Four years ago I was getting 55% - 57% profit (earnings before interest, taxes, depreciation, and debt) on my ss/iba washes. I am working harder now just to hit 48% - 50%, mostly because of utilities and property taxes but also market factors. I'm in the midwest, and my labor runs 5% of sales. We are all aware of the reasons for the industry decline, but has anyone managed to stay at 55% to 60%, or more.
keeping profit margin at IBA/SS high?
- Thread starter motefam
- Start date
Greg Pack
Wash Weenie
haven't figured margin on this year's numbers, but I was still in the 60% range last year. It will be lower this year.
Most carwashes I am familiar with hit their best numbers around year 2-3, then revenue levels off. Then, inflation eats into the profit of the wash, decreasing margins over the years. Next big bump in pocket money comes when mortgage is paid off.
The only way I know to maintain margins over the longer term is to increase price or have a reason that business improves considerably. Would your customer base tolerate a $1 increase on all wash packages?
Most carwashes I am familiar with hit their best numbers around year 2-3, then revenue levels off. Then, inflation eats into the profit of the wash, decreasing margins over the years. Next big bump in pocket money comes when mortgage is paid off.
The only way I know to maintain margins over the longer term is to increase price or have a reason that business improves considerably. Would your customer base tolerate a $1 increase on all wash packages?
robert roman
Bob Roman
One way to generate more sales volume and prop up price is to build more value into your wash. The value proposition for a carwash business is solving people's cleaning problems.
Does your wash offer customers typical features like undercarriage, wheel/rocker blaster, tri-foam condition, clear-coat, spot-free rinse and dryer?
Does your wash have a modern auto-teller with touch-screen and audio and video prompts that provides customers with an up-beat greeting, instructions and several payment options or are you using something that looks like it came out of an old Shell gas station?
Have you tried adding any of the new income generators like total body protection or automatic tire shine?
Does your wash offer customer self-services like vacuums, shampoo, fragrance or vending merchandise?
Does your wash offer customers any amenities like soda or snack machines, scented soaps or wax, back-lit carport over the vacuum area, etc.?
Are you effectively marketing the wash with a good mix of advertising, promotion and publicity or are you relying solely on word of mouth or price competition to capture market share?
Hope this helps.
Bob Roman
Does your wash offer customers typical features like undercarriage, wheel/rocker blaster, tri-foam condition, clear-coat, spot-free rinse and dryer?
Does your wash have a modern auto-teller with touch-screen and audio and video prompts that provides customers with an up-beat greeting, instructions and several payment options or are you using something that looks like it came out of an old Shell gas station?
Have you tried adding any of the new income generators like total body protection or automatic tire shine?
Does your wash offer customer self-services like vacuums, shampoo, fragrance or vending merchandise?
Does your wash offer customers any amenities like soda or snack machines, scented soaps or wax, back-lit carport over the vacuum area, etc.?
Are you effectively marketing the wash with a good mix of advertising, promotion and publicity or are you relying solely on word of mouth or price competition to capture market share?
Hope this helps.
Bob Roman
