Makeover - Budgeting For Car Wash Rehab

By Buzz Glover

04/01/16

It was December 2013. A perfect storm was brewing. I had built my first wash in 2004; it was now nearly 10 years old. An old abandoned wash that I thought no one would ever even consider rehabbing had a new owner and, even though the location was challenging, he was near completion on a rehab that would certainly have an effect on my annual sales volume, though I still had some distinct advantages. This was all happening simultaneous to me being approached by a regional car wash chain that was interested in purchasing my wash. I needed to make some decisions to ensure that I continued to keep my competitive advantage. I started budgeting for upgrades for my nearly 10-year-old three-and-two (three self-serve wand bays and two in-bay-automatic bays) car wash. What happened in the end will surprise most of you.

IN-BAY AUTOMATICS

As time went by, and my in-bay automatic equipment reached the ripe old age of 10, the wash started to become less and less reliable. In the early years, the business seemed much easier mainly because the equipment proved to be much more hassle-free. The equipment always required some level of routine maintenance, mainly replacing wheels and bearings and an occasional motor, but in the later years it was becoming troublesome — more downtime, more customer complaints, more owner hassles. It was clear that while I could continue to maintain this equipment at some level, it would require much more of my time or money, and that wasn’t what I signed up for.

The three-and-two wash as originally built.

I needed to budget for new in-bay automatic equipment. After receiving quotes from various manufacturers, I realized that I would need to budget nearly $130k-$150k for each of the two in-bay automatic bays. This expense of roughly $250,000 would be the most expensive of my upgrades if I wanted to move forward. This did not include the entry units that I had already upgraded almost three years earlier at nearly $25,000 each. This also did not include the expense of the automatic doors that were also experiencing much more trouble than when they were new. Doing an upgrade of the doors would be an expensive undertaking depending on whether I replaced just the openers or the doors and openers. This expense would easily exceed $20k for four doors, depending on what route I decided on. The total of the in-bay automatic expenses would require me to take a deep breath if I wanted to move forward.

LIGHTING

The lighting in all of my bays was beginning to be problematic as well. The self-serve bays had 10 250W metal halide lighting fixtures and the automatic bays had six fixtures each. The lighting was great, especially when you consider that I had lined my bays with a bright, white PVC wall product when I built the wash nearly 10 years earlier (one of the better decisions I made when designing the wash). Relining a car wash bay interior with PVC panels today would, on the low end, cost about $2.30 per square foot for material plus installation costs, but does allow the lighting to be much more effective.

The metal halide lighting was terribly energy inefficient; many of the ballast were failing, and the lenses in the automatic bays were becoming clouded. Excluding the parking lot pole lights, I had nearly 22 lighting fixtures to consider retrofitting with LED lights or purchasing complete fixture replacements. My budget, if I did the work, was nearly $250 per fixture for retrofits or $500 for complete new fixtures. With 22 total fixtures, my budget was $5,500 for retrofits and $11,000 for new or some mix of the two. This was a priority in my car wash makeover because it made the most sense for the ultimate energy savings I would gain from the upgrade.

SELF SERVICE

In the self-serve area of my business, the pump stand and pumps were continuing to perform at a high level. I also felt I still had a competitive advantage with my customers because I always offered 10 services at the controller/meter area of the wash. I also had always offered bill acceptance and, just a few years earlier, had added credit card acceptance in each of the self-serve bays.

The loyalty “club” system I had purchased when I first built my wash was a disaster from day one. The user interface was terrible, and it became non-functional in the very early years of the wash’s existence. There were systems available that were better designed, which I had explored. However, they required a complete refacing of the controller/meter area of each of my three self-serve bays. With the main “loyalty” unit and the controller/meter refacing, the upgrade required a budget of nearly $20,000 or more depending on whether I wanted to include the vacuums or not. This was an upgrade for which I needed to carefully weigh the advantages and disadvantages as I felt that I already had a competitive edge, but could do even better. While evaluating the loyalty systems there was still one major challenge, most of the self-serve loyalty systems did not integrate with the entry auto cashiers and their loyalty systems. This continues to be a challenge for the self-service segment of the car wash industry.

The vacuums were also still functioning at a high level and were well maintained throughout the 10 years. However, if I wanted to tie in the loyalty system this would be an expensive undertaking. The lighted canopies were beginning to fade after nearly 10 years. While I did not price having the canopies recovered with translucent material, I thought that I could have a local sign shop redo the canopies at around $1,500 each if I delivered and re-installed myself. I had three canopies, so I budgeted $4,500 for the recovering. I also used a figure of $1,500 per vacuum for the loyalty upgrade because the metering area (faceplate) would also need to be replaced to accommodate the loyalty system. I had a total of six vacs, so the cost of the loyalty upgrade would be nearly $9,000.

SITE AND BUILDING

There were other normal maintenance issues that needed to be addressed including asphalt, landscaping, and other typical building maintenance. While the asphalt was seemingly in good shape, it was clear that it needed to be sealed and line-painted again — an expense that I incurred every two to three years and that always made me “gulp” as it always exceeded $4,000 and in my mind did not have a dramatic impact on my bottom line.

The landscaping was becoming overgrown and did not give my business nearly the curb appeal that it had when I first opened in 2004. This was another one of those expenses that I had trouble relating to the bottom line. I knew that it helped, but at what level? To revamp the landscaping, a reliable landscaper would require a budget of $10k and that was the number I used.

Because I had made major upgrades to the wash only three years earlier, including the new entry auto cashiers and the installation of a reclaim system, totaling over $90k, I needed to really consider what all my options were at this point in my career as a car wash owner.

Here was my budget for the total car wash reface:
In-bay automatic equipment 
 

  • for two bays $250,000 - $300,000
  • In-bay automatic bay doors $20,000
  • Bay lighting upgrade $5,500 - $11,000
  • Loyalty upgrade to self-serve bays $20,000
  • Loyalty upgrade to vacuums $9,000
  • Canopy upgrade to vacuums $4,500
  • Asphalt sealing and line painting $4,000
  • Landscaping $10,000

If you total these, you have, on the low end, nearly $330,000 worth of upgrades. Keep in mind that this on a 10-year-old wash — new in many respects.

After being sold, the wash was reconfigured
as an express-exterior with free self-serve vacuums.

 

NOW, THE REST OF THE STORY

Just as I was beginning to investigate how I was going to finance this car wash “revamp,” the owner of that regional car wash chain I mentioned earlier literally just showed up at my door one day willing to meet my price. This, despite us having had previous telephone discussions about the sale of my wash — all without success. The advantages of selling the wash outweighed my interest in completing the upgrades.

What makes this story more compelling is that just after purchasing my wash, for what I felt was a substantial number, the new owner proceeded to do a radical overhaul of the wash making it the first of his 11 washes to be a “express-exterior” type wash. He demolished the self-serve wand bays, making way for self-vacuuming parking slots; retained one touchless in-bay automatic; and installed a conveyor in the second in-bay automatic bay.

Because of this transformation, he is able to wash four to five times more cars on those 20 to 30 days here in Pennsylvania after a snow storm when you can process as many cars as your equipment can handle. He also is using the “express-exterior” pricing model that makes it more difficult for the local wand self-serves to compete. I am glad he purchased my wash and did not open down the street from me, as it would have ended the story of my first car wash location much differently.

 

Buzz Glover is the author of “Car Wash Business 101: The #1 Car Wash Start-Up Guide” available on amazon.com and a downloadable version at www.carwashbusiness101.com. Buzz is also available for consulting for new car wash start-ups and can be reached at sglover@carwashbusiness101.com



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