Everything You Need to Know About Rehabbing a Car Wash
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Have you ever considered owning your own business? Whether you’re an aspiring entrepreneur who’s always entertained the idea or you’ve successfully managed other companies for years, the thought of owning and operating a business yourself is an exciting idea. There’s an allure to entrepreneurship that draws in millions of Americans each year. As much as 14 percent of working-age citizens are starting or running new businesses. Maybe it’s time for you to turn your desire for your own business into a reality like so many others.
If you’re confident that you want to run your own company but are uncertain of which specific industry to venture into, we encourage you to consider purchasing and rehabbing an existing car wash service. Since the early 1900s, carwashing has evolved into an industry that continues to grow. In the United States alone, there are an estimated 80,000 professional car wash locations serving over 200 million registered vehicles. As more and more consumers prefer to have their cars washed for them, they’ll need a reliable local carwash service.
As a leading manufacturer of car wash supplies, JBS Industries has interacted with hundreds of car wash owners since 1979. Not only do we provide our high-quality car wash and industrial cleaners to business owners around the nation, but we also supply products to car washes located in Canada and throughout the rest of the world. Over the years, we’ve learned a lot about the car wash industry and want to pass this information along to those who may be interested in running their own car wash.
Do you believe it’s the right time to rehab an existing carwash? JBS Industries is happy to provide you with suggestions and tips for buying and successfully operating your very own car wash service.
Benefits of Owning Your Own Business
Each year, around 600,000 new businesses are formed. Owning and operating your own company can be both a profitable business venture and a personally rewarding experience. Turning your passion into your career could make each day at work feel like you’re living your dream. No matter your reasons for aspiring to operate a successful company, owning your own business has many inherent benefits:
- You’re in control of your career: While running your own business may include a significant investment of time, money and patience, ultimately, you’re in control of most aspects of your career. You’ll determine the priorities, set the goals and decide where the business should go. You make the choice of who will work with you and share your vision. The risk will be yours, but so are the rewards. As the owner, you’re fully in control of how the business and your life will run in tandem.
- You’ll learn valuable lessons in business: As an employee working for a business, you’re given direction, guidance, and knowledge about your role in the industry. Those who are their own bosses, however, have to learn everything without direction, may not have experience as a guide and will need to give direction even in times of uncertainty. You’ll continue progressing through this learning curve, overcoming obstacles while constantly being challenged to expand your knowledge, increase your skill set and guide the business towards success.
- You’ll learn valuable life lessons, too: In addition to the vital business acumen you’ll garner, you’ll also learn about yourself. You discover new strengths and weaknesses. You’ll test your limits and push yourself to overcome adversity. As you challenge yourself to reach new levels of success, you’ll learn a lot about yourself along the way.
When you own your own business, you get to interact with your customers, give back to your community and feel a sense of pride as you build your own career. The list of benefits stretches on and on, but the best reason to start your own business is that it’s what you want to do. Instead of living with a “what-if,” you get to harness your aspirations and see them to fruition. And there’s no better time to start than the present.
Why Owning a Car Wash Is a Viable Business Venture
Where there are cars, there are car owners who need professional car washing services. Millions of cars are manufactured in the United States every year and it’s estimated that as more cars hit the roads, more carwash locations will be necessary. Choosing to purchase and rehab an existing car wash can be a successful and profitable business decision. If you’re thinking about buying a carwash, consider these points:
- Car washing services are in high demand: Each year in North America, nearly 2 billion cars are washed and Americans spend nearly 15 billion dollars on car wash services annually. There are an estimated 80,000 car wash locations on the continent and sales show that many car owners are willing to pay for convenient, high-quality service.
- It can provide a great return on investment: Even though it may be your passion, the reason you operate a business is to turn a profit. Annual revenue for each type of car wash may vary. Operating a self-serve car wash may provide $41,000 while owning an in-bay automatic car wash could generate $139,000 annually with roughly $86,000 of it becoming profit.
- It allows you to be hands-on with your business: Literally. If you’re the type of individual who enjoys putting in an honest day’s work, you may opt to be present on-site throughout the day. You can chat with clients, promote an inviting atmosphere and strengthen your bonds with your community. You can also handwash vehicles yourself, showing your customers just how hard you’re willing to work to earn their patronage.
- You can be hands-off as well: One great benefit to owning certain types of car washes is that it can be ideal for remote or absentee ownership. If you own a low-maintenance carwash or have a dedicated team of employees managing the location, you may not need to physically step onto the property. This is appealing for those who may want to manage the “big picture” of the business while entrusting others to oversee the day-to-day operations.
Small business owners operate nearly 90 percent of all car washes. However, around 37 percent of car wash owners have not yet owned their business for longer than five years, making this encouraging venture a potentially profitable undertaking without prior business or ownership experience needed to succeed. Your success in this operation, particularly concerning profit and revenue, will be dependent on a number of factors — chief among them which type of car wash you choose to manage.
Types of Car Washes
Before you decide to purchase an existing car wash, it’s important to determine which type of car wash you wish to operate. Although all carwashes achieve the same goal — a clean vehicle and a satisfied customer — each type of carwash are unique. Their differences in abilities, features and operational necessities will factor into your workload, costs, profits and time spent working for or managing the business.
We’ll focus on four different types of traditional car washes and exclude mobile car washing services, in which a company visits an individual home to clean or detail a vehicle on private property.
1. Full-Service Car Washes
Though it comparatively has the smallest number of facilities nationwide, the full-service car wash can potentially provide the best cleaning and detailing for a customer’s vehicle. Employees of the facility hand-wash the exterior of each vehicle thoroughly and will also vacuum the vehicle’s interior. This method may require more physical labor and general maintenance. However, it allows the car to be cleaned to the customer’s specific standards and offers the owner and employees the opportunity to connect with their clientele.
2. In-Bay Automatic Car Washes
Automatic in-bay car washes are by far the most prevalent type of car wash in our country. With nearly 60,000 facilities located from coast to coast, this common service was designed to be operated without an attendant. A quick, convenient and inexpensive way to get a vehicle clean, customers have been using this service since the 1960s. The in-bay automatic car wash can offer a variety of wash options that the customer pre-selects. It may feature transparent bay windows that allow onlookers to view each car being washed.
At a rate of $6.34 per car, with $4.35 being profit, an estimated 20,000 cars are annually washed by in-bay automatics. The revenue generated over the year averages $139,000, of which the owner earns $86,531 in profit.
3. Self-Service Car Washes
These car washes allow the customer to manually clean their own vehicles using the supplies and equipment your location provides. Although in-bay automatic car washes are much more common, self-service facilities continue to be popular among customers who prefer to detail their car themselves. The 36,000 facilities around the country offer car owners the ability to wash their exterior and may also feature options for vacuuming their car interiors.
The self-service car washes may have a varying number of available bays for customers to use. As an example, a two-bay facility will earn an average monthly revenue of $1,489, which brings the annual average revenue for both bays combined to $41,000.
4. Exterior Conveyer Car Washes
Also known as tunnel car washes, an exterior conveyer car wash is similar to the in-bay automatic car wash. Both require the driver to pull into an enclosed area to begin the wash process. However, the tunnel car wash pulls the car along a conveyor belt which features stages performing different cleaning functions. There are a little over 10,000 exterior conveyer car washes throughout the country.
Tunnel car washes will see an average rate of 45,750 cars per year, charging an average of $15 per wash. The total average revenue of the operation amounts to $686,250.
What to Look for in an Existing Car Wash
As you begin to investigate the existing car washes available for purchase, you’ll need an understanding of the factors that will increase your chances of success. The following considerations will help you identify whether or not the facility you’re considering would offer the most benefits:
1. Local Location
The location of your car wash is one of the most important factors in its success. Preferably, your car wash will be located at least five miles from the nearest competitor on a heavily-trafficked road. You plot of land should also be large enough to conveniently support a multitude of customers without causing congestion in the lot or disrupting traffic flow.
You’ll also want to consider the visibility of the location. Many customers choose to get their car washed on impulse, which means you’ll want your business to be clearly visible on their commute. Consider what current or potential future neighbors your facility will have. Great locations for car washes are areas in which there are other fast and convenient services available, such as fast food restaurants, vehicle service centers and retail establishments. Also, keep in mind that slower traffic speeds will deliver higher volumes of customers.
2. Geographical Location
Weather will play a factor in the success of your car wash operation. If you live in a region that experiences all four yearly seasons, you may notice the demand for car washes rises and falls accordingly. Winter is highest at 32 percent, summer and spring have the same demand at 25 percent and the fall sees the lowest at 18 percent.
Significant weather events may also impact sales. While the winter season may experience a higher demand, areas that see severe snowstorms may not frequent car washes. During times of heavy rainfall or droughts, car washes may also see a decrease in sales. Operating a car wash in rainy Seattle, snowy Fargo and sunny Orlando will each yield different seasonal success rates.
Although an existing car wash may have a desirable location, the reputation of its previous owner may follow you as you take over. Customer service can mean the difference between gaining a loyal customer or losing one for good. Poor customer service costs businesses money. Because word-of-mouth recommendations can influence up to 50 percent of purchasing decisions, it’s important that you invest in a facility that has a positive reputation or be prepared to work towards repairing that reputation in the eyes of your customers.
Costs of Operating the Car Wash
Prior to buying and rehabbing a car wash, you’ll need to be aware of the operating costs associated with the average facility. Budgeting for these necessary expenses before you begin investing in the rehab can help ensure that you are financially prepared to run and maintain the car wash should you be faced with an initial shortage of sales.
- Equipment expenses: All types of car washes will require vital pieces of equipment to adequately serve your customers. A water and washing system, as well as cleaning chemicals and dryers, are needed. You may also need vacuums, towels, brushes, and blowers. If your car wash is unattended, you’ll need to invest in a reliable payment processing system for your clients to use. These items will vary in cost. Self-serve equipment may require up to $10,000 per bay while automatic units and building costs could reach above $50,000.
- Maintenance expenses: Maintenance is not a chore. It’s an investment. Failing to provide proper maintenance and upkeep of your equipment can cost you thousands in the long run. For instance, the total cost related to a hydraulic hose breakdown amounts to $1,160. However, replacing an old or deteriorating hose as a preventative measure may only cost $360. Being aware of the condition of all your equipment, including routine detailed checks of potential points of failure, could save you from excessive repair and replacement costs.
- Hiring expenses: Automatic in-bay car washes may not require an attendant, but you should budget for a rate of $20 per hour for a qualified technician to service your facility. For a car wash facility that will require full-time staffing, you’ll require a team of employees. A tunnel car wash will require four employees while a full-service operation will need at least a dozen individuals and possibly more.
- Marketing expenses: On average, a small business that earns a yearly revenue of fewer than five million dollars should be prepared to devote at least seven to eight percent of their revenues to marketing. These costs should cover both brand development and business promotion.
- Variable costs: Every business will need to consider the costs of utilities — especially car washes. Electricity, water, and natural gas are three vital resources that may fluctuate depending on the time of year and frequency of customers. On average, expect to spend roughly $.50 per car for electricity, $.12 per car for natural gas and $.16 per car for water.
Costs to Rehab a Car Wash
Rehabbing a small business involves many variables. Once you purchase a car wash, you’ll likely need to perform some form of rehab on the equipment, the facility or the property. Although your costs will vary based on the facility you choose to purchase, you’ll want to initially consider the following items in your rehab budget:
Four Tips for Rehabbing and Operating a Successful Car Wash
JBS Industries believes in helping car wash owners succeed. Our website contains valuable tips and helpful advice for those thinking about buying a car wash. The following tips are four suggestions we believe will help any carwash owner increase their business:
- Know your competition: To better define your strengths and opportunities for improvement, it’s helpful to understand how your business differentiates from those surrounding you. You can then determine what your competitive advantages are, target the optimal marketplace and continue to stand out among other car washes.
- Make sure your location is inviting: Customers may turn away from your car wash if the area is hard to access, gets easily congested or appears to be dilapidated. Keep the area around your business easy to navigate by performing necessary parking lot maintenance, keeping the space convenient and easy to navigate and by keeping your business and marquee sign clearly visible.
- Surround yourself with a supportive team: You may have started this endeavor on your own, but you are not alone when it comes to successfully running your car wash. Positive morale will benefit your business by reducing turnover and increasing productivity. You’ll also want to develop positive relationships with your product suppliers, equipment providers, and maintenance technicians.
- Don’t hesitate to seek out advice: Remember that you’re not the first business owner to rehab a car wash and you certainly won’t be the last. There are plenty of new and experienced carwash owners who would be happy to answer your questions and provide you with practical advice.
JBS Is Here to Help You Take the Next Steps
JBS Industries wants to help new and seasoned entrepreneurs successfully purchase and rehab an existing car wash. Our decades of experience working with all types of car wash facilities around the globe has given us a wealth of knowledge about the industry and the challenges associated with owning and operating a car wash. We’re happy to offer our resources and information to those who would like advice on buying a car wash.
Whether you’re looking for innovative cleaning solutions from a worldwide chemical supplier or helpful tips for starting a car wash, we’re available to offer you the highest-quality products and unmatched customer service you need to succeed. Call us today and discover why JBS really is Just Better Soap.