Replacing working IBA's for new equipment, when does it make sense?

[AnalyticWash]

I am currently trying to figure out when the right time is to replace our 2 IBA's. Both are currently working but are approaching 14 years in use. Our top wash runs around 9 minutes per car which certainly puts a limit on our throughput on busy days.

We currently average about 2000 cars per month on our IBA's and we are spending approximately 20k/year to maintain them. I would say around 25-30 days per year we have capacity issues with long lines where I see customers turn away just because they do not want to wait.

Does anyone have feedback on replacing existing working equipment for new, faster, & cheaper to maintain equipment? Did you see an increase in revenue even with the same customer base?

Does anyone have insights into what your daily capacity for your IBA's needs to be in order to maximize value from your customer base?

I hate the idea of replacing perfectly good & working equipment so how do I decide?

 

[bert79]

We will soon find ourselves in this position as well so I'm glad you brought this question up. One question though. If you are spending 20k to maintain your IBA's I'm wondering how "perfectly good" they are. Just a thought.

 

[AnalyticWash]

If you are spending 20k to maintain your IBA's I'm wondering how "perfectly good" they are. Just a thought.

Great question and also one I have a hard time wrapping my head around. The machines are usually working but when we do have a failure, repairs are expensive. I would say we get around 2-4 major breakdowns per year/per machine that take the equipment off-line for more than 24hrs. So maybe perfectly good means washing cars 95% of the time with no issues.

The machines are also reaching a point where major repairs/maintenance are potentially on the horizon just to keep them running into the future. That being said our yearly maintenance spend might approach 30k/year sometime over the next 2-4 years.

 

[Rfreeman]

I have 1 site with an IBA so my experience is limited but if I was in your shoes I would do it. First, you will be able depr. the equipment 5yr. life I believe. Secondly some not all of that repair cost will be recaptured but dont expect that you wont have any repair cost bc of a new machine. Lastly with the technology that is out there now I would estimate your through put should increase which should help you capture some of that drive off business or new business as well

 

[washnshine]

IMHO 20k per year in repairs is outrageously high. If your repair costs were not that high, I might hold out, especially since you have two machines- you are never totally down and have twice the throughput when both are working. But 20k would be my signal that it is time. That is a lot of cash for machines that are that old.

 

[Kramerwv]

Does your $20k include labor for an employee plus parts or just parts? Some basic math - if you increase throughput with new machines to 20 cars per hour versus currently 13 cars per hour based on top wash being 9 minutes, you could wash 7 additional cars per hour. If you multiply that by 10 hours for a very busy day when lined up times 25 of those days you’d have 1,750 additional cars per bay, so potentially 3,500 more cars washed. This may or may not be a good assumption but based on your numbers it might be. Multiply that number by your profit per car and it shows that you might be $15k-$25k per year to the positive.

That plus reduced maintenance and chemical and water savings likely makes sense.

 

[MEP001]

What machine are you running? Is all your service done by a distributor? Is that cost all repairs, or is there a preventive maintenance involved, and if so what percentage of that 20k a year the PM?

Is that 2500 per month cars per bay or total? Are you looking to increase it or do you think that's your peak? Are you fighting any competition?

 

[AnalyticWash]

Does your $20k include labor for an employee plus parts or just parts? Some basic math - if you increase throughput with new machines to 20 cars per hour versus currently 13 cars per hour based on top wash being 9 minutes, you could wash 7 additional cars per hour. If you multiply that by 10 hours for a very busy day when lined up times 25 of those days you’d have 1,750 additional cars per bay, so potentially 3,500 more cars washed. This may or may not be a good assumption but based on your numbers it might be. Multiply that number by your profit per car and it shows that you might be $15k-$25k per year to the positive.

That plus reduced maintenance and chemical and water savings likely makes sense.

20k includes labor.

We currently do about 17 CPH with both machines running. New equipment should get us to around 28-30 CPH with both running.

Ballpark water savings would be approximately $7k/year at same number of washes.

 

[AnalyticWash]

What machine are you running? Is all your service done by a distributor? Is that cost all repairs, or is there a preventive maintenance involved, and if so what percentage of that 20k a year the PM?

Is that 2500 per month cars per bay or total? Are you looking to increase it or do you think that's your peak? Are you fighting any competition?

I would say 50% of repairs are performed by a distributor. None of the 20k is preventative maintenance. We factor that into just our overhead of running the site and figure it would be roughly the same on new equipment.

2500 both IBA's combined. We are in a city with plenty of growth so growing the number is certainly important to us but not a deal breaker. Our machines now realistically could wash over 6k cars per month combined. This is great but obviously we do significantly more business on Sat/Sun which is when I see the capacity issues.

I think having more capacity is important to us with more competition from subscription based tunnel washes around us. If we ever have to move to that model any wash is going to want the fastest equipment on the planet.

 

[I.B. Washincars]

New equipment should get us to around 28-30 CPH with both running.

28 CPH is a car every 4:17...not gonna happen.

 

[Rfreeman]

What equipment are you running now?

 

[AnalyticWash]

28 CPH is a car every 4:17...not gonna happen.

I have seen it first hand (from two different manufacturers). Approx. 30 sec/pass.

With our current sales distribution of wash packages usually purchased that 28CPH number is very realistic and allows for undercarriage and dry time on all but our express wash.

 

[AnalyticWash]

What equipment are you running now?

Karchers

 

[bert79]

What machines have you looked at?

 

[washnshine]

Are you in a market where you can/would do one touch and one touch free? This is off topic from your first question but if you have two automatic bays, one of each might draw in customers you currently don’t have.

 

[soonermajic]

This is 1 of the better threads on here in a while.
Although I'm like a couple others. I can't hardly see 6000cars/month potential out of 2 IBAs, unless it was 100% lowest dryer free pkg. Fpr a good price/car avg, 6k cpm puts you doing $1MILLION dollars per year! That is simply mind boggling.!! Even 2500 per month is 85 cpd, & tremendous on 2 IBAs!

If I was you, I'd take a long hard look @ Oasis' "Eclipse" model of IBAs. You could do like a couple guys suggested & do 1 Touchless & 1 friction. Their's can do about 35+ cph, on those 2 units, & won't break the bank!

Increase throughput, decrease elec & water, save $20,000 on repairs cpuld see maybe $45,000 more + depreciation for 5 years.
Seems like a no brainier....

 

[AnalyticWash]

Are you in a market where you can/would do one touch and one touch free? This is off topic from your first question but if you have two automatic bays, one of each might draw in customers you currently don’t have.

I would most likely stick with two touch-free. We have well dialed in chemistry and clean very dirty cars with our existing set-up.

While having one be touch might bring in some new customers we have way to many tunnels in our area that are all touch.

 

[AnalyticWash]

Still looking for more perspectives on these questions:

Does anyone have feedback on replacing existing working equipment for new, faster, & cheaper to maintain equipment. Did you see an increase in revenue even with the same customer base?

Does anyone have insights into what your daily capacity for your IBA's needs to be in order to maximize value from your customer base?

 

[Waxman]

When I re-load my IBA I'm planning to buy a Washworld touchfree machine. I plan to raise all the prices and create a top package that will be priced above $20. That is one way I plan to increase revenue with the new equipment. The other way is less down time. Pretty simple.

 

[AnalyticWash]

When I re-load my IBA I'm planning to buy a Washworld touchfree machine. I plan to raise all the prices and create a top package that will be priced above $20. That is one way I plan to increase revenue with the new equipment. The other way is less down time. Pretty simple.

Is your competition priced that high? I wish I could price that high but most my IBA competition is priced around $12 for top package. Household income in my area says I would be pushing it to raise my top above $14 or $15.