By Steve Gaudreau
The most common misconception of the car wash industry by prospective operators is that washing cars is an easy business. I’ve had the same sentiment expressed hundreds of times: “How hard can it be? It’s only a car wash.”
The truth is that owning and operating any type of car wash is extremely challenging. Self-serves and in-bay automatics are the easiest end of the spectrum and conveyors are on the other side, starting with exteriors, then flex-serves, and the most difficult are traditional full-serves.
A well-run car wash is one of the most profitable businesses I know, but it is not easy. Here’s why:
In most of the U.S. (with the exception of the Southwest), a range of 2 to 3 days a week is lost to bad weather or the forecast of same. If the weather is exceptionally dry and favorable for washing cars, drought conditions can ensue and car washes can be shut down by municipal officials uninformed on how car washes use less water than driveway washers. Paying bills and retaining employees when there is no cash flow for a period of time takes planning, good financial management, and capital reserves.
Weather also makes employee retention difficult since most operators will cut back on employee hours when it rains. The impact is that there is a fair amount of turnover in the business and that makes management even more challenging.
There is a finite number of people in a given market area that will take their vehicle to any type of professional car wash. If too many car washes are built in a market, everybody suffers and the only businesses that win are ones that distinguish themselves from the rest. Price and service are how most operators attack this problem (i.e., my prices are lower or my service is better). A strong brand identity is the best defense, but there are currently no national car wash brands and very few regional brands that have more impact than price or service.
Equipment and Chemicals
Turning out a clean, dry car at high speeds in a safe wash environment is a very complex equation. The equipment package has to be sufficient to do the job. Most importantly, the installation has to be correct, and this is not always accomplished as easily as it might seem. Skilled, trained installers for the conveyor segment of the industry are in short supply. The chemicals have to be of sufficient quality to do the job and have to be configured properly. Routine preventative maintenance has to be conducted daily and monitored hourly. And most importantly, you need a manager who is capable of performing these duties. And this leads us to the most important variable.
You find a good location. It’s not overly competitive. You equip and build it right. Your marketing plan is excellent. You have the capital reserves necessary. So what could screw this up? Lack of a motivated, well-trained manager.
The car wash location manager is more critical to the financial success of a car wash than many other businesses. Is the manager of the video store you visit or the gas station where you pump your gas the reason you go there? I don’t think so. Although management is important in every industry, there are some where they are more critical than others.
In the car wash industry, the manager has to hire, train, and motivate employees who must endure variable hours, rarely have benefits, and usually do not see the car wash as a career opportunity.
They also have to deal with customer complaints, motivate their people to provide customer-friendly behavior, as well as sell extra services.
These managers also have to be very technically proficient on the equipment, chemicals, and computer software used to run the tunnel.
This is a tough job and the best managers are paid above comparable wages in other industries for all of the above reasons.
The problem is that these managers are in short supply. You need to have the ability to train someone to be a car wash manager. If you are new to the business, how do you do it? Most experienced operators will tell you that this is their number one problem in terms of expansion. So you need a plan on how you are going to get a manager and yourself trained on all of the above elements before you can have any hope of being highly profitable.
How hard is the car wash business? Pay attention to all of the above variables, get all the help you can, approach the business with a sense of reality and your car wash can be very successful—even if it’s not so easy.