Please advice

[JGX]

Hi

I am new on this, I do not own a car wash "yet"; I have been researching for an additional source of income when I found the car wash world, for me appears to be a great option.
I live in Canada, in winter months the temp can reach -4 F, the extreme cold is -60F, the average is 14F in winter.

Can any of you please confirm my assumptions?

Projected Traffic Count (veh/month)= 172,361 (winter months included)
daily traffic count (2/10)= 20%
Potential Customer Base (veh/yr)= 413,667
yearly average capture %rate = 3%
Composite= 0.006
Vehicles at % Captured(month)= 1,034
Vehicles at % Captured(day)= 34

Standard wash Price= $10
Material Cost=$1
Utility Cost= $4
Net Profit=$5

%margin is 50%
Material cost assumes 10% sales
Utility cost assumes 40% sales
Capital investment of $200,000 (1 bay~ touch less + Building???)


Year 1 economics:
Vehicles at % Captured (yr)= 12,410 (or 1,034 month or 34 in one day)
GROSS profit/yr= $124,100
NET profit/yr=$62,050
NET profit/month= $5,171
ROI/yr=31%
It gets fully paid-out in 3 years

Please advise me:

Are my calcs accurate?
Did I miss something?
Which In Bay Automatics would I consider? Cost?
Do you have experience with extreme cold weather? It implies additional services and shut-down after temperatures of 5F?

Thanks

JGX

 

[Buzzie8]

At first glance, here are the problems I see:
1. Capture rate is too high
2. Total expense ratio of 50% could be right but not correctly allocated.
3. Capital Investment is way off, Equipment, building, land, permits, site work, and everything else would be normally much higher. Ballpark at least $600k for 1 Automatic Bay (probably higher).
4. I would never build a one bay automatic. Cannot capture enough of the market on busy days and there are too many costs associated with building a wash to open only one bay, that's unless you are going to a full service or flex service wash which requires additional labor costs.

Private Message me and I can give you some good resources to get better educated on the business.
Buzzie

 

[JGX]

thanks, much appreciated

 

[robert roman]

Again, who said I was talking about you or your book.

Since I have not read your book, how could I possibly criticize it?

And yet, you criticize me.

“Even in your world of the so called declining world of In-Bay automatics and SS's there's tremendous market potential for good owners.”

There are tremendous “opportunities” within self-service, market potential for new sites not so much.

http://www.autocareforum.com/self-serve.html

Please show me something in this that is false, not accuracy but falsehood. I don’t make this stuff up.

Growth is for faster in-bays, better POS and chemistry to up-sell at existing self-service sites and continued penetration of in-bays in the gas station and convenience store industry and at auto dealerships.

Self-service operators who choose to benefit from POP, express, flex-serve and marketing like customer surveys, loyalty programs, website, community involvement, etc. are going to succeed at the expense of other self-service operations.

Yes, people should and will build new self-service where there is public need but please show me something, anything that shows the self-service “industry” is growing.

If you have the market, what would you rather have? 5 + 1 that is struggling to gross $150K or a property that grosses $400K or more?

“Those who can, do. Those who can't teach.”

You can also say those who can’t teach, shouldn’t.

If you are a competent operator with passion enough to write, I’m sure your book is illuminating to new-bees. Purpose accomplished.

 

[bigleo48]

Back to the OP's question....

First, the Canadian Market can be much different that the US. For example, big oil owns more than 90% of all automatic car washes. More than 25% of their washes are points redemption.

You don't mention land. That can be a kicker. Out of all the people who come to me and say "I want to build a carwash", my 1st question is "Do you have the land?". In most larger cities, land costs kills the typical IBA/SS wash model (land costs cannot justify that use).

What's competition like? Have you spoken to the city planning dept to see if someone else is planning one? Is your location vulnerable to competition (can someone build a wash in a better location and kill yours)?

Margins of 50% are OK...but typical standalone IBA costs in Canada are about $400K and up on a piece of land that you own, is serviced and does not require much development or tear down of existing structures.

Where are you in Canada?...big country with varying weather and customers.

Lastly, just an IBA doesn't make sense and you miss out on a good portion of the opportunity. The game is to extract as much $ from a customer when on the property. At my Canadian wash, I have 8 SS bays, 1 IBA, 5 shampoo vacs, fragrance machine, air machine, WW fluid machine, 2 vending machines, 2 pet washes, detailing services, ATM, skate sharpening, etc...you get the picture.

PM me if you have any questions...

 

[RykoPro]

What did I miss? looks like something was deleted.........

 

[Buzzie8]

What did I miss? looks like something was deleted.........

My guess is that you can chalk it up to selective censorship.

 

[MEP001]

My guess is that you can chalk it up to selective censorship.

The only posts I see missing from before are the ones where accusations based on assumptions were made.