Please HELP new IBA owner with low revenue & high traffic counts

[Michael McKernan]

Hi, I am a new owner of a 2 bay laserwash in San Antonio TX, I bought the wash in April of this year and my revenue has been extremely low. I really need the help of anyone on this forum for advice on what to do at this point. The wash was built in 2004, the previous owner stated on tax returns and income statements $100K for 2005 and $110K for $2006. Since april I have been getting $5,000 on average per month including vac and vending. The past month with few days of rain was only $4,000. Since I bought the wash I added 2 fragramatics vacuums, a full sized 39 selection vending machine and the image enhancement package for the 4000. The pricing is $10, $8, $6, and $5. The total washes purchased since April is 4,000. The traffic count is 18,000 on west ave and 5,000 on the street in front of the car wash. What improvements do you suggest I do to get the counts higher? The car wash is tucked behind another shopping center so it doesn't have the greatest exposure from the main road west ave but there is an old car wash sign that is over 100ft tall in front of the car wash the faces west ave. I have to put money in the car wash each month to keep it open, this is just not working out, is this business seasonal? What months generate the most revenue? I would appreciate suggestions that would help get this business back on it's feet.

I reread you initial post. Does the previous owner have any other business interests? You don't drop off that much.

 

[Greg Pack]

Would it help to make the $5 wash $3?

The express tunnel can play the $3 game but you don't have the throughput capability. In an IBA I'd rather come down to strongly encourage purchase of the top washes. You can't wash enough cars in an IBA at $3 to make any money. You might make a dollar per car profit. If you come down on the ten dollar wash to seven you still make probably 3.50 profit. ( I allocate $1 per wash to depreciation and maintenance of wash equipment) Just my opinion, I'm sure there are others.

Make it a deal for the customer. If I could stand it financially I'd sell the top wash for $5 for a six months- 1 yr. to try and gain some steam. Give the customers your top wash with free vacs, drying towels, etc and they will feel like they stole from you. If decent numbers start coming through (2K cars) go to $7 or $8.

 

[raisetheprice]

You cut the M5 rubber down the back then zip tied? I think you should get rid of the name also. Both of mine say Laserwash & Touch Free/Spot Free on the building and my pole signs/marquee out front say Laserwash. People recognize that name especially in Texas since there's one on every corner in every town. Sterling H2O means nothing to most people. Do not change your vacs, 1) It's too costly 2)Those canopies area attractive and functional 3) They're already there. Don't offer anything for free unless you're standing there giving it to the customer personally. Hand out $1 token notes ALL over. Have them printed with your new name and address.

 

[Wash-A-Roo]

I ran a 1.00 carwash special at one of my locations for any wash package for two weeks. Turned out to be a long term winner. I have a 2 bay laser in Texas...if you have any questions email me at samandlynsi@washaroo.com

 

[tobaccofarmer]

As previously said location is most important, and unfortunetly these stealerships (nicely said, "Raise the Price") will build these rat holes wherever they can and convince the new owner how great it will be. So with that being your major negative I would sell asap. If you dont like that option then drop CSI chemical and get something that customers actually see works, they dont care about Lustra Bear and all that crap, they dont even read it anyway. Just make sure it stands out from everything else-- what I mean by that is to make sure each car comes out spotless each and everytime even more importantly than the signs and banners. Unfortunetly as you are the second owner chances are the place has a bad name and all this will be very hard if not impossible to achieve. One last thing, lowering prices just devalues your product and I wouldnt recommend it. However this is just an opinion and I don't think I know it all... just a few personal ideas.

 

[Waxman]

Why not contact the old owner and ask for some help? I keep all of my financials on QB Pro. I can tell you income and expense for every month in business since opening. Maybe seasonality has something to do with it. Revenues dropping bu alomst half in a year do not make sense. Some opertaors are off 20% and that seems like alot to me.

What about having your attendant do some detailing? It would at least pay for the attendant, if nothing else. I think you need to do 2 things; focus on service (detail cars, be attended on a regular basis) and become the community's car wash by holding charity washes at your site. Go for it!

 

[scott]

Waxman makes a good point- how well do you trust the p.o.'s financials? in other words, did he have other businesses he could have shifted income from to "puff up" the carwashes #'s, knowing he planned to sell? If the #s are legit, it could just be a seasonal thing, and will right itself out- but a lot of good suggestions here, nonetheless.
upon reread, its not seasonal if its been bad since april, and michael mckernan already asked about p.o.'s other interests..

 

[Jony82]

If the previous owner puffed up his books, you might be able to go after him legally if you had a rock solid contract in place upon buying.

My contract upon buying had a clause where the seller agreed he did not provide any misleading financial data. From what my lawyer told me, this protected me in case he messed with the books and the wash wasn't bringing in what he said.

It might be a tough case to win, but I'd carefully go over the financial information he gave you and take it to your lawyer for an opinion. If he puffed up his books you might be entitled to some of the purchase money back or some compensation. Worth a try if you are going to lose your butt on this.

 

[Waxman]

Great idea for a car wash purchase agreement in which financial data for the wash is given. I will use this! Thank you.

 

[MEP001]

Why not contact the old owner and ask for some help?

Chances are they sold the wash because they couldn't make it work. If that's the case, they should be kept out of the loop now.

 

[Michael McKernan]

Chances are they sold the wash because they couldn't make it work. If that's the case, they should be kept out of the loop now.

I would contact the owner but not for help. I would be asking about volume. In San Antonio, water consumption might be close because of no weep water.
I'm getting water bills for the last 2 years and compare to my current ones, if it is me.
BTW, my friends in SA, say this is not that bad of a location and in a really nice neighborhood. Maybe to nice. Where his customers might be traveling to get the entire car cleaned while they wait (full tunnel). He might want to adjust accordingly.

 

[Sequoia]

There are two issues here.

One, find out from the prior owner what the revenue was in the past by season. Maybe you have some "big-number" months ahead of you but you don't know that yet. Something is very weird if you are truly down 40% with no good reason to point to.

Two, every problem you have is related to wash volume. Do everything you can to build the wash volume-- special pricing, flyers/mailers to local apartment complexes, free wash promotions, etc. Do them in a way so that you can use them today to build more traffic, and slowly creep up the prices/reduce the incentives as the customers in your local area have made it their habit to visit your wash. Build the regular core of customers in this way, and you'll see things much improved within a year.