New Dual-Bay Petit 360i Build

[Flandomagic]

I’m looking to do a greenfield new build of a car wash with 2 Petit 360i in-bay touchless automatics and Dencar point of sale systems. In my pro forma, I offer 3 wash packages of $10, $13, and $15, with monthly subscription prices of $24.99, $29.99, and $34.99, respectively. The average daily traffic is 9,200 a half block away at a stoplight and location is on the RH side of the road (2,400ADT) adjacent to a Walmart parking lot right beside their online order pickup area. That road leads directly into a housing development of at least 150 buildings, some of them are multi-tenant. Total population of the rural midwest town is 6,000, with 15,000 living within a 10 mile radius. The property is also located just off of a 4 lane highway, where people will be exiting for a rest stop during daily commutes and longer trips. I will be the sole owner/employee. I am estimating an average wash cost of $3 per car, counting supplies, utilities and a 4% card transaction fee (we will be fully cashless). In my area, I would expect approximately 300 days per year of open days where people may be looking for washes. My bays will be 70 feet in length, which will allow the next car to begin it’s wash cycle while the previous car is in the dry cycle. My bays will be at both ends of the building, with a large central control room/office setup in the middle. My competition is all on the other side of town with run-down, old-looking buildings, mostly self-serve with a couple of very small laserwash bays. The all-in costs I'm estimating are between $2mil to $2.5mil. What I'm missing in my pro forma is a realistic range of how many subscriptions, package take rates, and ADT capture rates. Anyone with experience have some color or advice to add here? Thanks in advance!

 

[Waxman]

cashless is a mistake imo. best to accept cash, coins, cc.

memberships don't always pencil out, so be careful. i knew a wash doing great #'s with 3ibas. nice busy site. when they ran the #'s, they lost thou$and$ per year on the membership program!!!

your iba prices are too low for a new 2$M build. I had a $10 wash on my new inbay automatic over 20 years ago. How many cars do you have to wash at even $15 per car to just break even? i'm not sure your location is as great as you think it is.

you can't simply discredit the competition because they're old, etc. they may put out a great wash. they may have a strong customer base. you will be relying on getting customers to change their habits if you are to succeed. habits are powerful, and changing customers habits can be tough. they're not automatically going to start using your wash just because you're new and nice. they will likely try you, but if you don't knock their socks off the first time, they're going right back to where they've always washed.

i think your cash flow projections need more work. i used 3/10 of 1% dtc for my hopeful average and it took 20 years for me to achieve that #. i don't think you can survive too long on 30 cars/day, a $13 avg sale and a $2.5 M note pmt.

 

[Flandomagic]

cashless is a mistake imo. best to accept cash, coins, cc.

memberships don't always pencil out, so be careful. i knew a wash doing great #'s with 3ibas. nice busy site. when they ran the #'s, they lost thou$and$ per year on the membership program!!!

your iba prices are too low for a new 2$M build. I had a $10 wash on my new inbay automatic over 20 years ago. How many cars do you have to wash at even $15 per car to just break even? i'm not sure your location is as great as you think it is.

you can't simply discredit the competition because they're old, etc. they may put out a great wash. they may have a strong customer base. you will be relying on getting customers to change their habits if you are to succeed. habits are powerful, and changing customers habits can be tough. they're not automatically going to start using your wash just because you're new and nice. they will likely try you, but if you don't knock their socks off the first time, they're going right back to where they've always washed.

i think your cash flow projections need more work. i used 3/10 of 1% dtc for my hopeful average and it took 20 years for me to achieve that #. i don't think you can survive too long on 30 cars/day, a $13 avg sale and a $2.5 M note pmt.

Good point on discrediting competition. I started with these prices to begin within the range of the competition's iba offers of between $8-$11 and also to not go too much of a premium on top of that. I think I at least have to start at $10, but can maybe make some bigger jumps on top. You are right- at those prices, even a .46% dtc comes to a loss of about $70k/yr. That seems to be the hardest thing to predict here- as a supplier says I should be around 1-2%, but another starts at .46% and everyone else says "it depends on location", which I think mine would be a pretty prime spot with slow and guaranteed steady flows. That led me to believe that somewhere around a .75% dtc is probably a fairly safe assumption, which would put me around 65 cars per day. I also assumed a subscription base of 200 subscribers. At those rates, I'm showing a small profit of around $50k/yr until financing is paid off. My understanding is the Petits do knock people's socks off, so I'd likely capture a big chunk of the competition's automatic traffic. What is your setup like for comparison on the dtc?

 

[Roz]

I tend to agree with Waxman analysis.

You can have a wider range say $10-$20 with some great marketing to convince customers to go to your best package. Review the numbers for the packages and then refine things after you see a trend.

I would love to see how you get to $2M-$3M as that’s a huge range. Good to plan for overage costs but I would like to see breakdown. Petits are OK machines. I have taken my vehicles thru a few and met with several different owners. Not convinced by any that they are worth the large premium over a Razor or a Razor HyperForce. Dencar well I would read about all their growing pains. They are cool looking machines but I think they are missing from features that an ICS or Hamilton have. Cashless is fine if your demographics are higher end. Memberships are only good if you have many members and rarely make sense for an IBA. You may need to monitor that closely as you have a limited capacity compared to a tunnel and are always open. We limit our membership plans to 5 per month which is fine for 99% of the population. Anyone washing more is a customer you do not want. Also if you are the only touch free in town you might consider not doing a membership plan as you are a much safer wash than any tunnel (even ones that are run well).

 

[washnshine]

I agree with the above two and would also add that I don’t think your traffic count justifies 2 bays.

 

[Waxman]

i'm in a small town with lower to mid income in Massachusetts. my location is honestly a B or B minus because I am at the crest of the hill with a 40 mph speed limit where everyone goes about 50 miles an hour. I remedy this with a tall sign that you can see very well from both directions. I also put out three large flags near the road that also improve my curb appeal of the car wash; usa, state flag, car wash flag. I have 10,400 cars per day going by ; probably more now, as this estimate was taken 20 years ago.

I think you need to proceed with caution because it's very easy to get caught up in the "build it and they will come" mentality when you are planning a new project. I built my wash as economically as I could 20+ years ago. I have invested much more money into it since that time. I have a five year-old razor that my customers love. I get compliments very consistently on this upgrade and it has improved my business quite a bit. before that I kind of limped along with a machine that was economical to buy, but was in constant need of repairs and troubleshooting, which stressed me out a great deal. All I'm saying is that you should obsessively refine your business plan and cash flow projections until you get to the point where you're comfortable that there's no way you will lose money on this project. I don't think you're close to that point yet. I wish you luck.

 

[Flandomagic]

I tend to agree with Waxman analysis.

You can have a wider range say $10-$20 with some great marketing to convince customers to go to your best package. Review the numbers for the packages and then refine things after you see a trend.

I would love to see how you get to $2M-$3M as that’s a huge range. Good to plan for overage costs but I would like to see breakdown. Petits are OK machines. I have taken my vehicles thru a few and met with several different owners. Not convinced by any that they are worth the large premium over a Razor or a Razor HyperForce. Dencar well I would read about all their growing pains. They are cool looking machines but I think they are missing from features that an ICS or Hamilton have. Cashless is fine if your demographics are higher end. Memberships are only good if you have many members and rarely make sense for an IBA. You may need to monitor that closely as you have a limited capacity compared to a tunnel and are always open. We limit our membership plans to 5 per month which is fine for 99% of the population. Anyone washing more is a customer you do not want. Also if you are the only touch free in town you might consider not doing a membership plan as you are a much safer wash than any tunnel (even ones that are run well).

I was thinking about limiting the monthly washes too, to a level not many people would ever reach anyway, just to avoid abuse. I have ballpark equipment costs figured around $750k and building/site around $1.3M. Capacity per hour with the longer bay and running 2 is actually similar to a tunnel if you consider about a 3 min wash and 2 cars in bay at a time. I would never max out capacity at my site. Might also consider just going with one bay to start with and leave the other empty until I'm out of debt. Just would not be great to have the only bay down for an issue/maintenance and lose 100% of business, as well as have stackups on busy days that would probably drive people away. I have a friend with Dencars that I'm planning to grill hard. Thanks for the input!

 

[Flandomagic]

i'm in a small town with lower to mid income in Massachusetts. my location is honestly a B or B minus because I am at the crest of the hill with a 40 mph speed limit where everyone goes about 50 miles an hour. I remedy this with a tall sign that you can see very well from both directions. I also put out three large flags near the road that also improve my curb appeal of the car wash; usa, state flag, car wash flag. I have 10,400 cars per day going by ; probably more now, as this estimate was taken 20 years ago.

I think you need to proceed with caution because it's very easy to get caught up in the "build it and they will come" mentality when you are planning a new project. I built my wash as economically as I could 20+ years ago. I have invested much more money into it since that time. I have a five year-old razor that my customers love. I get compliments very consistently on this upgrade and it has improved my business quite a bit. before that I kind of limped along with a machine that was economical to buy, but was in constant need of repairs and troubleshooting, which stressed me out a great deal. All I'm saying is that you should obsessively refine your business plan and cash flow projections until you get to the point where you're comfortable that there's no way you will lose money on this project. I don't think you're close to that point yet. I wish you luck.

Great info and thank you for sharing your setup! I agree it is very easy to get caught up in that mentality (you should have seen my first idea on the setup- it was nuts!). I definitely want to refine my plan and make it viable, which is why I'm reaching out to people like you with the experience. Very much appreciate your insights!

 

[Keno]

...Capacity per hour with the longer bay and running 2 is actually similar to a tunnel if you consider about a 3 min wash and 2 cars in bay at a time...

40 cars per hour max is nowhere near tunnel capacity.

 

[Waxman]

I think it's pretty rare for inbay automatics to be maxed out more than a handful of days per year. with one razor bay, I'm maxed out a handful of days in the winter time but other than that my 5 to 6 minute wash time is perfectly fine to keep the line flowing and the customers willing to wait.

 

[Flandomagic]

40 cars per hour max is nowhere near tunnel capacity.

Times 2 bays =80. Fairly close to one tunnel.

 

[Flandomagic]

I think it's pretty rare for inbay automatics to be maxed out more than a handful of days per year. with one razor bay, I'm maxed out a handful of days in the winter time but other than that my 5 to 6 minute wash time is perfectly fine to keep the line flowing and the customers willing to wait.

Yea, I have a tendency to overbuild/spec everything I do- never shoot for "good enough". It's feeling more like the single bay would be the way to go, at least to start, and ensure I have the ability to add later if it goes crazy...

 

[Keno]

Times 2 bays =80. Fairly close to one tunnel.

40 is already 2 bays. 3 mins per wash = 20 washes per hour per bay. And with inattentive drivers and drive in and drive out time, it'll most likely be less than 20 per hour

 

[OurTown]

Is this in a high income town? Have you approached the other owner to purchase and rehab that wash? You could be well over a million dollars ahead and have all the town's business. That is a pretty small market for two washes. In my experience, this expensive new wash probably won't cash flow. Have you talked to any lenders? Interest rates still suck right now.

 

[Flandomagic]

40 is already 2 bays. 3 mins per wash = 20 washes per hour per bay. And with inattentive drivers and drive in and drive out time, it'll most likely be less than 20 per hour

I didn't double-check that number. 29 car theoretical max per hour per bay x 2 bays. So closer to 60 than 80.

 

[Flandomagic]

Is this in a high income town? Have you approached the other owner to purchase and rehab that wash? You could be well over a million dollars ahead and have all the town's business. That is a pretty small market for two washes. In my experience, this expensive new wash probably won't cash flow. Have you talked to any lenders? Interest rates still suck right now.

Median income in the town is $78,000, so no, not particularly high income. It is rural-ish. Competitive locations are all pretty bad and bays are mostly small. The only one that even looks like it is still open and on a main road is a pretty ugly steel building and the setup is horrible for in and out. I can't imagine the control rooms are decent either. To me, it is build or bust here. Not talked to lenders yet- still in idea stage!

 

[Keno]

I didn't double-check that number. 29 car theoretical max per hour per bay x 2 bays. So closer to 60 than 80.

You're going to have an average wash cycle time of 2 mins and 4 secs?

How much is your note payment going to be to build it the way you want? Does that pencil out? And how long is the ramp up time to get into the black? Do you have the cash to float the note while in ramp up stage in the red?

 

[Flandomagic]

You're going to have an average wash cycle time of 2 mins and 4 secs?

How much is your note payment going to be to build it the way you want? Does that pencil out? And how long is the ramp up time to get into the black? Do you have the cash to float the note while in ramp up stage in the red?

I don't know that whether it is 2 min or 3 min really matters, I'm just going by what Petit says as a 29 car max with a 4 pass wash. My payment to build it the way I want would be somewhere around $22k/mo, possibly swinging a couple thousand either way depending on how creative my financing would be and also how much starter cash I can scrape up. I would have to likely include working capital into that figure to float the ramp up. This is probably a good time to mention that this is a retirement plan, not an income replacement. I work mostly remote and plan to keep my job, so I'm looking to just create a plan where I can stay in the black enough to pay off the note in 10 years or so and then retire, with the wash being my supplemental income. I want to be able to toss my dad a few bucks too if he takes the reins when I'm on work trips or out of town. A main reason I'm looking at Petits is their reputation of being low maintenance and customer delighters (lots of stories where customers gravitate to them when side by side with other brands). I want maximum automation and minimum labor (yes, I know whatever I do it will still be some work) and ability to remotely monitor when I'm not there. The other guy in town can have the self-serve traffic while I offer the premium quick wash experience. Anyway, that is what I'm going for as the idea, and I need the experience of the people in this group to help me understand if it is a viable idea or a pipe dream! Attached a map of the potential locations, Walmart to the North, busy intersecting road to the East just off screen, 4 lane hwy to the South just off screen.

 

[washnshine]

Whichever of the two locations you choose, you might want to consider a second exit on the west side of either lot. It would be for the customers who just want to wash and get out - no vacuum or wipe down. I honestly don’t think it will be a traffic flow issue without a second exit, as this is not a high volume site, but it is a customer convenience since you are bordered by streets on every side of the property.

 

[washnshine]

Two other things - you cite you will have 300 days a year where you will be open and people looking for washes. That seems very low to me. Sure - weather factors into our business, but that is essentially two months per year of not washing cars! Also - $22,000 per month payback will not work with your price structure.