The Detail Shop — Design to Meet Challenges
With future growth in the U.S. car wash industry pegged at 1 percent per annum, the auto detailing business is beginning to look more attractive.
According to the International Carwash Association there was an estimated 10,000 freestanding detail shops in the United States in 1998 with average annual revenues of $1.99 billion. Based on statistics, as researched by R.L. “Bud” Abraham, president of Detail Plus, today there are 14,000 detail businesses up from 4,000 in 1980.
If these assumptions are reasonable, the trend in the detail shop category’s share of the total car wash market over the last decade would be steady at 8 percent.
Motor vehicle sales will continue to define and influence the car-care appearance industry. According to Briefing Research, the lack of vehicle sales growth has caused a structural shift in the fundamentals of the vehicle market. Prices, scrap rates, vehicle age, cars per driver, and number of licensed drivers are all outside historic equilibrium levels.
This poses short- and long-term consequences for detailers. For example, the average age of passenger vehicles has risen from 8.5 years in 1995 to 11.0 years in 2011. So tight has the market become, there are not enough low-mileage used vehicles available to meet demand. Analysts at Briefing believe all of these factors suggest high pent-up demand for new vehicles.
Detail suppliers are seeing an increasing trend in automatic washes moving away from restorative detailing toward the express “maintenance” detailing, exclusively. Suppliers also see a steady trend in the number of “on-site” detail operations located in new car dealerships as well as dealers who added an automatic car wash or vehicle polisher to their stores.
There are also other trends to consider. For example, the construction trend today is express exterior conveyor, meaning that most new washes today do not offer their customers any assisted-services.
Additionally, the self-service segment is treading water. Weaker markets, less demand, deflated property values, and competition from express has created a number of properties that could easily be made over to a detail shop with car wash. There are also lots of abandoned small gas station properties available.
Consequently, even with a down economy, it seems there are opportunities for detailers to increase their chances for survival and growth. To demonstrate what is possible in the detail industry today, and where the “generic” detail shop is by comparison, we provide a snapshot of 24-year old Ross Timyan who owns Crystal Clean Auto Detailing LLC, in Wyoming, MI.
According to business blogger Chris Knape, Timyan began detailing cars when he was 15 years old. Today he owns a 40,000-square-foot former factory with detail sales approaching $1.0 million and employing about 40 people.
Up from 2,500 vehicles in 2009, Crystal Clean is on track to service 7,500 cars. Timyan plans to double business by expanding into vehicle storage. In 2011, he leased a 60,000-square-foot building to serve as long-term, climate-controlled storage for seasonal cars, recreational vehicles, and boats.
Crystal Clean is no ordinary detail shop. Vehicles can get exterior and interior detailing, paint and dent repair, and stain removal. Lamps are hung low to shine on the vehicles. A complete detail can cost up to $225. Dealerships pay $150 plus $30 for a group of photos to put on their sales website. About 80 percent of Crystal’s business comes from 25 car dealerships.
Timyan also offers an “airport valet” service, picking up cars at Gerald R. Ford International Airport to be detailed while the customer is away. Innovations like the airport valet and photo booth led the company to be named a finalist for the Innovation Michigan Award.
Arguably, Crystal Clean is representative of the upper bound or perhaps the upper 1 percent of the detail industry. Let’s look at how the generic detail shop stacks up.
Table 1 is not an apples-to-apples comparison, but rather it illustrates difference in business models and the detail shop owner’s dilemma. Crystal’s niche market is car dealerships and, as shown by cars per square foot of store, Timyan has a facility with excess capacity that will allow his company to continue to grow.
The generic detail shop, on the other hand, has three service bays, and the average job takes 4.7 hours. This translates to a store use rate of 83 percent. In other words, the generic detail shop could only grow up to one more car a day.
The main task for a detail shop operator is to offer quality services. To achieve this, an operator needs a well-organized service center. A good design objective is to provide repair and maintenance work and supply inventory.
Experience shows absence of the right equipment, improper organization, lack of training, and unavailability of inventory can seriously affect quality and efficiency of service work. So, a good design would result in the best layout of a workshop and facilities as well as organizational structure and procedures.
Since location has such a large influence on the overall success of retail stores, site selection is the number one consideration in designing a detail shop.
For example, Figure 2 shows Crystal is located in the midst of a commercial/industrial area where rents are inexpensive as compared to, say, a CVS pharmacy located on a hard corner.
On the other hand, Figure 3 shows Magic Detail in Clearwater, FL is highway-oriented with accessibility and visibility to traffic and businesses. Surrounding development is support services that attract motorists, and residential homes predominate. Rents for such properties are about $2.50/square foot/month. The generic detail shop pays $1.44/square foot/month.
Some vehicle workshops use a single-speed bay service layout. This includes working bays of 15’ by 25’, a workbench, airline connections, good lighting, and access to inventory and tools. A single-speed bay implies that one technician is employed in a bay to carry out work on a vehicle.
Other shops, like brake and muffler stores, use a drive-in and drive-out service bay to save time by having good access and exit points. This layout is a process type where different types of services are performed. It usually operates where vehicle population density is low.
Prior to being forced to move and make way for road widening, and eventually a new bank, Magic wanted to improve the store’s benchmark-like performance.
As shown in Figure 4, however, Magic’s workshop fits the description of the single-speed service layout with drive-in/drive-out service bays. As discussed earlier, this is simply the wrong design for locations where vehicle population density is high. Magic’s dilemma was solved by innovating and adapting the flow-line layout.
A flow line is similar to a conveyor car wash where equipment is arranged along a line with machines at each stage of the wash process so a continuous flow of cars can move along. A flow line must merit the use of space and investment required, and it is locations with high vehicle population that can merit standard equipment on the line.
Although it was not practical to build a conveyor on this site, it was feasible to mimic one by wrapping a flow line around the building. As shown in Figure 5, lines were painted on the pavement to form an entrance or starting line where the customer is greeted and the sales transaction begins. The next stages are vacuum interior, hand-wash bay, and finish line where the vehicle is detailed and made ready for the customer.
Operating in this manner, production capacity goes up from 10 washes a day to 10 an hour. At $20 a pop, the difference in gross sales between 10 and 50 washes a day is $800, or about what the typical detail shop takes in on an average day from all operations.
Forty additional guests a day also increases the likelihood of selling detail services to car wash customers and vise-versa. Another benefit is the flow line does not interfere with the detail shop operation because vehicles would be shuttled in and out of the detail bays, at most, twice a day.
Another option to expand the business would be to work two people per car to complete detail services, thereby freeing up one of the service bays to produce express detail services.
Of course, doubling business doesn’t happen overnight or in a vacuum or else everyone would be doing it. However, I believe this article demonstrates that workshop design is a key factor detailers should consider in solving challenges, providing customers with affordable and quality detail services, and generating a profit.
Bob Roman is president of RJR Enterprises — Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at email@example.com.