Older washes that need a new owner

[smallwash]

Hello All, I am new to the forum but have been reading on here off and on for awhile now. I own a 3 SS and 1 auto in a small town of 2300 in Oklahoma. I purchased the wash two years ago and it was an aging 4 ss only. I learned a lot with this first experience, a lot of mistakes were made (I paid out a lot of money) but overall my wash is profitable. Hind sight tells me that I should have just made small upgrades to the existing SS and not of put the auto in. I gutted the equipment room and started from scratch.

What is the best way to approach neighboring town car wash owners about purchasing their washes? I have a wash in mind that is located 40 miles away. It is a 3 and 1 in a town of 2900. The competition consists of one other 3 bay SS. This location has been neglected for several years. It appears the owner has sucked the profits out and has not get the equipment working, meter boxes are out of date, brick walls are awful. Now there are limited profits so the owner is stuck. The location is awesome and with some TLC this could be a very profitable wash. I have spoke to the owner, his attitude is poor and he says "I should just sell it" He has owned it for approx. 8-10 years and has not invested back into the business. I made it clear that "when" he wants to sell it I would be interested. I do not want to be the guy that is calling too much, that is annoying him asking when he will sell. I am a young man with a business degree who would like to own 3 or 4 washes within a 45 mile radius. I currently have a full time job but the wife is 1.5 years away from getting her pharmacy degree!

Thanks for your time!

Smallwash

 

[pgrzes]

wondering why you say you should not have put in the automatic?? I have a pretty busy 7 bay ss/1 auto and my auto does quite a bit more then all 7 bays combined.

 

[smallwash]

wondering why you say you should not have put in the automatic?? I have a pretty busy 7 bay ss/1 auto and my auto does quite a bit more then all 7 bays combined.

My auto has averaged about 10 cars per day. I set my loan up on a conservative payout which has allowed cash flow. Also my self serve has been good. I have a D&S I 5000 and paid new price. If I could do it over again I would have bought a used/refurbished D&S 5000 for a fraction of cost and washed the same 10 cpd. No complaints with the machine just looking back I think NEW auto in small town in my case was not the best decision.

 

[Earl Weiss]

................... I have spoke to the owner, his attitude is poor and he says "I should just sell it" Smallwash

Just say "It would be a good fit for me, what would it take for you to sell it?" and go from there.

 

[Greg Pack]

I think you're doing it the right way. Just a personal approach works well for most people. You will run into the occasional oddball that thinks his wash is a pot of gold. You also run people that won't sell unless they recover their investment, regardless of how poorly it does.

You might also want to call your local distributor, he may know of some people who would sell.

My only advice is get we connected in the local carwash community. Many owners decide to sell when they hear rumors of a new wash being built in their market. You don't want to buy those until the market until the dust has settled.

 

[robert roman]

“What is the best way to approach neighboring town car wash owners about purchasing their washes? I have a wash in mind that is located 40 miles away. It is a 3 and 1 in a town of 2900.”

I am a young man with a business degree who would like to own 3 or 4 washes within a 45 mile radius. I currently have a full time job…..”

I would consider a strategic approach to the problem.

For example, if the goal and objective is to own and operate a chain of washes, the first problem to solve is how many stores, over what period of time and where.

The reason being an expansion plan decision requires an integrated investment model.
Without this, the goal and objective of creating a chain may never be accomplished.

For example, geographical expansion means adding new stores to an existing network. The trick of the tail here is to locate stores close enough to maximize market share without cannibalizing sales of individual stores.

However, in rural areas populated with small towns there is usually a regional shopping destination that consumers gravitate to from considerable distances, like a big box store draws customers.

If so, it may be advantageous to build a substantial wash in that area rather than diffuse the business over considerable distances.

For example, the targeted trade area is a 40-mile radius or roughly 5,000 square miles.

The greater the distance between stores the more difficult and expensive it will become to provide a customer-centric operation.

Moreover, the wash under consideration is under-performing. Acquiring this wash will impact cash flow of the existing business.

If the sales projections do not materialize as expected, end of the chain.

 

[sjb]

Hi smallwash.

40 miles away, yikes!

My 2 cents would be to figure out the current owners threshold of pain and make sure you have his top of mind presence when he is ready to throw in the towel. You want him in the mindset that you will remove his pain and take this headache off the table for him.

He will need to be properly motivated to dump the wash as opposed to selling it for a premium, or for what he has in it ... etc.

If after you have those conversations and understand his preferences and agenda... a $35 bottle of scotch could go along way in making sure you get the first right of refusal when he is ready to cash out.

Finally, make sure it makes sense to you and your wife.... 40 miles away would certainly be a deal killer for me, but in Atlanta, that could be a 2 hour commute if not done at the right time of the day.

Best of luck!
sjb

 

[smallwash]

Being located in rural Oklahoma, 25 - 45 miles away is my only expansion opportunity. The goal is to line up two or three washes in that 45 min drive and possibly hire a part time clean up person. Not too much traffic in the rural area but still plenty of cars to clean!