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A FEATURED ARTICLE FROM

FEBRUARY 2002

Government Fleets:
Opportunities Abound

By Michael Keating

No question about it. The government market of the future offers a lot of potential to car wash operators and detailers. The latest Highway Statistics report (on the Web at the Federal Highway Administration web site http://www.fhwa.dot.gov/ohim in the Highway Statistics Series) shows local, state, and federal government fleets now total more than 3.8 million vehicles, an increase of 58,712 vehicles over year-earlier totals.

What's more, local governments often spend sizable amounts on vehicles and vehicle maintenance. Both St. Paul, MN and Ramsey County, MN, for instance, rank motor vehicles and auto maintenance near the top among all spending categories for those governments. Spending for vehicles ranked 6th among all commodities for the city of St. Paul, while Ramsey County vehicle expenditures ranked second in outlays (among 90 commodities) reported by government administrators in that community.

LOCAL GOVERNMENTS

For professional car wash operators, it's really a no-brainer. All 87,453 local governments in the U.S. can be a steady revenue source or even a business bonanza for operators who take the time to get to know the market. See the Table 1 (below) for the U.S. Census Bureau's latest Census
of Governments breakout of local governments units.

TABLE 1: Local Government Units in the U.S.
Level Number
Counties 3,043
Cities/Municipalities 19,372
Townships 16,629
Special Districts 34,683
Independent School Districts 13,726
Total 87,453

* Source: Latest Census of Governments

Both business owners and government officials see stable opportunities for car wash operators and detailers who want to sell to governments. "I think you have to look at the positive aspects of government fleet business. It can keep cars coming in the door," says Bob Roman, a former car wash operator and program manager for the Pinellas county government in the Sunshine State.

Roman cites the following example: "On the slowest days of the week like a Tuesday or Wednesday morning, we would sometimes wash as many as 14 or 15 police cars. You know what they say in the business, activity draws activity. It's an impulse sale. Motorists see cars being washed, and they tend to pull in, and say 'Geez, the police officers are getting their cruisers washed here, they must think this car wash does a pretty good job.' It's good public relations."

Roman adds: "Furthermore, that's why I never really worried about making very much money off of
cleaning the police cars, because they gave us good referrals. They said, 'Hey, these guys really take care of us.' Although the county or state paid a discounted price for a basic full-service wash, the officers really appreciated the fact that I never thought twice about putting on tire shine or throwing in other extras like spray wax or a fragrance." Roman is now affiliated with RJR and Associates, Car Wash and Management Consultants, which is based in Clearwater, FL.

Matt Fuller welcomes police traffic. "There's always a police cruiser pulling into one of our shops," says Fuller, who owns Fuller's Car Washes, with nine locations in the Chicago area. He adds: "The police business just makes us look good, like a Good Housekeeping seal of approval, and customers feel that ours is a pretty secure operation."

All together, Fuller's nine locations do between 400 and 500 police washes a month, with cruisers coming in from about 50 different village police departments around Chicago. "We offer about a 45 percent discount on a basic car wash to the police, and it's worth landing the business," says Fuller, and adds, "Besides making 50 cents or a dollar per wash, you also get the security going through your operation, and customers are used to seeing a policeman there all the time." What's more, Fuller continues, "Governments pay on time, and it's steady business for our crews."

Yes, doing business with your local city or county fleets can yield steady income. "Government business can be good for a car wash operator in slow times; you never have to worry about the government going bankrupt. The check's always good. It's like guaranteed revenue for the average car wash," says Mike Kellar, fleet manager for the city of Worthington, OH, which is a suburb of Columbus.

Kellar compares the government and consumer markets this way: "Governments at all levels are always going to be in business. For car wash operators, the revenue from city business is almost a guaranteed amount that they can put on their books as income coming in on a regular basis. Consumer sales, on the other hand, you can't always depend on. Operators may never know why their retail customers stop patronizing a particular car wash at any given time."

Kellar adds, "We use a local car wash operator to do our fleet of about 65 vehicles. Cars, small trucks and vans are about all we can run through this local shop, which is next door to a service station." Worthington's population is about 15,000.

Most of the Worthington fleet is made up of vehicles from the following divisions: Police, Service Department, Public Works, Parks & Recreation, and the Fire Department. "The city doesn't bid out the fleet washing business," Kellar explains. "We usually go on a month-to-month basis. It's usually a minimal amount, and it's under the required bid threshold. Where we have the vehicles done now, the unit cost per vehicle is about $2, and that covers a wash, rinse, and dry. The police cruisers are done at least once a week; in fact, they probably average a little better than that, probably twice a week. Staff cars, on the other hand, are done very infrequently, probably around once a month."

To reduce paperwork and speed cash flow from local governments, car wash operators may want to rely on prepaid car wash coupon books, says Bruce Zavotka, owner of Team 2000, a hand car wash and detailing facility in Cleveland, OH. "I provide the police with an invoice, they give me a check, and I give the officers coupon books," says Zavotka.

TABLE 2: Government Fleet Counts, by Level of Government
Level of Government Number of Vehicles
Federal 497,993
State, County, & Municipal 3,336,330
Total 3,834,323

* Source: Federal Highway Administration

"When the police drive in, the only thing that the officer has to hold is a ticket, so there's no dealing with cash. So I get my cash up front, and I give them a book, and then all the dispatcher has to do is hand the tickets out and there's no cash getting misplaced. That way, we don't have to wait 45 days to get our money," says Zavotka, whose Team 2000 operation has been in business since 1994.

How much revenue can a car wash operation get from city business? "Working with our local community, which in our case is Lakewood, OH (population 57,000), can yield possibly $5,000 or $6,000 more per year doing city vehicles," says Zavotka. "It goes beyond just landing the car wash contract with the city," he adds, "you have to service your local government fleet customers and make sure that their superiors are happy with the service."

Who should the car wash operator approach when trying to land government business? "Although each government agency is a little different, typically it is the department's administrators who establish criteria for outsourcing and have purchasing authority," says Bob Roman. He explains: "With the county, we had to deal with the Fleet Department's administrator, whereas with the state police, we had to deal with the agency's district administrator." Car wash operators may be asked to submit a proposal to county government managers before the start of that county's fiscal year, adds Roman.

Team 2000's Zavotka says personal networking will help operators succeed in landing police fleet business: "You need to get down to the grass roots. Start with the officers and find out who their bosses are. Work with the individuals who are the decision-makers in the precincts or in the overall police department. When you approach the individual precincts, the smaller operations, show how your location is convenient to the department. Oftentimes the officers want to work with someone right in their neighborhood."

TABLE 3: States With the Biggest Government Fleets
State Number of Vehicles
Texas 544,857
California 463,958
Florida 282,321
New York 198,377

* Source: Federal Highway Administration

What local government departments should car wash operators target for prospecting? Government Product News' (Cleveland, OH, www.govpro.com) latest fleet survey shows the following local government departments have the highest fleet counts for vehicles, including cars, vans, and light trucks: Public Works Department Department of Transportation Law Enforcement/Police Administrative Departments Parks & Recreation Utilities City Service Departments Emergency Fire Department SELL TO UNCLE SAM Readers should go to the following site to locate federal fleet managers in their area: http://www.fss.gsa.gov/vehicles/leasing/centerinfo.cfm These fleet managers can advise on opportunities for operators, says Don Gard, transportation operations specialist at the General Services dministration's Kansas City regional fleet office (Region 6).

STATE FLEETS

"Many states use a combination of in-house and contract services to maintain their fleets," says Joe O'Neill, executive director of the National Conference of State Fleet Administrators. He adds: "I would contact state, city and county fleet managers to determine their present system of vehicle washing and build a data base of potential contacts in my market area. That is the slow, hard way, but it's the most focused approach." The 2002 National Conference of State Fleet Administrators annual meeting takes place at the Hilton Hotel in Mystic Seaport, Connecticut October 22-26, 2002. For more information, go to http://ncsfa.state.ut.us Michael Keating serves as research manager for Penton's Government Product News, Government Procurement, and the Government Market Newsletter. He also is a business development associate for the NineSigma research & development web site (www.ninesigma.com) Contact Keating via e-mail (ship@en.com) for more information about the Government Product News fleet study mentioned here.

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