SS/iba profits; what is your goal?

[motefam]

What is your goal for profits/cash flow at your your ss/iba (I'm talking about the cash left over after all expenses, before you pay income tax, rent, or debt)? So if you owned the wash and had no debt or rent, what would you take home before income taxes?
Years ago I remember guys shooting for 50% to 60% of total revenue as their take-home profit. Now it seems like I struggle to hit 35%, even though my annual sales have stayed about the same. Property taxes, utilities, stagnant prices are a few of the reasons, I guess, or maybe I'm making excuses. Is anybody still hitting 50% or more? I'm in the upper midwest.

 

[robert roman]

Over the last several years, I best I have seen for a combination self-serve is gross net 60 percent.

This excluded owner’s discretionary expenses, extraordinary and non-recurring expenses, property taxes and debt service.

I believe a better target for self-serve is gross sales and average revenue (in-bay). Reason is the way the business is being valued today.

 

[motefam]

So Robert, what sort of ebitda are most guys seeing these days for, let's say, a clean 2 iba / 4 ss doing $200k sales per year?

 

[robert roman]

50 percent is typical for most of my clients that have substantial washes but most of them generate gross sales of more than $200K.

Since Midwest has higher operating expenses during cold months, NOI of 45 percent would be a good number.

Again, the way SS is valued today the focus is on revenues not expenses.

For example, my recommendation for a 4 + 2 wash would be a target of $275,000 gross sales.

It easier to achieve cash flow goal through sales than it is trying to shave expenses.