$1.95 or $2.95 Exterior Only.

[allthis4adream1]

Am I crazy for even daring?

To sum it up:
Exterior Only. One or 2 persons would wash the exterior. Then send the car through the tunnel. Followed by another 1 or 2 persons drying a car down. That's it. Traffics High on a One Way Street. What does everyone think?

 

[E.Joramo]

Are you calculating the labor,utilities,cost of supplies,damage,and rewashes? not to mention Workmans comp insurance, general liability insurance. when something breaks and it will, who will fix it it. Don't forget the muddy people.
Erik

Am I crazy for even daring?

To sum it up:
Exterior Only. One or 2 persons would wash the exterior. Then send the car through the tunnel. Followed by another 1 or 2 persons drying a car down. That's it. Traffics High on a One Way Street. What does everyone think?

 

[Waxman]

Yes you're quite crazy.

If we all commit to keeping pricing where it needs to be to cash flow then nutsos won't be so apt to low ball everyone else and make customers think a carwash is a $2 item. It is not.

Come on!

 

[Eric H]

I still can't figure out how lowball pricing equates to a long term win.
I have not seen any $3 express washes in my area but the general consensus seems to be that they come into a market and destroy the value of the product. What happens when the other tunnels in town match your pricing? You have lost any competitive price advantage and now no one is making money. Labor quality goes down because of low pay. Preventative maintenance is put off causing higher repair bills and increasing customer damage claims. A downward spiral occurs causing the reputation of our industry to return to what it was in the '70's. A bunch of drunks running car washes that scratch cars.
You don't want to be solely responsible for all that do you?

Right now I am seeing the local gyms engaging in similar pricing. Planet Fitness came in with $10/month and some of the others in the area went down to similar pricing. The local mom and pop gym is down to $100 per year.
Jiffy Lube is now $24.99 for an oil change. I suspect others will soon follow. Next year I predict they will be reporting losses and at the very least reporting flat sales and growth.

 

[Tom Thumb]

How does the old saying go " YOU GET WHAT YOU PAY FOR "
JMO.

 

[dogwasher]

Am I crazy for even daring?

To sum it up:
Exterior Only. One or 2 persons would wash the exterior. Then send the car through the tunnel. Followed by another 1 or 2 persons drying a car down. That's it. Traffics High on a One Way Street. What does everyone think?

Why would you hand wash the car and then send it thru the tunnel fror another wash?

 

[Earl Weiss]

Why would you hand wash the car and then send it thru the tunnel fror another wash?

Ditto. Have you figured direct costs for Cleaning solutions, utilities, and wear and tear on equipment? What are they? Have you allocated a per car overhead cost basedupon expected volume? Waht is the expected volume on an annualized basis? What is the annual overhead cost. This is everything not allocated to direct cleaning costs and includes rent / debt service. real estate taxes, labor, insurance, scavenger, accounting, legal, Postage, printing, office suplies, bank charges, advertising, damage claims, supplies like tunnel cleanersmops, brooms bathroom items etc.

 

[rph9168]

At those prices you would lose money every time you washed a vehicle. This sounds like an interesting new concept for car washes. The more vehicles you wash, the more money you lose.

I know the economy is a big issue and many established businesses are running specials that they would not have dreamed of four or five years ago but the price of car washing has always been low and increases have never kept up with inflation. I do not understand why someone would want to offer lower prices unless they have no business sense or a death wish. I believe in this time as in previous times of a poor economy operators need to stress value in their approach, not lower pricing. The best way to compete for the car wash dollar is to maintain high quality and service to keep customers coming back.

 

[termn8tr]

At those prices you would lose money every time you washed a vehicle. This sounds like an interesting new concept for car washes. The more vehicles you wash, the more money you lose.

I know the economy is a big issue and many established businesses are running specials that they would not have dreamed of four or five years ago but the price of car washing has always been low and increases have never kept up with inflation. I do not understand why someone would want to offer lower prices unless they have no business sense or a death wish. I believe in this time as in previous times of a poor economy operators need to stress value in their approach, not lower pricing. The best way to compete for the car wash dollar is to maintain high quality and service to keep customers coming back.[/QUO

I couldn't agree with you anymore!!! Why is it that everyone wants to slice each other's throat, with stupid, ridiculous prices that you cannot make money. All they do is hurt this Industry.
Here in Canada cup of coffee is $1.50 for Gods sake. Large pop and popcorn $10.00 and then some. I don't understand where the logic is, to be able to get an exterior wash these days for under $7.00 in U.S.A. or Canada.

 

[Chiefs]

OK, but how do you expect to pay for your salary, labor costs, payroll taxes, water, sewer, electric, gas, chemicals, maintenance, repairs, sales, tax, property tax, and advertising? Oh and don't forget that pasky thing that liberals now hate any business to make - A PROFIT! Don't forget about the higher taxes and healthcare costs that the Messiah in Washington and his minions will be imposing on you and every American come 2011.

Do you figure that $2.95 will cover your direct costs and that you're going to retire on the profits you make on extra service sales. You really think an extra $1.50 or $2.00 a car is going. I know, maybe you'll charge extra for soap and water!

To take on the liability of washing cars and risk your financial future on this screwball bsuiness plan is a recipe for disaster for you and your family. You may want to be living for a dream but you'll be dying in a nightmare instead. All you will accomplish is the whoring of a market. Car washing is not a product, it is a service, one that should have a value commensurate with getting a haircut or drycleaning a suit - both services. Sure you can go to Great Clips for a $5.00 haircut that'll make you want to shave your butt, bend over and walk backwards. I'd rather go to say Famour Hair and pay $10-12 for a haircut that I'll value when I look in the mirror.

Oh and good luck getting financing today with no experience and a business plan designed for failure. Sorry to rain on your parade!

 

[mac]

Tried to think of something that I could add to this discussion, but could not come up with anything. The above posts tell it all. Reminds me of an old comedy routine where a guy will change a 10 dollar bill and give you a nickle extra back. When asked how he could make money doing that, he replied, "Volumn" We need to quit eating our own.

 

[robert roman]

Here is a sanity check for your express exterior idea.

Gross Sales 100%
Operating Expenses 50% of gross sales
Amortization/Rent 25% of gross sales
Profit before tax 25% of gross sales

Determine sales volume, the number cars you expect to wash in a year.

Multiple this by price or average revenue. For example,

30,000 X $2.95 = $88,500

Subtract operating expenses, should not exceed 50% of gross sales

$88,500 X 0.50 = $44,250

$88,500 minus $44,250 = $44,250 net operating income

Subtract amortization/rent, should not exceed 25% of gross sales

What's left, profit before tax = 25% of gross sales

So,if you washed 30,000 cars at $2.95 each and stayed within the parameters of the model shown above, you would anticipate profit before tax of $22,125.

Is this a living wage for you? Will it provide an adequate ROI for risk taken?

If not, how many more car washes would you need to get you there?

Answer these questions and you will be able to determine for yourself if you are crazy or not.

 

[jfmoran]

Am I crazy for even daring?

To sum it up:
Exterior Only. One or 2 persons would wash the exterior. Then send the car through the tunnel. Followed by another 1 or 2 persons drying a car down. That's it. Traffics High on a One Way Street. What does everyone think?

Unless "traffics high on a one way street" means you got 100,000 cars/day moving by your wash and you plan on washing about 200,000-300,000 cars per year, I don't think that the "the traffic" is the only one who is high... Just sayin'

 

[Earl Weiss]

Here is a sanity check for your express exterior idea.

Gross Sales 100%
Operating Expenses 50% of gross sales
Amortization/Rent 25% of gross sales
Profit before tax 25% of gross sales

.

I have a question. I understand the formula is oversimplified but, why is rent a % of sales. I understand amortization vis a vis wear and tear but not rent.

 

[Whale of a Wash]

Am i wrong or isn't this guy all this for a dream--- not even currently owning a wash. I think in an earlier post he was looking at a wash.
I can't imagine an owner coming up with $1.95 washes.

 

[robert roman]

"I can't imagine an owner coming up with $1.95 washes."

Why not? Follow the model.

200,000 cars washes per year * $1.95

Gross Sales $390,000
Less Expenses $195,000
Less Amort/Rent $97,500
Profit before tax $97,500

Now all you have to do is find a location with unmet demand for 200,000 washes and build the thing not to exceed amort/rent of $97,500 and your in business.

It even looks better at $2.95 a car.

"Am I crazy for even daring?"

 

[Earl Weiss]

"I can't imagine an owner coming up with $1.95 washes."

Why not? Follow the model.

200,000 cars washes per year * $1.95

Gross Sales $390,000
Less Expenses $195,000
Less Amort/Rent $97,500
Profit before tax $97,500

It even looks better at $2.95 a car.

"Am I crazy for even daring?"

Costs can vary widely but I think $1.00 to put a car thru the tunnel for Utilities, solutions, wear and tear is about as low as you can go. (If equip is brand new wear and tear out of pocket costs will be less for the first year.)

So, $390,000 less $200K leaves $190K
Rent will vary greatly but $100k for rent / taxes / debt service would be reasoneable.

Now you are left with $90K to cover
Labor, Ins. Scavenger, postage, phone, security, and I am sure stuff I've left out.

So, at these numbers you have little or no profit.

Now, If your base price is higher and there is ancilary income from package upgrades, vacs and vending, you may have some meat on the bone.

 

[allthis4adream1]

Folks this isn't MERELY an IDEA to amuse you all. This is happening. Criticize me, attempt to discourage me; it does not matter. Operators are practicing as so, but does it work? Any takers?

 

[Greg Pack]

"Now all you have to do is find a location with unmet demand for 200,000 washes and build the thing not to exceed amort/rent of $97,500 and your in business."

I'm assuming sarcasm is intended there?

That represents a total investment of about 1.5 million, 300 K down and balance financed over 25 years. That is at least 500K short in my area for what is cost to build a tunnel on prime property. Personally I wouldn't finance a car wash beyond 15 years because it leaves your ass stuck out there in a potential negative equity situation for a long time, but to each his own.

I guess if the stars line up just right it might could happen, but it is highly unlikely in most areas. You'd have to find a steal on property.


And I still can't relate to people willing to sink their fortunes and future on the line for a piece of special purpose property AND have a full time job for less than a 10% ROI.

 

[robert roman]

Yes, my comments were sarcastic. However, the model is a good one.

If "allthis4adream1" wants to pursue this venture, more power to him.

Will his idea work? It should as long as he can find ways to stay within the parameters of the model.

Will it work for his particular location and trade area? I would need a lot more information to answer this.