Revenue Predicitions for improved site

[0616user]

Hello,

I have a question regarding sales forecasting. I am looking at a wash that has been neglected by the current owner for some time. It is fairly easy to figure out how much it will cost to make upgrades, but how can I figure out how much of a sales improvement I would expect to see from those improvements? I can calculate population growth in the area and make predictions based on that, but I know significant improvements to the site would also increase revenue and have no idea where to start in accounting for that increase. If you could give me any guidance or point out useful resources I would greatly appreciate it.

Thank you!

 

[robert roman]

MPSI retail explorer model uses a forecasting system to predict carwash sales volumes for an undeveloped property or changes to an existing facility.

Although used a lot for convenience store and petroleum sites, MPSI can answer questions or perform simulations like - how many more cars can be washed if a bigger facility was built? What happens to sales volumes if price is lowered or raised? What happens if another bay is added? What happens to sales volume if someone builds close by?

However, the questions have to relate to the principal of convenience retail site location or gravity effect - people tend to gravitate to the most easily accessible location to buy.

The modeling process requires a lot of data – traffic patterns, demographics, competition, etc. A combination of mathematical models (i.e. gravity, spatial) is used to address complexity.

It’s expensive. Last quote I obtained from a commercial vendor was $4,500. No carwash study just modeling.

Carwash equipment manufacturers also have models (analogue-based checklists) but these models are designed primarily for site selection, pro forma and to sell equipment.

Another option is to engage a carwash consultant or equipment dealer that has experience in developing models for specific applications.