NewWasher
New member
2-4 times net income that is.
Hello everyone My name is Jay and live in S. Calif. I have been reading a lot of good info on this forum for the past few days and came across a post where car washes should sell for 2-3 times net income and that the days of 6 are over. In S. Calif I have not found one yet that is below 6. All of them are in the 7-10 range. I am looking for a Car wash business that pulls at least $300K net income per year with at least 25% profit and find it very difficult to justify a purchase of one for $2.1 - $3 Million. there are so many other businesses out there for 2-3 times. What drives me still to purchasing a car wash is that relatively speaking it is not as complicated as some of the other businesses.
I have noticed though there are a lot of car washes for sale. I believe this is because of the high appreciation of the car wash business during the past few years and rising fuel costs. I am inclined to wait 6-12 months to see if the prices drop. There are so many for sale and way few buyers so basic economics says the industry is in for a major price drop. I am trying to test the 2-4 theory. Would anyone sell for that multiple?
As a side note I did find one with a aprox. 4.5 multiple:
Price Reduced!
Low Rent!
Down Payment 1,000,000
Annual Revenue: 850000
Annual Net Income: 360000
Average Monthly Gross Income: 70000
Average Monthly Net Income: 30000-35000
Establish: 7yrs
Own: 4yrs
Size: 8000sq
Lot: 26000sq
Rent: 4975/Month Cam 800
Lease: 29yrs
Payroll: Approximately 33-35% Of Gross Income
Very Stable And High Profit Employee Run Business.
Seller Installed Oil & Lube Service On March, 2008 And The Gross Income Increased 10,000
What do you guys think of that with just the info above? I am meeting the owner later this week and this is the only info I have so far. Any other comments to help would be appreciated. Will give more info as I find out myself.
Hello everyone My name is Jay and live in S. Calif. I have been reading a lot of good info on this forum for the past few days and came across a post where car washes should sell for 2-3 times net income and that the days of 6 are over. In S. Calif I have not found one yet that is below 6. All of them are in the 7-10 range. I am looking for a Car wash business that pulls at least $300K net income per year with at least 25% profit and find it very difficult to justify a purchase of one for $2.1 - $3 Million. there are so many other businesses out there for 2-3 times. What drives me still to purchasing a car wash is that relatively speaking it is not as complicated as some of the other businesses.
I have noticed though there are a lot of car washes for sale. I believe this is because of the high appreciation of the car wash business during the past few years and rising fuel costs. I am inclined to wait 6-12 months to see if the prices drop. There are so many for sale and way few buyers so basic economics says the industry is in for a major price drop. I am trying to test the 2-4 theory. Would anyone sell for that multiple?
As a side note I did find one with a aprox. 4.5 multiple:
Price Reduced!
Low Rent!
Down Payment 1,000,000
Annual Revenue: 850000
Annual Net Income: 360000
Average Monthly Gross Income: 70000
Average Monthly Net Income: 30000-35000
Establish: 7yrs
Own: 4yrs
Size: 8000sq
Lot: 26000sq
Rent: 4975/Month Cam 800
Lease: 29yrs
Payroll: Approximately 33-35% Of Gross Income
Very Stable And High Profit Employee Run Business.
Seller Installed Oil & Lube Service On March, 2008 And The Gross Income Increased 10,000
What do you guys think of that with just the info above? I am meeting the owner later this week and this is the only info I have so far. Any other comments to help would be appreciated. Will give more info as I find out myself.
