After having been in the sales and service sector for more years than I care to think about, I sold that business and bought a five bay with an automatic. It has been eye opening, and somewhat discouraging. The place is about 16 years old and has had 5 owners, none of whom really knew what they were doing. It has been serviced and somewhat refurbished by all of the major players. People that you would expect to have competent techs. I knew it would take a lot of work but not quite this much. Everything that I have looked at has been, not just wrong, but approaching weapons grade stupidity. Some of the techs who worked on this MIGHT have known their machines, but none knew about all of the other stuff that lurks in the equipment room. And I don’t see it getting much better. The automatics are getting more complicated exponentially, and with the flurry of activity with express exterior, who will service this. I think this is one of the reasons so many self serves are pieces of horse excrement. If you can’t do most of the maintenance it won’t be easy or pretty. For me this has helped my wash. There isn’t another within my marketing area that runs a good place. I know because my customers tell me that, and that’s a good feeling.
Snapshot of the state of our industry.
- Thread starter mac
- Start date
I hate to say this Mac but the Self-Serve business model is a slowly dying business. The number of self-serve car washes is in a slow decline across the US. There are more self-serve car washes being closed and the land repurposed for something else than there are new self-serve car washes being built. I attributed this to the changes in the public’s perception of the self-serve car wash, the high land costs, high construction costs and the low rate of return for most self-serve car washes. Look at the high number of car wash distributors and equipment manufactures that have closed their doors in the last couple of years and the ones that are struggling to hang on, what does that tell you, it tells me that the self-serve car wash industry is a dying industry. The ICA association has all but totally abandoned the self-serve car wash side of the association. The last ICA convention was almost all express and tunnel car washes.
Greg Pack
Wash Weenie
Randy, I agree the SS market will never be what it once was. The silver lining is that the good operators who can hang around will do better because of attrition. At my main wash my SS is doing better than it ever has, because everyone else has shut down or converted to a tunnel.
New Washdog
Active member
I haven't been in the wash business long but I believe the days of a SS wash as a stand alone business is over. The fixed costs (real estate, taxes etc.) are just to high.
But I also believe there will always be a market for SS. We have a four bay site, three of which house IBA's. We just added a SS to an empty bay that used to do detailing and it was a great decision. Our only real SS competition has a poor reputation due to the equipment frequently not functioning as it should, and an operator who doesn't care. So we priced ourselves accordingly. If one is looking for the cheapest wash they go to my competition. If you want a clean, safe, functioning wash with customer service they come to us.
But I also believe there will always be a market for SS. We have a four bay site, three of which house IBA's. We just added a SS to an empty bay that used to do detailing and it was a great decision. Our only real SS competition has a poor reputation due to the equipment frequently not functioning as it should, and an operator who doesn't care. So we priced ourselves accordingly. If one is looking for the cheapest wash they go to my competition. If you want a clean, safe, functioning wash with customer service they come to us.
MEP001
Well-known member
Same here, a year ago my closest competition sold out to what is now a 7/11. I run a good wash even though it's older and ugly - what would have been a record month five years ago is now an average month. Because of land values and density around me, there's no way anyone can build another wash nearby, especially a tunnel.
soapy
Senior Member
I agree with all said. I built the last self serve in my town 16 years ago. Over 1 million invested then probably close to 2 million now to build so numbers don't add up. Express just built 1 mile away at 6 million. No way it will ever break even. Self Service requires owner hands on to survive. People playing in the millions don't want to do the work required for SS. When enough SS operators drop out we will get a premium for the bays.
My small town 3-bay car wash is representative of how different the SS market is from most others.
Over the past 10-12 years, my gross revenue has tripled. About break-even to start, now it throws off a little cash each year. In the years in-between I used the operating profits to buy new equipment and add new things like changers, glass front vending, etc. So my original investment was the purchase price, which I have bumped up another 50% over the years by plowing annual profits back in to the business to make expansions and upgrades.
Today, if I wanted to sell, I could not get nearly the $$ it would take to build a new, unproven operation starting up in some nearby location in my small town. Probably not even half of that. Despite having a proven on-going operation and profitable business. What I could sell for is probably very close to the up-front cash I used to buy it and the upgrades I have made. The "drag" on the business is the land value. It represents a significant portion of a purchase price, but by itself, provides no return on investment. Except land appreciation, which is slow in a small town.
The flip side of that is I have a ... monopoly. No one can possibly build a competing wash and hope to survive, although in some markets a fool occasionally tries to do such a thing. So my process is to keep steadily inching the prices up, and time down. I just did another price increase when I installed Cryptopay in October, and might consider another price increase before the busy season next Summer.
With the odd metrics of a SS, it almost seems a land lease is a good way to find a new operator. Lease it to them at a rate where they can make an appropriate return, and gain rent back for the use of the land. I know many folks insist upon owning the land their business is on, but I have to wonder if the lease arrangement will increase in popularity over time.
Over the past 10-12 years, my gross revenue has tripled. About break-even to start, now it throws off a little cash each year. In the years in-between I used the operating profits to buy new equipment and add new things like changers, glass front vending, etc. So my original investment was the purchase price, which I have bumped up another 50% over the years by plowing annual profits back in to the business to make expansions and upgrades.
Today, if I wanted to sell, I could not get nearly the $$ it would take to build a new, unproven operation starting up in some nearby location in my small town. Probably not even half of that. Despite having a proven on-going operation and profitable business. What I could sell for is probably very close to the up-front cash I used to buy it and the upgrades I have made. The "drag" on the business is the land value. It represents a significant portion of a purchase price, but by itself, provides no return on investment. Except land appreciation, which is slow in a small town.
The flip side of that is I have a ... monopoly. No one can possibly build a competing wash and hope to survive, although in some markets a fool occasionally tries to do such a thing. So my process is to keep steadily inching the prices up, and time down. I just did another price increase when I installed Cryptopay in October, and might consider another price increase before the busy season next Summer.
With the odd metrics of a SS, it almost seems a land lease is a good way to find a new operator. Lease it to them at a rate where they can make an appropriate return, and gain rent back for the use of the land. I know many folks insist upon owning the land their business is on, but I have to wonder if the lease arrangement will increase in popularity over time.
