Return on a Reload

[Jaltavela]

I am looking for feedback on reloading an entire site. 3 SS, 2 IBA. We are newer to the business and knew when we purchased that we would need new equipment, but one of our sites seems like it needs it sooner than we thought we could manage. We believe it has some potential as its the only wash in the county of about 18k and its in front of the only Wal Mart in the area. Its gross the last 5 years has been $230-300k with a high of $360k in 2021. A total site reload is about $400k, that's pdq autos, we would have to finance that and it would spread us very thin but could be done. I read articles and talk to distributors and other owners who say you can see a 50% increase in business from a reload. My question is, have you guys seen this happen or are they just speculating? The current equipment is about 20 years old and the town does notice and talk about having to go to neighboring towns because of it, so we know that it needs to be done and do plan on it. But what kind of real increase could we expect in order to make our payments on the improvements?

 

[Waxman]

I think you should run the numbers with 10% volume increase, 15% volume increase, and 20 to 25% volume increase.

You should also plan to raise your prices a considerable amount to compensate for the cost of the new equipment.

When I reloaded my automatic, I went from $8, 10, 12, 15 to 16, 18, 20, 22. That price increase definitely helped increase revenue. my volume didn't increase by a ton, but right off the bat I am washing more cars than my best year with the old machine. I also have a lot more throughput on busy days and I have a lot less downtime due to repairs. These are all things to consider when buying new equipment. If you have 20 year old touch free equipment I'd say it's time to Buy something new.

I think 50% increase is a little high. Also, the Growth phase takes place over about five years. That's what a good friend told me and so far he has been right on the money.

 

[Jaltavela]

Is it worth it to reload one IBA at a time?

 

[DavidM]

How many cars are you washing in the two automatics combined? If it is less than 15k, just do one automatic. It sounds like a site that isn't busy enough to need two automatics at this point.
I'm assuming that you are not reloading the self serve equipment. That shouldn't need replaced after 20 years.
A 20 year old automatic that has a bad reputation can see a 50% increase but it might take 3-5 years, it is not an overnight increase.

 

[Jaltavela]

We would be reloading the SS as well. It’s unfortunately a very problematic iwash system. And it washes just about 15k a year so it’s right on the edge of needing two if we are able to increase business.

 

[Jaltavela]

I do like your suggestion of just doing one of the auto bays. Would you keep the other running as a g5 still or just shut it down entirely until business grows?

 

[DavidM]

If the G5 runs, I would keep it running. Keep spare parts from the one you replace. They can clean well with good chemistry.

 

[Greg Pack]

Would agree that it's time to think about a reload. I would think about one of each style, soft cloth and touch free. I would consider doing a thorough rehab of the better touch free you have now and add a new cloth auto.

Please upload pictures of your self serve pump station and a door. twenty years is not that old for a pump stand. A good tech could thoroughly rehab a 3 bay SS pump stand for 5-10K.

 

[Dan kamsickas]

twenty years is not that old for a pump stand. A good tech could thoroughly rehab a 3 bay SS pump stand for 5-10K.

Not for the i-Wash. It was a pretty exotic setup. PLCs and a weird injection system. A lot of DC controls instead of AC.

 

[Jaltavela]

Parts are also nearly non existent for the iwash from what i've seen. I'll get some pictures