I have never been involved with a carwash previously. I am considering building a single bay automatic in my hometown. It is a small rural town in Iowa with a population of around 2200. For a small town there is quite a bit of activity. I have done quite a bit of research but any advice would be appreciated. ie:what were some of your biggest surprises when you started? Thanks in advance
Considering starting a new carwash---any advice?
- Thread starter 1hawkeye
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JIMT
Member
Buy an old one that is about to go out of business and fix is up. The cost of a new wash is too high and you will never get your money back.
PaulLovesJamie
rural 5 bay SS
unless you already own a good location that wont support something else, and plan to do a lot of the construction and operations yourself, I'd speculate that a 1 bay automatic to serve a population of 2200 would be a bad investment. Unless there is a LOT that you are not telling us.
So my advice: run the numbers.
So my advice: run the numbers.
DiamondWash
Well-known member
Where about in Iowa?
While I understand the concern with the population, that is the population of the town only. There is a large rural area and none of the surrounding towns have a automatic wash either. There is quite a few business' in town that draw people in. And I would be looking at doing some of the construction and all of the day to day operations.
west central iowa
DiamondWash
Well-known member
What town/city is this potential wash located in so I can Google map it
robert roman
Bob Roman
“I am considering building a single bay automatic in….small rural town in Iowa with a population of around 2200.”
“….what were some of your biggest surprises when you started?”
1) With the exception of your carwash advisor, real estate agent or attorney, never tell “anyone” about your project until you take the property off the market.
2) A town of 2,200 people plus external traffic and rural population within economic distance of centrally located site should be able to support one automatic carwash.
3) Key is building a wash substantive enough that it will clear the market, form a barrier to entry and yet be commercially viable.
4) Find someone in your area that is qualified to help you perform a sanity test and concept study before spending a significant sum of time and money.
“….what were some of your biggest surprises when you started?”
1) With the exception of your carwash advisor, real estate agent or attorney, never tell “anyone” about your project until you take the property off the market.
2) A town of 2,200 people plus external traffic and rural population within economic distance of centrally located site should be able to support one automatic carwash.
3) Key is building a wash substantive enough that it will clear the market, form a barrier to entry and yet be commercially viable.
4) Find someone in your area that is qualified to help you perform a sanity test and concept study before spending a significant sum of time and money.
OK, there are a lot of "ifs" here. If you can buy the property right, if you can get all the improvements done at the lowest cost possible, if you have city water AND sewer for the site, if you're willing to put in a lot of hours on weekends and during the day, and if you really want to find out who all of the dumb people in the town are, and if you can find a machine that you can work on, and if there is a decent distributor for that machine, then after 5 years you MIGHT have it paid for and can start making a profit. There are actually some really good deals on ebay for used equipment. I've seen complete packages for around $20,000. Just don't fall in love with the idea and let your common sense walk out the door.
A town of 2,200 people plus external traffic and rural population within economic distance of centrally located site should be able to support one automatic carwash.
Robert, I have seen small town washes do fairly well - typically an automatic with 2 self service bays - but not something with this small a population in a rural setting. I am not challenging your opinion on this but would like to know on what basis you arrived at your conclusion. Based on a average household of 3+ there are only roughly 700 households in this town. That seems like an extremely small customer base in a rural community to support even a single automatic. It would be interesting to see more of your thoughts on this.
Robert, I have seen small town washes do fairly well - typically an automatic with 2 self service bays - but not something with this small a population in a rural setting. I am not challenging your opinion on this but would like to know on what basis you arrived at your conclusion. Based on a average household of 3+ there are only roughly 700 households in this town. That seems like an extremely small customer base in a rural community to support even a single automatic. It would be interesting to see more of your thoughts on this.
robert roman
Bob Roman
“I am not challenging your opinion on this but would like to know on what basis you arrived at your conclusion.” …..seems like an extremely small customer base in a rural community to support even a single automatic. It would be interesting to see more of your thoughts on this.”
Challenging opinion is healthy and often helpful in reaching the ground truth of something.
Consider a person with a lousy diet, grossly overweight and other high risk factors that is experiencing chest pains. Typically, a person in this condition has two choices.
Easier - angioplasty and continue the abuse and hope for the best or harder - lifestyle change meaning eat healthier, exercise, etc. and chest pains disappear.
My opinion is to take the latter approach and is based on fact of evidence, my personal experience with such things.
Likewise, my approach to carwash or other retail businesses is to rely on opinions based on fact of evidence.
For example, a market needs to generate enough sales to cover cost of acquisition and production. This area is called threshold. Amount of sales generated beyond threshold distance contributes directly to profitability of the market. Beyond the range customers are unwilling to go to the market because of economic distance.
However, unlike an urban or suburban setting, size of trading area or range for a rural market can be quite large (i.e. 10-miles). So, I assumed town population represents threshold distance.
My model suggests the threshold is sufficient to cover cost of acquisition and production and contribute to profitability.
Thus, external traffic, thoroughfare or major road, and population within range would also contribute to profits. Typically, I find population in rural range is usually equal to that of the small town.
So, let’s call this a sanity test at best.
Challenging opinion is healthy and often helpful in reaching the ground truth of something.
Consider a person with a lousy diet, grossly overweight and other high risk factors that is experiencing chest pains. Typically, a person in this condition has two choices.
Easier - angioplasty and continue the abuse and hope for the best or harder - lifestyle change meaning eat healthier, exercise, etc. and chest pains disappear.
My opinion is to take the latter approach and is based on fact of evidence, my personal experience with such things.
Likewise, my approach to carwash or other retail businesses is to rely on opinions based on fact of evidence.
For example, a market needs to generate enough sales to cover cost of acquisition and production. This area is called threshold. Amount of sales generated beyond threshold distance contributes directly to profitability of the market. Beyond the range customers are unwilling to go to the market because of economic distance.
However, unlike an urban or suburban setting, size of trading area or range for a rural market can be quite large (i.e. 10-miles). So, I assumed town population represents threshold distance.
My model suggests the threshold is sufficient to cover cost of acquisition and production and contribute to profitability.
Thus, external traffic, thoroughfare or major road, and population within range would also contribute to profits. Typically, I find population in rural range is usually equal to that of the small town.
So, let’s call this a sanity test at best.
I guess my experience is a little different from yours. I have found that estimating the viability of a wash in a rural setting is a bit more challenging than in an urban location. It almost comes down to having a good understanding of your potential customer base. For instance, if most of the population contains farmers and farm workers I have experienced that the frequency of this group using a wash on a consistent basis is low. However, if it is a rural area in relative proximity to a large city many of the potential customers may simply enjoy the country lifestyle while working in the "big" city. This base would be more likely to wash on a consistent basis. With the information he has given so far I think I would need a few more specifics to qualify the value of building an automatic. In reality, depending on the actual base and the feasibility of building the wash I would think that having a couple of self service bays along with the automatic would expand the number of those using the wash and increase revenues. In the end I guess it almost boils down to a gut feeling for the site and how badly the owner wants to build the wash.
I appreciate the discussions above. My "gut" tells me it will work, but I need to think it thru to make sure my brain and bank account are on board. The info that I have given is not enough to base a decision on, and I realize that. Some people don't have a feel for this area just like I wouldn't have a feel for a urban area. When I say rural area it's not like it is west texas. There are a couple sizable manufacturing plants, several banks, hospital, assisted living, drug stores, c-stores, implement dealers, etc that draw people in from a sizable area due to the fact that most surrounding towns don't have these. So in reality I should be looking at the population out farther.
I would also like peoples input on what the biggest surprise was when they built, not just if they think it is viable or not. Thanks again
I would also like peoples input on what the biggest surprise was when they built, not just if they think it is viable or not. Thanks again
That certainly sounds like a decent customer base. You can probably get someone to run a pro forma for you to get a better idea on the projected costs and revenue stream. From my experience you can't totally believe or rely on one but it does serve as a starting point. Ultimately the decision will be based on your desire to take this on and the risk you are willing to take.
I think there are as many different surprises as their are washes built. The most common one I have experienced is actually keeping to the construction schedule. The problem lies that the process has to be sequential. If one sequence is delayed the whole project is pushed back. There are other experiences like zoning, sewer and water fees, and cost of electrical and water hook ups. The equipment manufacturer can help somewhat and you will need to find a reliable distributor to help you through the process. Ultimately I would say get all the input you can before making the final decision and trust your instincts over your emotions.
I think there are as many different surprises as their are washes built. The most common one I have experienced is actually keeping to the construction schedule. The problem lies that the process has to be sequential. If one sequence is delayed the whole project is pushed back. There are other experiences like zoning, sewer and water fees, and cost of electrical and water hook ups. The equipment manufacturer can help somewhat and you will need to find a reliable distributor to help you through the process. Ultimately I would say get all the input you can before making the final decision and trust your instincts over your emotions.
lighthousecarwash
Active member
I must disagree with the majority on this one. I grew up in a small town in Kansas with a population around 2500 people. Mostly rural/farming community with only one car wash in town. It was ran OK, but nothing great. It had an older auto, no credit cards, and was just maintained enough to get by. A gentleman came to town that had previously been in the car wash business and bought an older building in town, completely gutted it and renovated it. He added 2 self serve bays, a new auto (Washworld), and made sure everything was the best that it could be. He used unitec and installed credit cards in the bays and auto and created fleet and gift card accounts. He absolutely kills it in this location! He has every business in town, the city, the county, banks, everything, setup on the fleet accounts. He does deal with more mud that I would like to with it being a rural area, but he runs more cars in a day that I do in a town of 100,000. Don't let the population scare you one bit. If you make it nice you will put the other one completely out of business. I had a guy tell me that when he built car washes in small towns, he made them the nicest ones that he could afford. His thought was that if someone decided that they were going to come to his town and compete that it would be too expensive for them to weather the storm while trying to get people to switch from a wash that they all love.
Now, the only issue is if you can afford to build that kind of a wash. If you just put in a single auto and try to grab part of the other guy's business, then it might be a rough go. Why not put in a couple self serve bays and be the only stop in town for anyone wanting to use a car wash? The equipment to put in 2 more bays is expensive, but no where the cost that the new auto will be.
Also, how many customer in major markets live within a few miles of the wash they use anyway. I have a few that drive across town to use my wash, but for sure not the majority. I would say my immediate customer base in a few miles around the wash is no more than 2500 people, and I have competitors only a few miles in every direction.
Just my opinion.
Now, the only issue is if you can afford to build that kind of a wash. If you just put in a single auto and try to grab part of the other guy's business, then it might be a rough go. Why not put in a couple self serve bays and be the only stop in town for anyone wanting to use a car wash? The equipment to put in 2 more bays is expensive, but no where the cost that the new auto will be.
Also, how many customer in major markets live within a few miles of the wash they use anyway. I have a few that drive across town to use my wash, but for sure not the majority. I would say my immediate customer base in a few miles around the wash is no more than 2500 people, and I have competitors only a few miles in every direction.
Just my opinion.
robert roman
Bob Roman
“….if most of the population contains farmers….if it is a rural area in relative proximity to a large city…..need a few more specifics to qualify……”
Exactly, need more to say more. Sanity test gives a reason to take next step forward with business concept. It is not feasibility.
For example, findings from detailed analysis might recommend bucket and hose wash rather than wands and/or in-bay.
It also helps to understand the carwash industry.
Self-serve (wands) serves DIY segment. Motorists rent space and buy chemical, water and energy and clean their own vehicles. Generally, owners operate like apartment rental business.
In-bay services DIFM segment. Motorists pay for distinct “services” just like at oil change facility, muffler and brake shop, fast food drive-through and other retail stores.
DIFM is willing to pay more but also expects more. However, many owners treat in-bay like apartment rental business.
Problem is you cannot treat oil change or fast-food or other retail business like rental property and expect to achieve normal profit or succeed in long run.
What lighthouse mentioned is example of how to operate like a retail store. As implied, this takes entrepreneurship, skin in the game, people skills and willingness to serve.
Exactly, need more to say more. Sanity test gives a reason to take next step forward with business concept. It is not feasibility.
For example, findings from detailed analysis might recommend bucket and hose wash rather than wands and/or in-bay.
It also helps to understand the carwash industry.
Self-serve (wands) serves DIY segment. Motorists rent space and buy chemical, water and energy and clean their own vehicles. Generally, owners operate like apartment rental business.
In-bay services DIFM segment. Motorists pay for distinct “services” just like at oil change facility, muffler and brake shop, fast food drive-through and other retail stores.
DIFM is willing to pay more but also expects more. However, many owners treat in-bay like apartment rental business.
Problem is you cannot treat oil change or fast-food or other retail business like rental property and expect to achieve normal profit or succeed in long run.
What lighthouse mentioned is example of how to operate like a retail store. As implied, this takes entrepreneurship, skin in the game, people skills and willingness to serve.
MEP001
Well-known member
lighthousecarwash makes a good point, but it also depends on the average wealth of the community. When I worked for a distributor, we did two builds each with one SS bay and one auto. They both did well, but the one in the smaller down did better. And it was a LOT smaller, basically a highway intersection with a couple side streets, but every vehicle you'd see was either a very nice car or fully-loaded truck.
Good point. There is quite a bit of money in this small town. Not your average small town Iowa. Lots of 50-60K diesel trucks, and several lexus, cadilac, Infiniti etc.
