Remedies - Making a Sick Business Well

By Robert Roman

03/01/16

Over the last six or seven years, more and more of my business contacts have been related to buying or selling a car wash or curing a sick business rather than building a new wash. Sick businesses are interesting from one perspective because the literature only contains profiles in success. So, what is a sick car wash business?

Most car washes are lifestyle businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income or to provide a foundation from which to enjoy a particular lifestyle.  So, sick means the founders are not happy.

Some of these owners placed too much trust in operators and suppliers throwing around big numbers. Others failed to achieve goals and objectives because they simply didn’t put enough time into the business, while yet others saw new entrants nipping at their heels.

One thing most of these owners have in common is the realization that car wash success requires more than traffic counts, household income, and cost.

One reason lifestyle businesses succeed is personality. Personalization or customization involves using things (e.g., cell phone technology) to accommodate the differences among individuals. For example, moving from Internet desk to showroom cars sales is often a tough transition for a salesperson because Internet sales require a different skill set and mind set than showroom sales.

Internet sales require the ability to structure an entire sales deal without a manager, a good phone voice and enunciation, solid writing skills in e-mails, and plenty of self-motivation.

Likewise, car washing is a contact sport where many owners try hard to put a happy face on the business and take great care in creating and grooming their brand. 

 

For example, shown above are “Beary” and a vintage picture of Brown Bear Car Wash founder Victor Odermat, which pretty much sums up how personable this business is.

Another reason lifestyle businesses succeed is the experience. A car wash is more than a clean, shiny, and dry vehicle. People also expect a pleasant experience. For instance, I don’t know anyone who would find waiting for 20 or 30 minutes in line to have their car washed a pleasant experience.

So, if an in-bay automatic has deep lines, one remedy would be to find practical ways to increase hourly capacity rather than adding foam products and flashing lights. Conversely, if there are no lines, remedies would be to find practical ways to increase customer attraction rate and create a customer loyalty program.

In both cases, it would be more prudent for a sick business to rely initially on ingenuity and little investment of capital rather than bet the farm on a major capital investment (e.g., pay stations or a mini-tunnel).

However, this is often difficult for sick businesses because suppliers tend to be more interested in selling new equipment than modifying old parts and systems.

Giving back to the community or reciprocity is another reason why lifestyle businesses succeed. However, this is difficult or impossible for a sick business because of sales.

Again, a sick business would need to rely initially on ingenuity such as public outreach and involvement in local organizations and social activities that do not involve giving away free stuff.

Experts say another reason lifestyle businesses succeed is because the principals are very good at story telling. However, a sick business does not have much of a story to spin.

In the final analysis, curing a sick business requires cooperation of the patient even in the case of making changes to better align an exit strategy to the industry model.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.



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