To Convey, or not to Convey.....HELP!

[bbeach11]

My family and I have been in the carwash business a couple of years now...5 SS bays, 1 IBA. We're doing OK even in this sluggish economy, but we want to do better. We get quite a few customers who drive in to use the IBA, and if there's a line of even 1-2 cars, they turn around and leave b/c it's gonna be a 20 min wait to use the bay. We are thinking we want to tear out our IBA and install a conveyer esterior express wash to help with this problem, but keeping the SS bays to capture more of our market. Traffic count is about 20,000-25,000 cars a day according to whose data you believe. We're in a community that is a growing, middle class, blue collar area of town that's geographically about 3miles outside a city of 200,000 people. We are approx. 1/2 mile from a major interstate exit that the state is currently building which leads us to expect even more growth in our area. Problem is, there's a carwash franchise about 6 miles away from me getting in to town that's a 120 ft tunnel that's doing very well. Their wash is OK at best, but since they're the only game around, they get all the business. Granted, they do have a location that's pulling a car count of 35000-40,000cars per day, but I'm just trying to capture the rural people as they are coming in to town or leaving town coming back home. We were thinking of a 100ft tunnel to at least try to compete with the customer perception that the longer the tunnel, the better the wash(since many have been going to the 120ft franchise tunnel down the road)....gonna spend anywhere from $700,000-800,000 remodeling and buying all new equipment...Are we crazy for thinking we can make this thing work?? All input from anyone with experience would be greatly appreciated.

 

[robert roman]

Ben,

Although you posed great questions, they are actually quite difficult to answer concisely in this venue.

“My family and I have …. (1 IBA, 5 SS bays) and we're doing OK, but we want to do better.” What do you mean by “doing OK?” Are you slightly above, slightly below or at industry averages? What do you mean by “want to better” - increase volumes, average sales and profits and by how much?

“We have an issue…. if there's a line of even 1-2 cars, they're turning around and leaving….” This has become a great concern for many service businesses today. People that have money to spend and that have decided to spend it don’t want to wait to spend it.

“We are thinking about…. putting in an exterior express conveyer wash to help alleviate this problem.” A conveyor has more capacity than in-bay in terms of linear feet. However, without knowing all the facts, it may or may not be the optimal choice.

“Problem is, we have a franchise conveyer wash (120 ft tunnel) about 6 miles away that is doing well.” The trade area for support services like carwash, gas/c-store, etc. is usually about 2 to 3 miles. So, it would appear the conveyor is beyond the range of your store.

“Their wash is OK at best, not …. friendly…. "give us your money, hurry and wash your car, and leave!" Typically, but not always, this suggests absentee owner. If so, this is the best type of competition.

"We're gonna spend anywhere from $700,000-800,000” “Are we absolutely crazy….? Truly crazy people rarely question their sanity. However, without knowing the facts, it is impossible to answer the question of spending meaningfully.

“What is the default rate on these types of carwashes?” Since the carwash industry is basically unregulated, only the equipment manufacturers and their dealers know the secrets that surround this question.

Without competition, firms are able to achieve above average profits. In the presence of competition, the market normalizes and owners should expect average profits. When markets mature and saturate with stores, owners tend to compete aggressively and profits fall below average. So, the default rate of carwash is a function of its particular market.

Hope this helps

 

[bigleo48]

We get quite a few customers who drive in to use the IBA, and if there's a line of even 1-2 cars, they turn around and leave b/c it's gonna be a 20 min wait to use the bay.

First, how about speeding up your IBA? Not sure what kind of machine you have and how it's setup, but we average 4 min per wash.

 

[I.B. Washincars]

I have never heard a customer mention tunnel length, ever. I think that is equipment suppliers and other wash owners perception. I've asked customers about whether a wash was a tunnel or not and get a blank look. I then proceed to ask if the car sits still or moves down a conveyor and they seem to have to think a second or so before they can even answer that. They don't care whether it is a tunnel or IBA, only that their car gets clean. Tunnel proponents often state that "Customers expect more from a tunnel" and that it is superior to an IBA. I say that's a load of BS or they wouldn't have to undercut IBA pricing to compete.

 

[tobaccofarmer]

The customers that you see leave, where do you think they go instead? Do they come back at a later time? Do they go to another similar automatic? answering these questions could help make your decision!

 

[robert roman]

Looking for incremental gains, say one or two cars more an hour, from an in-bay that has been engineered to produce a certain finished quality in a specific amount of time(s) is usually fruitless in terms of making a meaningful impact on the average waiting time or average length of the waiting line. If you take the time to evaluate the math involved in solving for a single server queue, you will find this to be true.

Carwash isn’t the same for all consumers. For instance, in the Red Bank area of New Jersey, in-bays are not very popular because most consumers view gas stations (where most in-bays are located) as filthy places where folks want to spend as little time as possible.

Unfortunately, with the exception of hypermarkets, many people in this country tend to associate “bigger” stores as being better stores. Of course, this is not true in all cases. However, a modern 80’ tunnel, for example, can be made to produce hand-finished qualities, in numbers. An in-bay can be made to produce hand-finished qualities, but not in numbers approaching a conveyor.

It doesn’t matter where customers go when they leave or if they come back. You cannot make up today’s lost business tomorrow.

 

[Washmee]

I have never heard a customer mention tunnel length, ever. I think that is equipment suppliers and other wash owners perception. I've asked customers about whether a wash was a tunnel or not and get a blank look. I then proceed to ask if the car sits still or moves down a conveyor and they seem to have to think a second or so before they can even answer that. They don't care whether it is a tunnel or IBA, only that their car gets clean. Tunnel proponents often state that "Customers expect more from a tunnel" and that it is superior to an IBA. I say that's a load of BS or they wouldn't have to undercut IBA pricing to compete.

Quality comparisons between IBAs and tunnels is not the issue here. The entire car wash business is based on capacity, or should I say unused capacity. Just like the old saying, you have to make hay when the sun is shining. The reason tunnels can price lower than an IBA, is because they truly can make up the difference on volume.

 

[bbeach11]

Thanks everyone for all the insight. I did think about speeding up my washes, and my cheapest wash is only a 4 min wash....but my best wash is an 8 min wash. And I want to give the best quality wash, leaving no soap or residue behind, and that takes a little more time. But I think having our IBA unattended, which most people do, is a deterrent for a lot of women and older people. Even when we are there, we're still having to guide people on the treddle, making sure they're in the wash straight, etc. Having a conveyer wash is gonna make us hire someone to be there at all times, and I'm a firm believer that customers really like that. Our quality of wash isn't a problem at all..we provide a very good wash at a lower price than our competitors, but we just can't wash them as fast. And when people drive by our conveyer competitor, they see all the cars and just assume something better is going on. Does my traffic count of 20,000 to 25,000 cars/day seem to be enough to support a 100 ft tunnel? Am I taking too much a risk?
Once again, thanks for your input.

 

[bbeach11]

Right now we're washing, on avg, about 25 cars/day ($8.50 ticket) and if we do the tunnel, we're gonna need to wash an avg of 80 cars/day ($8.00 ticket) to break even...can we do this with our traffic count??..

 

[robert roman]

If the goal and objective is only to wash more cars, I can’t help you anymore than I have. So, my suggestion is to contact an equipment dealer. This way you can use several demographic variables, a traffic count and a price to confirm your decision to install an $800,000 conveyor. Good luck.

 

[rph9168]

Depending on your site you may want to consider a short tunnel. It should cost much less and should easily handle the volume you are projecting.

 

[JMMUSTANG]

Right now we're washing, on avg, about 25 cars/day ($8.50 ticket) and if we do the tunnel, we're gonna need to wash an avg of 80 cars/day ($8.00 ticket) to break even...can we do this with our traffic count??..

I guess my first comment is what is your aggregate cost of build out.
Does the $800,000 cost include the cost that is left over from the IBA.
I would bet at 20 cars per day and only being open a few years you haven't paid the IBA off yet.
So you have to figure you'll still be making payments on equipment that is no longer in existence at your location. I would make sure you include that in your estimates.
80 cars per day is definitely doable.
If you're equating that out by 30 days per month that's 2,400 cars but you have to remember you most likely won't be open 30 days do to rain, snow etc. I would be figuring an average of 25 days would be safe.
It will take time but if you put out a clean/dry car, if you have free vacs, etc. you could wash much more than that on a busy day.
As rph9168 suggested you might want to look into a smaller tunnel. The cost reduction might be substantial.
By the way your work schedule will definitely change from a self service.
In the beginning and for some time thereafter YOU will be working all the open hours, 7 days a week until you can afford to pay employees and taxes on them.

 

[bbeach11]

Everything has already been paid off...we don't owe anything on the wash or any equipment we've bought. The $800,000 figure is for remodeling and new equipment for the tunnel. I thought about making the tunnel shorter, but I just dont want to look back and kick myself for not making it longer. It seems like all the owner/operators I've talked to with the shorter tunnels wish they would've gone bigger. I have the space and the money, but I just dont want to make a bad investment if we can't even wash enough cars to pay the note. So a traffic count of 20,000-25,000 cars/day should be able to support at least 80 cars per day to use the wash? All the equipment reps we've talked to have forcasted anywhere from 120-200 cars per day is what we should average. One rep even said 250 cars/day...but I know most of these guys are making the proformas look good so I'll buy their equipment. I just wanted to know what you guys thought, since most of you are in the "heat of the battle" day in and day out!

 

[Ric]

At 25 cars per day you have not yet maxed out your iba. Maybe put an attendant on site with a goal of 50 cars per day? If you can do that then a tunnel may make sense. Your iba is doing under 10k cars per year. I'd be hesitant to make the jump to a tunnel based on those numbers.

 

[DixieCarWash]

http://www.sonnysdirect.com/t-Types-of-car-wash-Honey-I-Shrunk-the-Conveyor.aspx

http://www.youtube.com/watch?v=V8r75HlxbHI
http://www.youtube.com/watch?v=uf9asOb3qr0&feature=related
This sounds like what your intrested in.

I'm more familiar with the conveyorized tunnel market. Thing about inbays is you can speed them up but from what I've seen they can only run at a certain rate or you will start having issues. Conveyorized tunnels are somewhat more flexible in that you can adjust the conveyor speed for higher volume and not have to adjust much of anything else. But with inbay automatics you might have to compromise on some things. Don't do it right you'll end up with a sloppy job. And this is what customers pay attention to. At least that's what I think.