Starting Out

[IowaGuy]

I have been reading about car washes since last summer. Needless to say, I have become very interested in the industry. I was wondering how some of you guys got started? Did you save the down payment on your own? Start a partnership with someone who could back you financially?

I want to get into the industry, but have a long way to go if I want to have the type of money needed to get going.

What would be the best way for me to try to get into the business? I have been in contact with a current owner of a car wash for the last several years. Would working with him in some form of partnership be the best way to get my foot in the door sooner rather than later? If so, how should I approach him about it?

Any help would be greatly appreciated.

 

[robert roman]

How you should proceed will depend on your personality, financial situation and the segment that you have an interest in.

If you have an interest in providing valet services, I recommend getting a job as an assistant manager trainee with one of the carwash chains. After about six to nine months of this, you would have a pretty good impression of what you would be getting into.

If you want to develop a mentoring relationship with someone who owns a self-service wash, you would have better luck doing so in an area where you would not become that person's competitor. The same would hold true for other formats.

You could also seek out a coach like a consultant or equipment distributor in your region to help teach you about the business.

You may also want to consider attending the carwash expositions (ICA and regional) to learn more.

There are also a number of industry related books that you can purchase to learn about the business.

If you surf the www, you will find a variety of on-line resources at your disposal.

Hope this helps.

 

[Red Baron]

I got into car washing for the same reasons many did, thinking it would be a good absentee business. I was right about that - once I got in there was a total absense of spare time.

I built my first 2-bay self serve on the cheap. I told people here I thought I could do it for $80,000 and most, not knowing the low cost nature of small towns in West Texas, told me I couldn't. Total cost was $76,000 including land, and it was a very nice wash, nice burgandy brick, state-of-the-art equipment, etc. But the revenue was unexciting in comparison to the work involved, so I sold it...then bought it back a few years later, then sold it again. Its for sale again and I keep reminding myself why I sold it the last time(s).

It's a good business to be in but don't get in thinking it isn't a lot of work.

 

[Waxman]

My Top Secret Formula

First I nurtured a love of minibikes, dirt bikes, vans, tractor trailer trucks and cars from a very young age.

Then I developed my skills at spiffing up my own stuff until I got good enough to get paid to detail others' cars.

Fast forward 10 years or so. With very little capital and some of borrowed from family and friends, I started a freestanding detail shop in a rented location with a family member.

We ran the business and developed a great reputation while making little profit. When some land (3 lots) went up for sale directly next to our shop, we bought it and the owner financed it. In hindsight it was a super deal and the best thing I may have ever done financially.

I bought a house with my sister and brother in law and we borrowed the downpayment. We fixed it up and later sold it at a nice profit.

I bought out my business partner, developed a carwash business plan and went to work for F.L. Roberts, a great business with several carwashes. I learned some about the business, but now realize what I learned was very little (my ignorance at the time). Then I built a 2/1 carwash on the land I now owned by myself and ran it and the rented location detail shop for a couple years. I used the land I now owned outright to help secure a bank loan for the carwash. I tried to buy the rented location, the deal fell through and I built a new, smaller but nice detail shop on one remaining lot next to the carwash.

 

[dclark3344]

Red Baron,
I just cracked up when I read the first line of your post. I too thought I could get in this business and keep my full time job (90 miles) away. I could come up here a couple times a week and "collect the money and add chemicals" WOW Yesterday I worked from 8:30AM till 6:30 PM on one automatic trying to find a ghost problem. A little niche in a wire.
Yes I quit my full time job in a couple of weeks and now work 7 days 365 a year. It sure does beat the confined factory life with shift work and I am now told that anyone with 20 years or more has a target on their back.

 

[IowaGuy]

Thanks for the feed back guys. I am not crazy enough to think that it will be an absentee business. The guy I that I know that owns a wash says you are pretty much married to the business, but isnt that true with any business you own? I am currently in the service industry so the idea of having to "work" weekends doesn't bother me. So, I guess I am ahead of the curve in that area.

I am behind the curve in financing aspect. Financially, I don't have the ability to come up with the large amount needed for a down payment, but if I were to approach my friend in the business about partnering with him, would that be my best option if I wanted to get going sooner rather than later?

 

[Bubbles Galore]

I bought my wash when I was 25. It was a ton of work! From the first meeting with the banker to the closing date was 156 days! It was a crazy roller coaster ride to make it happen, but it is so worth it!

Confidence is key. That was probably the only attribute I had going for me when I started shopping around for lenders. I made it clear that I wanted to establish a good working relationship with them. If they treated me like some punk kid (which I am ) and just gave me a loan app to fill out, I put it right back on their desk and thanked them for their time. Make sure you deal with someone that will respect you as a businessperson.

I didn't know anything about car washing when I signed the papers You can learn that part. Understand what you are getting into, but don't let that freak you out. There is a huge learning curve. I have been at it for 16 months now and have barely scratched the surface and all I have is self serve bays.

Best of luck and keep us updated.

 

[Red Baron]

The guy I that I know that owns a wash says you are pretty much married to the business, but isnt that true with any business you own?

Car washing is a little different. In our roofing business you can take extended periods of time off. When we finish a shopping center roof, we might take a month off to recoup. The car wash business allows me to, for the most part, choose which hours I work, i.e., the gantry needs greased twice a month but beyond that it really doesn't matter which day or what time. I collect the money, clean out the vacs early when people aren't there. But the downside is I can never feel comfortable being more than an hour away from the wash, because when things go wrong, and they will, I don't want to lose 1/2 day of business.

 

[Earl Weiss]

I was born into the conveyor business. My father and his 2 brothers were partners each runing a different location. All with gasoline - Full serve only those days. So, the fact that you went to work 7 days a week was normal. My mom alwyas told us "never ask your dad for anything on a rainy day". Once when shopping, she met the wife of another operator. She asked what she was shopping for? She said "A rain coat, we never go anywhere unless it's raining. "

I can say the EE model, even with after care option is less oversight intensive, and the Self Serve aspect even less oversight needed.

Dan Hanna once explained that he needed to charge higher prices because multiple sites needed an extra layer of management. That has always been an issue. Highering quality honest management personnel at a wage that makes addittional locations cost effective. Todays computer controllers make things a little easier to monitor.

 

[raisetheprice]

Car washing is a little different. In our roofing business you can take extended periods of time off. When we finish a shopping center roof, we might take a month off to recoup. The car wash business allows me to, for the most part, choose which hours I work, i.e., the gantry needs greased twice a month but beyond that it really doesn't matter which day or what time. I collect the money, clean out the vacs early when people aren't there. But the downside is I can never feel comfortable being more than an hour away from the wash, because when things go wrong, and they will, I don't want to lose 1/2 day of business.

BINGO! Extended periods of time off do not exist. You'd think you could coast a little when it rains for a week, but that's when you get in there and clean up all the gremlins that are hanging around, but the wash has been too busy to shut down and fix. If you can fix a lawnmower you can fix a self serve, automatics take a much higher level of skill and diagnostic troubleshooting. If you want webbed feet, you're at the right place. However, if you don't have the ability to pour money on the project in the beginning or along the way after getting up and running...it's probably not for you.

 

[newy]

Research and hard work

Iowaguy,I worked on building my wash for over 15 years! I started with the idea and went from there. I did the research, did the business plan, found the property, secured financing (after 5 declines from banks) used equity in home and cash. All this prior to construction, which took years. Zoning, planning, engineering and construction took another 4 years. So unless you?re serious and in for the long haul I suggest you buy an existing wash but a thorough due diligence is needed! It is not an easy business so don't fool yourself! Good Luck!

 

[IowaGuy]

Newy- from my research, your thoughts are right, look to buy an existing wash when starting off. A brand new wash is a dream that I think I will realize after owning my first existing wash. I have located a couple that are for sale, now is just a matter of finding some cash to buy one of them.

When researching an exisiting wash, what should I look for or where should I find information on them. I doubt it is as easy as sitting around and watching the place at various times of day on several different days, right? Is the financial info something the seller will be willing to share right away up front. I know some of the numbers may not be totally correct from what I have heard from many people and other sources. Any specific things I should look for when looking into a wash?

 

[dclark3344]

Iowa Guy,
I sounds like you are motivated and willing to get your hands dirty. I think many of the operators may be tired of the constant maintenance and upkeep. It could be beneficial for you to buy it "contract for deed". This way they get a steady income from it and you would be the one that worked it 24/7. Most sellers are aware it is difficult for most buyers to get financing right now and if motivated might be willing to sell and carry the note. I would see a CPA and discuss all the options with him. If you leased the carwash for say 10 years and then purchased for a small sum of money then you would be able to write off your entire payment and they would just claim it as rent income. I would make a commitment to them of the upgrades that you are planning and take them a fair offer. This would get you in business quickly. Just a thought

 

[IowaGuy]

dclark

I appreciate the response. The idea of buying on contract seems to me like a very good way to go about getting into the business. I will look into that idea. Now you got me all excited

Once again, I appreciate suggestion.

 

[soapy]

I think the first place anyone should start is by developing a proforma so you can see the money you can expect from a carwash then you can compare that to your local costs for one. Get copies of the trade magazines yearly surveys as well as the International carwash cost of doing business survey. THese will tell you how much to expect per SS bay, auto bays, vacs etc. total these up and then look at the expenses. Expeneses will be listed in these surveys also. Do several proformas from each scource and then you will have a feel for the potential. The ICA also has a complete book and class on getting started in the carwash business. It is worth taking the class for the first timer. I can draw up a proforma on a peice of paper now that is 95% acurate for my area but may not fit other areas of the country.

 

[Waxman]

soapy gave super advice and that is part of what I did; best case, worst case and hopeful average for 3 years pro formas.

 

[IowaGuy]

Would I be able to locate those magazines and get that info on the internet or am I going to have to dig to find that info since I do not have those issues?

I will start digging to find that info. Don't want to buy a car wash that can't do what I need it to do.

 

[Waxman]

Just contact autolaundry news and professional carwashing and detailing directly and order back issues.

 

[IowaGuy]

excellent-thanks for the tip waxman

 

[soapy]

If you can, try to attend the upcoming ICA convention in Vegas. All of the magazines will have their recent surveys out and they are free. It starts april 1 -4. Worth every penny if you are serious about this business.