Car Wash in Financial Trouble

[CarWashHelp]

Hello All,

Been browsing this forum for the past hour or so. Lots of great info here!

My parents have owned a car wash in a pretty populated area for about 8 years now. 4 SS bays, and one in-bay touchless automatic. Recently they have asked for my help in repairing the equipment and keeping it clean. Been doing so for a few months now to help them out, and haved learn quite a bit about replacing nozzles, foam brushes, soap, troubleshooting stuff, and more.

Trouble is though, the car wash doesn't, and hasn't, made any money. Apparently some months it can't even pay the rent. My mom and dad explained the financial situation of the car wash to me a couple weeks ago and asked for my recommendations. Here is they're current situation:

Self serve bays are $2.50 to start, which gives you 5 minutes. If you put in a $5 bill, you get 20 minutes of washtime. They have big huge banners that they paid thousands of dollars for which advertise the $5 for 20 minutes.

4 vacs, $1.00 gives you 4 and half minutes.

1 in bay automatic, with pricing set at $5, $8, $9, and then $10 for the most expensive wash.

They have no drop shelf vendors of any kind, nor any vending machine selling anything.

My recommendations are to get rid of $5 for 20 minutes and set the price to 50 cents per minute. I don't see how $5 for 20 minutes can be sustainable. Install CryptoPay in each bay. Replace bay lighting with LED lighting. Get some drop shelf vendors in there selling air fresheners, drying towels, armorall, etc. Raise $5 wash price in automatic to $7. Maybe put in a shampoo vac or two.

Do my recommendations sound good so far? I really think it can be a cash cow if priced right. But my parents are under the impression if they raise prices they're going to lose customers. It's the only Self Serve car wash in a town of 11,000. The next closes Self Serve car wash is about 10 miles away. We used to have the only automatic in town, but 2 more have been built in recent years and that's definitely had an impact.

Thanks for reading, and thanks for your responses in advance.

-Michael

 

[I.B. Washincars]

I definitely think you should raise that $5 wash up to $7. The $3 gap between the bottom and the next wash is just begging people to buy the cheapest. Lower the vac time to no more than 3½ minutes. A combo shampoo/vac is a good idea, watch for a used one. I think the $5 for 20 minutes is a bit much, but that bell is harder to unring. You probably have a following for that and if you drop it completely you may well lose some of those. I would keep it, but drop it to about 15 minutes. Vending is not a huge money maker, but I feel it is a necessary evil to an extent. You can pick up used drop shelf machines for little to nothing. Towels, armor-all, and maybe a tree vendor should suffice.

 

[smallwash]

The time the customer receives for one quarter is 30 seconds to start, if a $5 bill is put in they receive 60second per quarter. Revenue is cut in half with this special. I like your suggestion of getting rid of it. with limited SS competition doing this would only help generate more revenue and allow you to decrease your operating expense %.

My meter boxes have a reward built in and I give an add'l $.25 time of 35 seconds for a $5 bill and an addl $.50 per (70 add'l secs) for a $10 bill. Here in Ok start time is 3:30 for $1.50.


What are the competitor auto prices? Are customers currently buying your $5 auto wash?

 

[CarWashHelp]

I think the $5 for 20 minutes is a bit much, but that bell is harder to unring. You probably have a following for that and if you drop it completely you may well lose some of those. I would keep it, but drop it to about 15 minutes.

Thanks IBWashincars. Yes, the $5 for 20min does have a following. $5 for 15 minutes might work. Where our car wash is located, we get lots of trucks that go mudding and they really take advantage of the $5 for 20 minutes. They really muck up the bays and then we have to spend another 15 minutes cleaning out a muddy bay. This happens multiple times per day.

 

[CarWashHelp]

What are the competitor auto prices? Are customers currently buying your $5 auto wash?

Thanks Smallwash. I did check out the prices of the competing car washes. The cheapest wash both places offered started at $9.00. One even has a $20 wash. Both of those automatic car washes are brush. We have the only touchless automatic.

Customers do buy the $5.00 wash. It just sprays presoak, and then pressure washes it off. But my parents don't have any hard numbers on which wash sells the best. I'll have to see if there's a way to tell in the Auto Cashier how much of each wash we sell.

 

[smallwash]

On changing to $5 for 15 minutes. My opinion: if the goal is to bring the price to 30 seconds per quarter, I think it is better to **** them off one time rather than making several changes.

For example: hypothetical
If one bay is averaging $1000 per month. Say 50% of the customers are using the $5 special and 50% are paying $.25 per 30 second.

4000 quarters in $1,000 per bay

2000 qtrs @ 60 secs give 120,000 secs
2000 qtrs @ 30 secs give 60,000 secs

Total of 180,000 seconds per bay per month divided by the 30 seconds change gives a revised quarter number of 6,000 or $1,500. If 25% of the special customers do not come back you still increase per bay revenue by 25%.

 

[robert roman]

“My parents have owned a car wash….for about 8 years now. Trouble is….wash doesn't, and hasn't, made any money….some months it can't even pay the rent.”

“It's the only Self Serve car wash in a town of 11,000. We used to have the only automatic in town, but 2 more have been built in recent years and that's definitely had an impact.”

Identify the root cause of a problem before trying to solve it.

The problem is the carwash “doesn’t and hasn’t” made any money.

Based on the prices you mentioned, one cause is lack of customers, not price point.

For example, the wash is in financial trouble and yet two additional in-bay automatics have been built in the trading area.

Moreover, the owners have turned to you, someone with no carwash experience, to fix a failed business.

Thus, another cause is lack of interest and knowledge and skills.

So, first step is to fix this.

For example, first jumping to change price is simply a knee-jerk reaction. A ship needs a captain to avoid sinking not a mate with a baling bucket.

The most expedient way to acquire what you need to try and save an economic failure is to engage an equipment dealer and/or consultant.

Second step would be to solve the problem of trip generation, door swings.

In other words, you need to identify viable methods to mitigate business operations risk of generating sufficient gross sales.

 

[Waxman]

raise automatic wash prices to $8,9,10,12.

get rid of 20 min for $5./SS.

make it $3 startup for SS/3.5 or 4 min.

leave vacs where they are or decrease time given a bit.

add some vending. I'd get a used Shurvend from Uncle Sam with a security cage.

i'd hold off on your other improvements until you are making a bit of money.

 

[MEP001]

Before you raise the price, start with the basics. The car wash needs to be clean and well-maintained. Many years ago I took over running a wash that was grossing about $1000 a month. All I did was keep it clean, test everything every day, and turned up all the soaps which were too weak, and the gross eventually leveled off at about $13,000 a month. Not bad considering the wash was paid off and the total operating costs were less than $2,000 a month.

 

[Sequoia]

Thanks IBWashincars. Yes, the $5 for 20min does have a following. $5 for 15 minutes might work. Where our car wash is located, we get lots of trucks that go mudding and they really take advantage of the $5 for 20 minutes. They really muck up the bays and then we have to spend another 15 minutes cleaning out a muddy bay. This happens multiple times per day.

This jumps out at me. $5 for 20 mins either brings miniscule profits or is your delivery of services to a customer below your cost to provide them. Either way, you make no money, or lose money, to lure the mudders to your facility which then cause costly cleanup issues. Pick a labor rate that is appropriate, then add the cost to repeatedly clean the bays? How is that promotion looking now, from an economic view?

And, if you succeed in luring the mudders to you, and not the competition, your customers frequently see a trashed/filthy bay at your location but for some unkmown reason the other washes don't have that? Does this build the unintended impression that you "don't care" about your wash while the other wash owners do? Remember, the customer sees the mud; they don't understand who got lured to your wash and why.

I have a quad-cab truck and I rarely spend more than 10 minutes washing it. I'd deep-six the entire 20 minute promotion and not consider replacing it with a 15 minute one either. Does your average customer driving an average sedan really need that, or would you still be luring the mudders with little advantage to your bread-and-butter customer?

 

[MEP001]

I have to agree with Sequoia. I routinely see guys spend $15-20 to wash a truck at 34 seconds per quarter.

 

[CarWashHelp]

Thanks for the replies and advice everyone; it's really appreciated.

Just a quick update. I lowered the Vacuum times from 4:30, to 3:44. Raised lowest Automatic price wash from $5.00 to $7.00. Still working on getting rid of the $5 for 20 minutes pricing. I think we're going to go with the following pricing structure:

$2.50 to start = 5 minutes
$5.00 = 10 minutes
$10 = 25 minutes

Some customers will be mad that the $5 for 20 minutes is gone, but they'll get over it. Especially since we're the only SS in town.

The car wash has good volume I believe. I was there all day last Saturday and it was as busy as can be. All 4 vacs being used constantly, as well as the bays and automatic. It's on a very busy stretch in the town where the speed limit is only 35 mph. We keep it clean and everything working. It's just that we don't charge enough, and unexpected repairs really mess things up. For example, this weekend we had to have our automatic repaired at a cost of $1800. There was a shorted wire somewhere causing all kinds of problems. That's 360 $5 washes right there that need to be sold to pay for the repair, before expenses! We also have to get the pits pumped out within the next week or two because the bays keep flooding. That will be another $1000 I'm told.

 

[chaz]

Make it simple. $3 for 4 minutes isn't what I charge. Additional deposit means more time but no volume discount. Good luck.

Also, did you raise the top automatic price. At my place the top is most profit, biggest sales.

 

[Waxman]

like i said; raise all your prices. get rid of $5 20 min fast. big money suck there.

raise the top automatic pkg (raise em all) price.

learn to fix the carwash yourself or with help. you sound smart, so find a source for help in troubleshooting before you spend $1800 to fix a broken (or shorted) wire.

you have to dig in and learn about your automatic more; how it works, what sensors control what operations, etc. Start a maintenance and troubleshooting log. that way, when problems arise, you have a reference for what you have done and when and what parts you used. repairing these machines and troubleshooting is very logical and once you get ahold of the logic behind it you can save alot of money.

sounds like you paid way too much for a shorted wire fix.

 

[ScottV]

C.W.H.
Don't be afraid of price increases. I used to agonize over them and then 3 months after implementing I was kicking myself for taking so long to make the change. I am the price leader in my market and I don't apologize for that. People pay good money at my washes but they get good results at a super clean / maintained facility with excellent customer service. If you want to deal with the "dollar tree" type clients, then keep the $5.00 / 20mins package in place and keep shoveling mud.
It sounds like your parents built a business but never bothered to make it profitable. Work your a*s off, treat the customers well, and keep the wash looking like a place they want to visit frequently. Good luck and keep us posted on your progress!

 

[PaulLovesJamie]

Still working on getting rid of the $5 for 20 minutes pricing.

my blunt 2 cents:
Why are you "working on" it when you
a) you've received unanimous expert advice here to get rid of the $5/20 minutes
b) you know for a fact that your current pricing is losing $.
I would have it done in less than a day.
Now, to temper my bluntness a bit, admittedly I only know what I read in this thread. You need to run your business in your market, etc etc. But I suspect you're simply fearful of making a big change and potential negative consequences. Read through past threads on price changes, most of us hesitate due to "fear" and in hindsight most of us realize that was foolish. Do your homework & trust your brain. Then monitor the results and adjust accordingly.

$5/20min is a valid pricing scheme to consider for underperforming washes. Or high competition levels. Or a couple other things... but one of them is NOT a well run busy wash with limited competition.

 

[CarWashHelp]

my blunt 2 cents:
Why are you "working on" it when you
a) you've received unanimous expert advice here to get rid of the $5/20 minutes
b) you know for a fact that your current pricing is losing $.
I would have it done in less than a day.

Appreciate the bluntness Paul lol. Haven't done it yet because I didn't know how to program the Dixmor timers, and we also have 4 HUGE banners on the exterior that advertise the $5 for 20 minutes that have no paint underneath them. I played around with the programming today and it's super easy. I want to remove the banners first, paint the bare spots underneath them, then program the new prices.

 

[Waxman]

Appreciate the bluntness Paul lol. Haven't done it yet because I didn't know how to program the Dixmor timers, and we also have 4 HUGE banners on the exterior that advertise the $5 for 20 minutes that have no paint underneath them. I played around with the programming today and it's super easy. I want to remove the banners first, paint the bare spots underneath them, then program the new prices.

reorder the list: 1. remove banners. 2. re-program Dixmor timers 3. paint bare spot

 

[Randy]

I wouldn’t be too concerned about making any one mad or upset because I raised the price. Just be truthful and tell your customers that you had to raise the prices and do away with the $5 - 20 minute special or close the car wash, they’ll understand.

I’d raise the price on the Self-serve bays to $3 for 4 ½ minutes about 6 months lower it down to 4 minutes.

No bonus bay time!

Vacuums $1 for 3 minutes.

I wonder where (what town) this mystery car wash in located in Pennsylvania.

 

[CarWashHelp]

Just wanted to post an update. I really appreciate all of the advice given to me so far, and I am definitely implementing it.

Here's what I've done so far:

1. Reduced vacuum time to 3:44 from 4:30

2. Removed $5 for 20 minutes signs and painted bare spots underneath. Color looks great and you can't tell that it's just been painted.

3. SS bays are now $3 to start instead of $2.50, and that $3.00 gives customers 5 minutes.

4. Spot free rinse in the bays wasn't working . Was able to fix that myself. The output hose from the motor was clogged with some type of build up. Not sure what it was or how it got there.

5. Tri color foam in bays only had one color working. Was able to fix that myself as well. Tips were clogged in the hydrominders for two of the soaps.

6. Raised price of $5 IBA wash to $7.

What I'll be doing within the next month or two:

1. Install Cryptopay

2. Change bays from $3 for 5 min, to $3 for 4:30. Gotta pay for the credit cards ;-)

3. Raise the prices of all IBA washes by $2 each. Need to find nice price stickers for the IBA signs so that it looks good. Most expensive wash, which is also the best seller in the IBA, is currently $10. Soon it will be $12. Prices haven't been raised since the IBA was installed 6 years ago.

4. Hopefully be able to get the CryptoPay kit for our Hamilton Autocashier.

5. Get the car wash some sort of web presence. Right now if you google "car wash" + the name of the town it's in, nothing shows up. I'm a web developer by trade, so I'm going to make a simple website with driving directions, car wash features, photos, etc. If I'm feeling really energetic maybe I'll create some instructional videos for the SS bays.

I was there today and it was busy. I saw van spend $11 in the bay, and a truck spend about $13 or so. Had a few customers ask me what happened to the $5 for 20 minutes, and I simply told them that that promotion has ended. Have yet to clean up a really muddy bay like I used to have to do everyday.

I read a couple of threads about "bucket washers". Didn't really know about bucket washers until I read those threads. I saw a bucket washer on Monday as well as today. I don't really mind though if the wash isn't busy. They have to spend $3 to fill their bucket, wash the car (with their own soap lol), then spend another $3 to start it again to rinse of the car. So $6 just for high pressure water, I'll take that any day.

Thanks again for the advice given so far; it really is much appreciated and I'm very optimistic that the car wash will do just fine from here on out. I'll keep posting updates and maybe remove the shroud of "mystery" behind where the car wash is once it's completely turned around.