Auto Laundry News - July 2011

The Challenge — How to Meet It, Survive, and Prosper

By Robert Roman

This is a story of a car wash owner located in the Southeast United States who faced a considerable challenge to his ongoing full-service wash and detail business.

The challenge was someone planning to build an express exterior wash with pay stations and free-use vacuums less than a mile from the owner’s wash. Moreover, this was to occur in the face of rising operating expenses as well as a downturn in the local economy.

The full-service wash in question is long-standing, successful, and performing better than the benchmarks. The wash had paid the owner’s bills, given him a reasonable standard of living, and allowed him to save for retirement.

Faced with this new threat, the owner decided to search for possible improvements to make his wash more attractive to potential customers, more profitable to operate, and more competitive —before it was too late.

At first, he contacted other car wash operators, read all of the trade journals, surfed the Internet, and contacted equipment distributors.

The owner’s initial strategy was to add the in-car, ride-through experience by dedicating one of his entrance lanes to sell express exterior washes. This was well received by customers and led to an increase in sales volumes, but his average sales dropped by over $2.

Soon afterward, the owner felt that he needed to try something a little different, hire a car wash consultant.

Car wash consultants are not difficult to find. The owner searched for them in the trade journals and public forums to get a sense of what they might offer and how they viewed the industry.

The owner discovered that finding a consultant was a little time consuming — he wanted one with broad-based knowledge as well as one that would listen to his concerns and provide information the way he needed it so he could best use it. He wanted direction but did not want to just add another payroll expense. He wanted information, opinions, and options but did not want someone to handle all of the details.

The owner found there were many consultants available with equal expertise and flexibility, but settled on the one that offered the right combination for him.

After the consultant completed his initial work, the car wash owner set out over the next several months with a plan to implement the recommended changes and a budget. While there were some suggestions that the owner did not use, many of them were put to use without any reservations. His results for the first year were very good.

Comparing the weather year-to-year for his area showed little difference. The owner’s car count rose by 17 percent and net site-sales by 12 percent. After that, the growth continued with a 34 percent increase in car count and 29 percent increase in net site sales. There have been many positive comments about the improvements from his customers. Moreover, this growth occurred in the face of the new express wash, now open and washing cars at a base price of $3.

How were these gains realized?

The first step in the process involved a very thorough interview to discuss a wide range of topics covering the owner’s concerns, goals, and objectives as well as market, technical, economic, and financial issues. In addition the business model, management and operations, and an exit strategy were considered.

After about a week, the consultant submitted an evaluation report and then discussed and interpreted the results with the owner. This included past and present financial performance, perceived strengths, weaknesses, opportunities, threats, an objective strategy, possible tactics, and an action plan.

The plan contained various options designed so the owner could make the most of his site location. There were options to address changes to building, signage, products, services, marketing, management, operations, and equipment. The owner was able to choose those areas that he was comfortable changing and ignore the ones he felt were not right for his business, which is exactly what the owner wanted from the perspective of an impartial observer.

By engaging an independent consultant, the full-service owner not only withstood a substantial threat to his livelihood from a $3 car wash but also prospered in the process. Moreover, the overall cost of the changes including consulting fees was modest and provided the owner with an excellent return on investment.

In the final analysis, an independent consultant is certainly one option for car wash operators to consider to help protect their livelihood and quality of life.

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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