Are my memberships profitable

[Earl Weiss]

i set up a monthly/annual budget for maintenance/repair, and my profits and losses statement accounts for equipment and facility depreciation

If you want to factor how much it costs to put a car thru the tunnel , only direct incremental costs should be considered. Certain items like A roof depreciation replacement have no direct connection to number of cars washed.

 

[liftheavy]

If you want to factor how much it costs to put a car thru the tunnel , only direct incremental costs should be considered. Certain items like A roof depreciation replacement have no direct connection to number of cars washed.

then you may as well factor everything. factor in cost of labor, factor in cost of microfiber towels if you supply them, waste pickup, marketing.

not sure honestly why equipment depreciation should factor in it, i can run an equipment for 15-20 years. one of my wash we finally changed the entire tunnel of coleman hanna that lasted 18 years

when it comes to cost per car its always been chemistry, water cost, and electrical cost.

 

[Earl Weiss]

then you may as well factor everything. factor in cost of labor, factor in cost of microfiber towels if you supply them, waste pickup, marketing.

not sure honestly why equipment depreciation should factor in it, i can run an equipment for 15-20 years. one of my wash we finally changed the entire tunnel of coleman hanna that lasted 18 years

when it comes to cost per car its always been chemistry, water cost, and electrical cost.

No, Yes, No, Maybe, No.
If you want to know the incremental cost of putting a car thru the tunnel you need to factor all costs, and only those costs that vary with the volume.

For an EE labor will not Vary much if at if you wash 100,000 cars or 150,000 cars a year. There may be a volume tipping point where this would change and then it would be included.

Freebie cost will vary and should be included

Waste Pickup is usually a flat rate but a huge volume increase could cause a cost increase for more pickups or bigger container.

Marketing does not need to change if Volume increases.

I did not include an accounting Factor of depreciation - I include actual repair / Maintenance which varies by volume. This is not always simple since you my e able to figure some things annually but something like chain and rollers or entire conveyor replacement could be allocated over 10 years. I had some Belanger and AVW mitters close to 40years old.

 

[TrevorN_TX]

The metric nobody here is talking about is breakeven frequency by tier. Not blended across the whole membership base. By tier.

If your top wash costs $6 to $7 in chemistry, water, equipment wear, and utilities per car, and you're charging $35/month for unlimited, you break even at 5 to 6 washes per month. Every member washing above that number is costing you money on every visit.

The guy at 3.2 washes per member is in a healthy spot, but that's a blended average. The question is what's the distribution. If half your members wash once a month and the other half wash 6 times, your average looks fine but the heavy users are eating your margin.

The other number that matters is tier distribution. If more than 60% of your members are on the cheapest plan, the gap between your tiers is too wide. The mid tier should be the volume driver. If it's not, the price spacing is pushing everyone to the bottom.

I run IBAs in Texas and tracking these numbers by tier changed how I think about the whole membership model.