ROI for appearance upgrades

[Mel(NC)]

I have made a lot of upgrades to the equipment of my 4 bay self serve wash over the last 5 years. The bays and vacs both except bills and credit cards. While the equipment is fairly modern, the wash is 30 years old and the building and lot could use some cosmetic work. The building could use a new awning and steel roof. The landscaping could be improved. Finally, the street sign looks dated.

My wash is in a small town of 1800 people. The closest competition is 5 miles away. I doubt I would be able to attract customers from other washes by having a nicer looking wash. Would you expect to see much increase in revenue for appearance upgrades?

Thanks!
Mel

 

[MEP001]

From my experience, customers go to a wash because it works well, consistently. I took over a wash that was severely run down and didn't do much for it except crank up the soaps, keep it clean and test everything every day. That alone brought it from at best $1500 a month to $13,000. After I left, the owner sold it and the new guys totally rehabbed it with new mansards and paint, brick redone, new lighting and vacs, all new equipment and changer - they can't get it over $7,000 a month. There's no new competition.

 

[Earl Weiss]

At the end of the day stuff needs to work and the place needs to be reasonably clean. However, if a place has been neglected there is some bad "Juju' to overcome. One of the ways to let customers know it's been fixed is by appearance changes.

 

[MEP001]

At the end of the day stuff needs to work and the place needs to be reasonably clean. However, if a place has been neglected there is some bad "Juju' to overcome. One of the ways to let customers know it's been fixed is by appearance changes.

Very true - it took about four years for my efforts to get the wash to the point it did, which was with absolutely no advertising at all. Some visual upgrades might have made it happen faster, but I really don't think that alone will affect income in the long run. One of the washes nearest us gave their place a facelift, and their bays are still all dry every time I drive by it.

 

[rph9168]

I agree. Unless the wash looks totally run down keeping it clean and well maintained are key. A fresh coat of paint and some landscaping might help add to the overall appearance but I would not go overboard. In the end the customers are looking for a wash that works well and gives them the value they look for.

 

[Kevin James]

I think you pretty much answered your own question. With a small town of only 1800 people to draw from how many more people are going to come to the only car wash with 5 miles. I highly doubt that you’ll see much of a return with such a small population base. How much of a ROI have you seen with new equipment, bill and credit card acceptance in the bays? Just keep the place clean, equipment operating and well lit. We leave the lights on during those long overcast days, looks more inviting than driving into a dark cave. But you’ve got to remember the public has a pretty low option of the car wash industry

 

[MEP001]

With a small town of only 1800 people to draw from how many more people are going to come to the only car wash with 5 miles.

I used to help someone with a wash where the owner understood the value of running it properly. I would routinely have his customers come up to me and tell me they drove from a town ten miles away to use his, mainly because the soaps and pressures were better. Both washes were kept clean, but the one 10 miles away had a stingy owner.

 

[Kevin James]

I used to help someone with a wash where the owner understood the value of running it properly. I would routinely have his customers come up to me and tell me they drove from a town ten miles away to use his, mainly because the soaps and pressures were better. Both washes were kept clean, but the one 10 miles away had a stingy owner.

I highly doubt that someone would drive 10 miles for the sole propose of washing their car, they must have been on their way somewhere else. That’s almost as ridiculous as someone driving 10 miles to save .25 on a car wash. Give me a break!!!!

 

[MEP001]

I highly doubt that someone would drive 10 miles for the sole propose of washing their car, they must have been on their way somewhere else. That’s almost as ridiculous as someone driving 10 miles to save .25 on a car wash. Give me a break!!!!

You can doubt it all you want, I'm just relaying what many of his customers told me.

 

[Reds]

"I highly doubt that someone would drive 10 miles for the sole propose of washing their car,". I have a lot of customers from 10+ miles away. Some buy gift cards for themselves or family. Some folks do travel.

 

[rph9168]

We rehabbed a wash in a small town several years ago. Many of their customers came from 10+ miles driving past several other washes in the area. I realize some of that was due to lousy competition but it does show customers will drive to a wash they like to use.

 

[Earl Weiss]

I highly doubt that someone would drive 10 miles for the sole propose of washing their car, they must have been on their way somewhere else. That’s almost as ridiculous as someone driving 10 miles to save .25 on a car wash. Give me a break!!!!

10 miles is not always 10 miles..................OK, it is, but in some more rural areas 10 miles may take little more than 10 minutes by car and you may pass one similar competitpr. In an urban are you would be lucky to make it in half an hour and pass 6.

 

[jimbeaux]

I also operate in a small town. I keep it clean and operating as well as possible, but I also try to update it cosmetically every few years. I do this because I do everything possible to keep competition down. Yes, even in a small market people will jump in if they perceive any weakness in your operation. You don't have to do anything big, this year we put new landscapping in to give it a new look.

 

[robert roman]

Retail experts suggest skin package for the building at seven years out and major renovation (including equipment upgrades) at 15 years out. The building comes first because appearance has major influence on customer attraction rate.

As for ROI on appearance upgrades, you haven’t provided any values to make a calculation. So, we have to pretend.

1,800 people should max out between $70K and $100K gross sales. Say $72K for sale of argument. Assume gross net is $43,200.

$43,000 / 12 / 1.5 = $2,400

$2,400 is maximum allowable monthly payment business can support and make normal profit.

$2,400 * 12 = $28,800

$43,000 - $28,800 = $15,000

$15,000 less property tax = normal profit before taxes and depreciation (EBTD)

Assume property tax is $3,000. $15,000 - $3,000 = $12,000

$100K - $72K = $28,000

$28K is what is left in market to capture.

How much of $12,000 are you willing to place at risk to obtain at most another $28,000 in sales?

Would it be less expensive, more profitable to develop a program to get the existing customers to visit more often and spend more?

 

[Randy]

6 years ago we completely gut 2 low revenue producing, drab 1980’s car washes. Installed new equipment, coin boxes with credit card and bill validators, lighting, wall paneling, stainless vac islands with combo vac’s and vending equipment. Total investment per location was about $125K, today they do about $100 a month more than before the big remodel. The population base is around 25K for each location. There is no competition within 5 miles. Would we do it again NO!