Questions for Razor owners

[Jamozzi]

Hi all,

First time owner here close to pulling the trigger on a Razor (onboard drying). Some questions for those who are operating or have operated one. Any feedback would be great.

1. What has been the downtime (say per month) during your ownership?

2. What's the % downtime due to scheduled maintenance vs unexpected faults?

3. I understand that each Razor comes with a spares kit. How adequate is this kit? Do frequently have to reach out for proprietory WashWorld parts?

4. I will actually be leasing a site for a single IBA and have gone through the math many times? Hoping to get some alternative opinions here. Please let me know if this sounds profitable or if I'm gonna be out of business within the year. Conservative estimate of cars per day = 80. Wash pricing $6 Basic (double presoak, drying agent, dry) to $9 Advanced (undercarriage/wheel blast, double presoak, sealant, dry). Lease runs at $3600 per month. Planning to use Lustra Ultraflex due to space constraints and simplicity of the system. I am unsure of the chemicals expense. I plan for this site to be unattended.

Thanks!!

 

[BBE]

So you're going to wash over 29k cars a year with a single IBA?

 

[Jamozzi]

Yes. That volume is actually based on an existing attendant manned manual wash that is in service right now (single bay in a gas station, 2-4 attendants, 24/7). The plan is to replace that with an IBA fitted with a Razor. I am lead to believe that the machine can handle these volumes and more? Does your experience tell you otherwise?

 

[robert roman]

“…% downtime due to scheduled maintenance vs unexpected faults?”

Major downtime would occur at 4 to 5 years for minor overhaul and 8 to 10 years for reload. Otherwise, routine stuff is done on rainy days or night and about 80 percent or so of faults or miscues can be handled over the phone once you learn the machine.

Profitability is function of a company’s goal.

For example, goal of a carwash company with a bond-type lease (i.e. triple net) would be to make money now and in the future whereas goal of company that owns its premises would be an exit strategy that creates wealth.

Profitability begins with technical. First is capacity. Carwash is normally designed for maximum hour. Maximum for average of 80 cars a day would be 17 cars.

Single inverted-L is good for 12 to 15 car hour. Typically, if capacity is less than maximum hourly demand, it’s difficult to achieve the overall or annual projection.

80 cars X 312 days equal 24,960 cars and assume you can squeeze by with the long waiting line and long waiting times during busy periods.

Say, $6 and $9 equal average revenue of $8.10 ($6 X 0.3 and $9 X 0.7) or gross sales $202,000 (rounded).

Operating expenses including labor for housekeeping and routine maintenance is 40 percent of gross sales or $80,800 or $3.24 unit cost ($80,800 / 24,960 cars).

Figure $150K for machine “all in” with standard lease, say, $3,000 per month or $36,000 plus $43,200 ground lease (assume it includes insurance and property tax) equal $79,200 fixed cost.

Breakeven = fixed costs / (price per unit – unit costs)

Breakeven = $79,200 / ($8.10 - $3.24)

Breakeven = 16,296 cars or 65 percent of projections

24,960 cars would generate NOI $40,000 (rounded).

Here, better results would come from identifying additional revenue opportunities (i.e. achieving $10 average revenue) rather than small incremental cost savings in soap, etc.

Hope this helps in Singapore.

 

[soonermajic]

80cpd is gonna be hard to achieve. I'd imagine that you're gonna lose some volume because it's no longer attended.

 

[Jamozzi]

Thank you all.

Rob, your $ numbers does indeed corroborate with mine. Its good to know that even though my calculations were based on more detailed chemical costs + labor estimates etc., it seems that being halfway around the world - things aren't exactly that different. Other than the customers of course.

But I am curious how 80 cars per day translates to your calculation of a max 17 car per (hour) - I'm assuming you made a typo?

Seems like others have similar reservations of achieving 80 cars per day.

If I use the following estimates over a 24 hour period
1) 2 peak hours at 10 cars per hour
2) 6 normal hours at 5 cars per hour
3) 16 'dead' hours at 2 cars per hour
That comes up to 82 cpd. Why is that hard to achieve (you'll have to take my word that the traffic and car density in this site is high enough, and that cars + taxis go through even the existing site round the clock)? Are you saying that the WW Razor cannot handle this traffic? Or that room to stack 3 cars in line is insufficient? Or ______ ?

If anybody has thoughts on my original questions please comment! I appreciate this!

 

[Jamozzi]

Where are all the Razor owners?

 

[wash4me]

How much does labor cost in Singapore? The automatic will run all day and all night but night business is unusual for most locations.

 

[robert roman]

“….curious how 80 cars per day translate….to…max 17 car per (hour) - I'm assuming you made a typo?”

No typo.

This value is calculated with an equation that is based on analogue stores – groups of highway-oriented washes that are similar in terms of configuration and operation.

Retail sites are grouped separately from gas sites.

The reason 17 cars may seem odd is your unfamiliarity with turnover modeling.

“If I use the following estimates over a 24 hour period….2 peak hours at 10 cars per hour..6 normal hours at 5 cars…16 'dead' hours at 2 cars….comes up to 82 cpd.”

This information is dynamic (real time) whereas carwash turnover models are static.

So, if the anticipated maximum hour is 10 cars (as you stated), any machine capable of 12 cars an hour would be sufficient.

Reservations about 29,000 cars a year is a location problem whereas handling or cannot handle this traffic (80 cars a day or 17 cars an hour) or room to stack 3 cars in line is queuing (waiting line) problem.

Location and queuing problems require different information and methods to solve.

For example, if the location is street corner without gas, wash volume is primarily function of pass-by traffic. If retail gas site, wash volume is mostly function of gas volumes (gas/wash rate). Here, the relationships are linear and results are discrete.

Problem of how many customers in line, time waiting in line and total amount of time in system is a function of arrival rate of customers and service rate. Here, relationships are exponential and results are expressed as averages.

 

[BBE]

I don't think that it's going to play out the way you are thinking it will. Here is a copy of this years in bay automatic survey:

http://www.carwashmag.com/fileadmin/pdfs/2015_Aln_In_Bay_Automatic_Survey.pdf

Some good stuff for you to look over, note that the average in bay automatic only does 17-18k cars a year. It actually surprises me that the average is this high, as I know PLENTY of operators who barely crack 10k. You are thinking you will be 10k higher than that. You're 80 cpd also assumes that all 365 days of the year are going to be "wash" days. I can promise you that they are not. I'm not familiar with the weather in Singapore but I imagine that you have rain. You are going to have plenty of days where you wash 20 cars or even less than that. Then on the busy days when you are trying to make up for a poor day you aren't going to be hitting 160 cpd to make up for the day before because of stacking and volume/capacity constraints.

If you truly think the demand for that type of volume is there, you would be better to look into a mini tunnel. But then you will have to keep it attended.