The Neverending Bad Weather Now Continues For Nearly 2 Years

[wardaddy]

We have been getting absolutely creamed by the cloud cover and rain patterns here in Middle Tennessee being the exact inverse of normal since November of 2007 and it only looks to get worse in this wet cloudy Dublin summer that never was we're having

This is my 3rd thread post on this now over 20 months and still it continues.

Every wash I know of is losing money now for the second year, only those with no debt are making any money

We are laying off. Going to cheap powder-wheel cleaner cocktails for auto pre-soak instead of fancy barrel stuff, dropping insurance to loan amount and so forth just to survive....refinancing...putting in more and more personal cash



This includes combos, tunnels etc.

Most were down 25% or so in 2008 and now some are down another 30% in 2009 from that even....it feels like folks just don't want to wash anymore ..

I have 7 washes.....12 rollovers, 36 ss bays, beaucoup vacuums and one high end wash only tunnel that I run slow and with plenty of chem goodies bathed on...not an express gimmick and my revenue is now about like it would have been with only 5 combo washes




probably 15 percent of the area's washes are in trouble, reselling, foreclosure, quicksale or something

if it ever turns around it will have thinned many washes especially high to build tunnels but then someone will get them cheaper

old car washes never die, they just get bought again cheaper or built over

between the weather and absolutely idiotic overbuilding by very very stupid unimaginative folks building impossible express tunnels on top of one another, this business has become not much fun.....I would advise no one with a brain to build a start up wash...maybe buying a fixer up on the skids in a good spot but a tunr key from scratch around here would take more juevos than I have and mine used to be wheelbarrow sized

don't know what it's like where you are but in Nashville it sucks..like ice to eskimos

 

[vinh]

I have a wash in North Alabama so we share same weather pattern. It has rain during weekends and May seemed like in rain all month. My numbers are for sure down probably 10-20% from last year. I hope there are better days ahead for you and me. If that is a picture of your wife than at least you have someone beautiful to go home to when your workday is done.

 

[robert roman]

According to the experts, 70% of businesses have weather risk. Dealing with one or two years of abnormally bad weather is difficult because a carwash owner cannot influence the weather.

There is also little an operator can do about the lack of stewardship that leads to over-building a market. After all, money has never been a prerequisite for common sense in this industry.

However, carwash operators do have control over their business model. Since you operate multiple sites in an over-crowded market, perhaps it is time to rethink your business model and strategy.

The weather will eventually get better. However, when it does, you will still be faced with the same over-crowded environment. Will good weather alone be enough to offset the competition?

 

[wardaddy]

Robert Roman,

with all due respect I don't think you are quite getting what I am talking about...sure the weather will turn around..one day who knows, it's only been two years of this...this is like no one has ever seen ..including folks who have been in the business since the 50s, this is not just a few extra rain days here and there...this has been totally upside down since November of 2007 following an incredibly hot and dry summer 2007

and it is not happening all over the south...just the mid TN valley, it hasn't happened in Birmingham so I'm told nor in Mississippi or lower Alabama or Georgia or anywhere else in the South...just in the Mid TN valley from extreme north Alabama and maybe into lower Kentucky

Our cloud cover and rain days have gone from 22% as the norm to over 80 % for two years now

Our rain out weekend is now 5-6 or more weekend days versus 1-2 weekend days/month and on occasion we have lost every weekend day in month, I have never seen that before in my 52 years. This past May it rained or clouded over 28 days of that month...can you imagine that?

We had as much or more rain and cloud cover than Seattle and Portland these past two years.

This is not just a little drier summer for farmers sorta thing. This is where farmers would be getting disaster relief already last year.

 

[Earl Weiss]

FWIW Chicago - Jan. June. Wettest 6 months since records have been kept. This follows bad 2008 and 2007.

 

[bigleo48]

Wardayy,

I feel your pain. Up here in the Great Lakes/North West, July has been horrific. Have gotten x3 the normal amounts of rain for July. Sales down by 1/2 of last year

It's been very frustrating month...I can't imagine 20 months!

Perhaps the silver lining is a shift in weather after a thinning out the herd.

Big

 

[soapy]

Here in Idaho we were off 100 sunny days last year compared to a normal year. So far this year we have already received our full year of rain by the end of June. June was almost 5X the normal precip with 21 straight days of rain. Seems like certain pockets of the country are really getting bad weather patterns.

 

[wardaddy]

Wardayy,

I feel your pain. Up here in the Great Lakes/North West, July has been horrific. Have gotten x3 the normal amounts of rain for July. Sales down by 1/2 of last year

It's been very frustrating month...I can't imagine 20 months!

Perhaps the silver lining is a shift in weather after a thinning out the herd.

Big

the herd is definitely thinning here....or more likely now just new owners who got in cheaper on short sales and foreclosures

those of us with "other cash" are spending it to stay alive, those without are belly up

July looks to be as bad as May was now, we had only around one week of less than mostly cloudy and lost 3 of 4 saturdays and all sundays this month...we will close out the month with all mostly cloudy and 40-70% rain...I am not exaggerating when I say we have seen our clear to slightly cloudy wash days decline by nearly 3/4 the past 20 months ...we are lucky to only be down one third...many here are down a half or more

 

[Reds]

Regarding Robert Roman's comments. I agree that overbuilding is the #1 issue impacting most markets. Weather is the straw that's breaking the camels back. And the economy sure isn't helping. We have had a terrible streak of bad carwashing weather in my area too. I thought that last year was bad (weather wise) but this year is just as bad or worse. Fortunately my area is not overbuilt -- yet. When I was in the fast food biz I saw the same issues with markets getting saturated. Some chain's development strategy was/is to find a Mac's or BK and "get next to it". Then you have several stores that are sitting at the same intersection and everyone is just breaking even. If weather was a factor in that biz they would be losing money too. In the carwash biz we seem to have people who see someone is busy and think "That guy is making a fortune. I'm gonna do that too". It proves that you don't have to have brains to have money.

 

[Waxman]

We had 20 some days of rain in June here in MA, too. Not great for carwash or detail numbers!

 

[Greg Pack]

As mentioned in the post, excess car washes of all types in the market compound the problem greatly. The pie is the same size but many more operators demand a slice than five years ago. When people DO decide to wash their business is split many more ways than it used to be. I don't see long lines at any IBAs anymore in the area.

New investors have shunned the SS model and have pursued exclusively the Express model. Expresses here have gone everywhere. There is one stretch with about 50K car count where three expresses have been built within a block of each other- absolute madness. Most expresses here I believe are probably cash flowing, but I bet a third of the owners are dissapointed with their return and would not build if they could do it over again. Personally, I believe the Express model will ultimately win the car wash battle in populated areas- it's the self serve of the 21st century.

In addition to all this, Infrequent washing caused by bad weather patterns makes a tough hurdle for touch free IBAs

 

[robert roman]

Before I wrote my original comments, I did goggled weather history for your geographic location. So I do get the point.

I have also experienced, as a carwash owner and manager, concurrent years that contained extended periods of time when it seemed as though it would never stop raining.

In one case, the substantial change in circumstances was great enough to serve as the justification to exit a particular venture.

I am not suggesting that you get out of the business. However, almost every company, at some time during its life, faces circumstances that requires an examination of the business model and strategy. Course corrections can include retrenchment, stabilization, collaboration or growth.

An objective strategy is a function of the strengths and weakeness of a company given the environment it has to contend with.

For example, maybe one of your properties can be used for an alternative purpose or a higher and better use.

This is what I meant by considering the possibilities regarding business model and strategy.

 

[Waxman]

I'm surprised that no one within this thread has suggested or mentioned additional profit centers and cross-marketing opportunitiesto remain buoyant in tough times.

I think a detail shop, laundry, petwash, gas, lube and carwash can work well to offset the lulls in business in either profit center.

Business model is important, too. A smaller owner/operator in the proper market may fare better through up and down cycles due to relatively low debt service and flexibility with staffing.

 

[bigleo48]

Pope of Polish

I believe that regardless of weather, you should have many revenue centers as possible...I have have 11 and may move th 14. These are distinct centers, such as SS, IBA, Petwash pop machine, vacs, fragrance, air, ATM, etc.

Here are more to contemplate outside of the traditional ones; windshield washing dispenser, Bottled water dispenser. Food sales (concession trailer, coffee shop).

You can also try and differenciate yourself by offering subscriptions (monthly plans), rainy day guaranties, etc. Anything to try and get people on the lot in those very trying weather periods.

Big