them.

 

[bigdaddyvoges]

I know I must do a lot more research, and I have since gotten the traffic counts of my street and the 3 closest competitors (who are on slower streets) as well as reviews and price from my competitors, and here is what I came up with.

Daily Traffic Counts
My Location = 31,500 @ 30mph
Competitor 1 (3 miles away south) = 18,000 @ 25-30mph
Competitor 2 (4.25 miles away west) = 21,000 @ 30mph
Competitor 3 (4.5 miles away north/northeast) = 18,000 @ 25-30mph

Reviews/Price (exterior only/"in and out" typical sedan pricing, with SUV's adding $1 for exterior and $2 for in and out)
Competitor 1 = Mostly negative, or nothing spectacular, 2/5 stars, $12/$17
Competitor 2 = Nothing spectacular, 3/5 stars, (i took my car there and didn't like the wash IMO) $12/$17
Competitor 3 = Good to Very Good (I took my car there a few times, did a decent job, I am a perfectionist so it wasn't all the way up to my standards, but close enough) 3.5-4/5 stars, $14/$18

Upon reviewing costs I figured I would need an average ticket of $13 per car with an average of 14-18 cars per weekday and 36-50 cars per weekend day. So like 2-3 washes an hour during the week and 5-6 washes per hour on the weekend. I don't think this is an outlandish estimate, but in fact very conservative.

I will keep doing my homework.

Bob
Chicago

 

[Earl Weiss]

I know I must do a lot more research, and I have since gotten the traffic counts of my street and the 3 closest competitors (who are on slower streets) as well as reviews and price from my competitors, and here is what I came up with.

Daily Traffic Counts
My Location = 31,500 @ 30mph
Competitor 1 (3 miles away south) = 18,000 @ 25-30mph
Competitor 2 (4.25 miles away west) = 21,000 @ 30mph
Competitor 3 (4.5 miles away north/northeast) = 18,000 @ 25-30mph

Reviews/Price (exterior only/"in and out" typical sedan pricing, with SUV's adding $1 for exterior and $2 for in and out)
Competitor 1 = Mostly negative, or nothing spectacular, 2/5 stars, $12/$17
Competitor 2 = Nothing spectacular, 3/5 stars, (i took my car there and didn't like the wash IMO) $12/$17
Competitor 3 = Good to Very Good (I took my car there a few times, did a decent job, I am a perfectionist so it wasn't all the way up to my standards, but close enough) 3.5-4/5 stars, $14/$18

Upon reviewing costs I figured I would need an average ticket of $13 per car with an average of 14-18 cars per weekday and 36-50 cars per weekend day. So like 2-3 washes an hour during the week and 5-6 washes per hour on the weekend. I don't think this is an outlandish estimate, but in fact very conservative.

I will keep doing my homework.

Bob
Chicago

I am in Chicago as well, but have tunnels which also offer hand washing. Do you count that type of operation as your competition?

I think you need to factor all car washes as your competition. Yes there are some who will only go to a hand car wash but many frequent other operations such as Self Serve Bays and IBA . What tyoes of washes other than hand washes have you considered as your competition?

Would you consider giving the General Area of your location? Say the nearest main intersections or even main intersections a mile or more away? It seems like there are hand washes every half mile or so near me.

 

[bigdaddyvoges]

I am in Chicago as well, but have tunnels which also offer hand washing. Do you count that type of operation as your competition?

I think you need to factor all car washes as your competition. Yes there are some who will only go to a hand car wash but many frequent other operations such as Self Serve Bays and IBA . What tyoes of washes other than hand washes have you considered as your competition?

Would you consider giving the General Area of your location? Say the nearest main intersections or even main intersections a mile or more away? It seems like there are hand washes every half mile or so near me.

I did a search and even the nearest tunnels are more than a mile away and pretty pricey like $7-$10.....

As far as location goes, we will say north/northwest chicago.

 

[bigdaddyvoges]

Info and a few Questions

Additional Info-
We are not expecting this wash to be a full time income for myself or brother-in-law. My wife and I will keep our full time jobs, and my brother-in-law owns his own company (service industry) to where he makes $250-$300K per year and it isn't very labor intensive as he has busted his tail for 10 years getting it to where it is. We both don't even plan on taking any money out of the company and only will if we feel the business can handle it (I am the accountant). I will put most of my time in after work and weekends, and my brother-in-law will do weekdays. Also, the building itself is worth $500K in this economy, it has a loan on it now for $120K, and we are looking to pull out another $100-$140K for the overhaul. The property taxes are $9K and the loan payment would be like $2500 or so. I don't think this is a big debt load or a huge payment to be made for this type of venture. Just my thought, but I would also like to hear what everyone thinks.

Another question, has anyone here ever gone after like getting business from car dealers or fleet vehicles or has anyone offered a pick-up and drop-off service? We are in a major residential area, near public transportation trains, and have 3 car dealer and 4 used car lots within 4 miles.

Final Question, can anyone here guesstimate a year/monthly business insurance for this operation?

Thanks.

Bob

 

[Waxman]

I think you may be getting ahead of yourself somewhat with your questions about fleet accounts and pickup/delivery service. But I'll address one anyway; pickup and delivery will up your insurance costs considerably. I have a small carwash and separate 4 bay detail shop on land I own and I would guess your annual premium at $2500-5500 for insurance depending onb alot of variables l;ike labor (to which workers comp insurance applies). By why guess at it? Part of your job in sussing out the numbers (and it comes down to numbers only, pretty much) is to get on the telephone (not internet) and call some insurance companies that specialize in carwash insurance (The Insurance Center, Mang, etc.) to get a quote.

You need to start with the tax returns of the business and create a legitimate business plan including 3 years cash flow projections for the business. There are people on this forum who you can find who will create a feasibility study for you and I'd bet it would be money very well-spent because they have a track record you can ask them and their clients about as well as much more experience than I and some other people who post here have.

FWIW, my next carwash project will absolutely, 100%, without a doubt, involve a feasibility study by an independent 3d party.

 

[Waxman]

One more thing; it is great in one respect that everyone has a full time job and some cushion. But you'd still suffer if the project lost $.

Also, a carwash is not an absentee-owner deal like many think it is. It can be but those washes often fall short on service and functionality.

 

[bigdaddyvoges]

This is a start up conversion of a wash. There aren't any tax returns available that would have any relevance. I am an accountant and I am going through putting together a business plan as we speak.

Also, we are not going to be absentee owners. Either my father-in-law, wife, brother-in-law, or myself will be there at all times of operations. We are not taking anything for granted, nor are we looking to take any money for the first year unless by chance business goes particularly well.