What would you do??

[Foam]

Hi all,
I am getting into this game and I have hypothetical, but real scenario of
my development situation and I would like some feedback.
How would you set up your car wash if...

1. Free and clear, empty commercial 35,000 sqft with 170' frontage x 205' along a major arterial with 35,000 to 50000 cars daily. Half commuter, half local. 3 intersecting arterial carrying 25,000 cars each within 1-1.5 miles from the location.

2. 3 major box stores within .25 miles of the location. Warehouse store <1 mile. 2 large strip malls with 6 major anchors within .5 miles. Various smaller
stores. 2 major car dealerships with 1.1-1.5 miles. Many used car dealers
nearby.

3. High population density and good mix of homes, condos, apts.
Income = $50K or so.

4. 3 competitors +/- 2 miles radius. #1 - 60' express tunnel, 5 ss/no iba.
#2 - 6 ss/no iba. #3 gas station with older roller. Each site no room
for expansion. Nothing < 2 miles.

5. Money isn't an issue due to great relationship with bank and excellent credit. "Pre-approved" and funded.

6. Land is mostly all developed and very, very expensive. Barrier to entry
is very high. Speed limit is 35.

Hard to pin point "capture" rate (?), so hard to figure how many customers
I need to service. I consider this property an A++ property.

I have my own ideas, but would like to hear others, considering cost,
throughput, volume, etc...

Thanks!

Foam

 

[bigleo48]

Foam,

Usually you don't want to divulge your location, but if you own it free and clear, then you may want to do this.

If you add a google map address we can use arial, birds eye and street mode to have a look around at your lot and the competition. That would allow us to get a much better sense of the landscape.

 

[soapy]

Access on and off the property is also a key factor. Corner lots are best.

 

[robert roman]

If you have managed to convince a bank to pre-approve and give you a funding commitment for a new carwash project without any formal analysis, I can think of at least three possible ways to proceed.

1) Just go ahead and build the thing, taking your chances because the bank is obviously convinced you can't lose.

2) Any equipment distributor can provide you with capture rates, pro forma, quotations as well as the answers you want to hear.

3) Find an independent consultant to help you conduct a feasibility study before you spend a lot of money on the venture.

 

[Waxman]

When a person gets into any business venture, they need to study the industry and the marketplace exhaustively.

Having a good site and financing are key elements but they aren't everything.

Lots of outsiders look at the carwash business as one that runs itself. It does not. If you want to be a success, you need to do research and study the carwash business. Maybe even (GASP) work at a carwash like what you intend to build and see what it's like; what it takes to produce a clean car, what customers expect, how it is to keep clean and maintained and fully functioning, what are the problems of the business, what are the seasons or business cycles, fixed and variable costs, etc.

I researched many years while running a busy, stand alone detail shop. I went to trade shows, read all I could on the business and worked part time at a wash while running my own detail shop simultaneously.

Then I built my place. Guess what? I STILL made many mistakes, mis-steps and miscalculations! Imagine that.

So, even though you have financing and a great spot (so you think), I think you owe it to yourself, the bank and your potential customers to dig in and perform your due diligence and find another wash to work at while you pencil out your business plan, complete with 3 years pro formas, marketing plan and story.

Good luck.

 

[bigleo48]

Well said Waxman...

What I like to add to that is that is that you select the land for a carwash, not "I have land and I'll build a carwash on it" Hardly ever works out well.

Also, when you want to start any business, it has to match your needs and goals. It needs to be compatible with you, your family, your skills, etc.

For me, I picked the business type (carwashing of course), the market that needed it (2 years DD), found the land and built the wash. I also had most of the skill sets and my wife is an accountant. You need to be able to understand and fix electrical (multiphase high tension power to low voltage controls), plumbing (high, low), computer/networking (IBAs are computer and PLC controlled, cameras systems, etc), mechanical (gear boxes, motors, etc).

This past week I had to replace a boiler outright, fix two others, replace a door air cylinder, plow the lot twice, thaw out a boom, reseal bottom of two doors, do payroll, order stuff...and I have a full time attendant.

 

[Buzzie8]

I am not sure if you are asking whether the location you discussed is good for a car wash or what is involved in being in the business. At first glance, the property sounds like it has many good attributes. I am not sure that you want to put a car wash on a "very expensive" property. If you do, you better make sure that you know what this business is all about. I have punch list of repairs or upgrades that never seems to go away. Make sure the property you are proposing is "best used" as a car wash. If you already own the property, banks, pharmacies, and fast food chains pay a good buck for hard corners. You might want to see if you can market it to one of these or a local developer that represents these companies. If you are buying the property I would be real curious of the purchase price. The land costs can make or break the overall cash flow of a new modern car wash.

 

[Rudy]

I had a friend that built a 3/2 in a WalMart outparcel. It looked like a home run/no brainer.

It almost ruined him. The wash didn't even meet 1/2 what the pro forma projected.

Best wishes.

 

[Foam]

Hey all,
Thanks for the advice. When I asked my questions, it was from the banks POV
and feasibility analysis, but as others pointed out, this is just the beginning. I am
figuring at least 2 years before I can build. Lots of due diligence ahead.

One part that I really took heart is to remember,

"What I like to add to that is that is that you select the land for a carwash, not "I have land and I'll build a carwash on it" Hardly ever works out well."

Thanks again,

Foam