I have been in the IBA car wash business for well over a decade. I am looking to open a new location and I am not really sure how to go about it. How would I know if I should open another IBA site with maybe self serve bays or get into the tunnel business, what makes you decide on which one you should do? I do not have any experience running a tunnel. What would make someone want to run a tunnel over multiple IBAs having both friction and touch-free and having to deal with employees?
How do I know what kind of car wash to build?
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robert roman
Bob Roman
I’ve worked with people to plan and develop carwash worth between $250,000 and $14.0 million. The carwash development process used was the same in each case.
I’ll summarize the first two phases to get you going.
First phase is to select advisers (project team).
For example, if you are buying dirt, real estate agent and attorney need to be consulted. As going concern, you should already have an accountant and insurance agent.
Additionally, you would need consultant, architect/civil engineer, general contractor, equipment supplier and lender or bank if finance is needed.
That’s a total of nine advisers or ten with internet specialist for website and phone app design.
Benefit of advisers is knowledge and expertise, best practice design and value engineering that saves time and resources by avoiding critical mistakes.
Second phase is carwash design.
The problem of what characteristics to choose for a carwash business requires decisions on store size, layout and implemented services.
“How would I know if I should open another IBA site with maybe self serve bays or get into the tunnel business, what makes you decide on which one you should do?”
This is solved by comparing the investor’s financial goals and objectives with the market potential of the site location.
This is benefit of first selecting advisers.
For example, consultant would provide orientation and assistance with research, analysis, configuration of business model and carwash development process.
The process of configuring the business model provides investors with the information to help choose the characteristics for their store.
In turn, this provides the criteria that real estate agents need to identify suitable property for the project.
And so forth.
Hope this helps.
I’ll summarize the first two phases to get you going.
First phase is to select advisers (project team).
For example, if you are buying dirt, real estate agent and attorney need to be consulted. As going concern, you should already have an accountant and insurance agent.
Additionally, you would need consultant, architect/civil engineer, general contractor, equipment supplier and lender or bank if finance is needed.
That’s a total of nine advisers or ten with internet specialist for website and phone app design.
Benefit of advisers is knowledge and expertise, best practice design and value engineering that saves time and resources by avoiding critical mistakes.
Second phase is carwash design.
The problem of what characteristics to choose for a carwash business requires decisions on store size, layout and implemented services.
“How would I know if I should open another IBA site with maybe self serve bays or get into the tunnel business, what makes you decide on which one you should do?”
This is solved by comparing the investor’s financial goals and objectives with the market potential of the site location.
This is benefit of first selecting advisers.
For example, consultant would provide orientation and assistance with research, analysis, configuration of business model and carwash development process.
The process of configuring the business model provides investors with the information to help choose the characteristics for their store.
In turn, this provides the criteria that real estate agents need to identify suitable property for the project.
And so forth.
Hope this helps.
Your question presupposes that to expand you need to build something. Let me share a little something. Most all of the good sites are already taken. You should also consider buying an existing wash. Just drive around the area you feel comfortable working in, and every time you see a wash that might work for you, just drop a note under the equipment room door, or the owner if you catch him. A lot of washes are available but not advertised. When buying an existing wash, you have cash flow from day one. When building you will be spending money for a year before you see any money coming in. Robert's advice is spot on for new ones. Just remember that there are a LOT of people out there that will tell you that your are the smartest person on the planet just to get your money.
If you go the existing wash route I would still put together a team as Robert suggests. It is very important to do your due diligence. There are probably more pitfalls with an existing wash as there are building a new one. Even an experienced wash operator needs some outside, impartial advice.
Greg Pack
Wash Weenie
For me it is site and lifestyle dependent. I still like the IBA business. But If you have a site that could support a tunnel, and don't mind dealing with about five-seven employees an express tunnel can be a good project to look into. One large southern chain here has found a good niche building express tunnels inexpensively. The prime sites in the south have been taken, so they are finding the less expensive properties in mid sized towns and building shorter tunnels. Even at 4K cars a month they are making a decent return.
Some operators here have actually bought large Taj Mahal self serves with the gabled roofs, knocked out the walls, and built a tunnel right down the middle of what was formerly the bays and equipment room. I know a guy that did this, his gross went from about 150K as a 5/1 to (I believe) over 500K
To me a big potential advantage of owning a tunnel is the revenue generated is potentially enough to pay quality labor to help manage your places. I also think tunnels will be easier to sell when you want out, especially if you build it so that it could be converted into some sort of flex serve type format in the future.
Some operators here have actually bought large Taj Mahal self serves with the gabled roofs, knocked out the walls, and built a tunnel right down the middle of what was formerly the bays and equipment room. I know a guy that did this, his gross went from about 150K as a 5/1 to (I believe) over 500K
To me a big potential advantage of owning a tunnel is the revenue generated is potentially enough to pay quality labor to help manage your places. I also think tunnels will be easier to sell when you want out, especially if you build it so that it could be converted into some sort of flex serve type format in the future.
robert roman
Bob Roman
“I still like the IBA business. But If you have a site that could support a tunnel, and don't mind dealing with about five-seven employees an express tunnel can be a good project to look into.”
“I know a guy that did this, his gross went from about 150K as a 5/1 to (I believe) over 500K”
Yes, profitable but at cost of $1.6 million or so. There’s the rub. How many mom and pop are willing to throw in $400K equity to make it happen?
Another option is in-bay to express in-bay or mini-tunnel conversion. Either would require less labor and cost is lower at $250K to $400K.
There is also another approach but it requires bucking convention.
Here, existing in-bay (touch-less or soft-wash) would be recalibrated so that service time is a constant like a tunnel (3-minutes) instead of variable like an in-bay (5-minutes).
So, if you like advantages of IBA business, my approach of emulating a conveyor operation would provide increase in hourly capacity, sales revenue and contribution margin. No labor involved.
Investment, $25K to $30K. Everything needed comes from authorized dealer.
“I know a guy that did this, his gross went from about 150K as a 5/1 to (I believe) over 500K”
Yes, profitable but at cost of $1.6 million or so. There’s the rub. How many mom and pop are willing to throw in $400K equity to make it happen?
Another option is in-bay to express in-bay or mini-tunnel conversion. Either would require less labor and cost is lower at $250K to $400K.
There is also another approach but it requires bucking convention.
Here, existing in-bay (touch-less or soft-wash) would be recalibrated so that service time is a constant like a tunnel (3-minutes) instead of variable like an in-bay (5-minutes).
So, if you like advantages of IBA business, my approach of emulating a conveyor operation would provide increase in hourly capacity, sales revenue and contribution margin. No labor involved.
Investment, $25K to $30K. Everything needed comes from authorized dealer.
Like Robert I have seen operators do very well making the switch from an IBA to an EE but I have also seen some struggle. One of the keys to be successful in the EE business is to have a good location. One that did okay as an IBA may not suit an EE. You need to be sure it is a location with a good traffic count, good access and visibility and a site that isn't too cramped or cramped looking. One of the more common issues seems to be lack of stacking space and a lot that simply doesn't fit an EE properly. It would probably be tough to have a tire shiner in 55 feet but I have seen it done. An extra 10 or 15 feet would be more desirable if possible. Personally I think the belt conveyors while they seem like a good idea are over priced and have more maintenance issues than traditional conveyors.
