How Much Can You Make Owning A Car Wash?
??? How much money can you make owning a car wash? The cost to build them, depending on how you're going to do it, is a lot. You can make a lot. Again, it depends how you run it. So I love buying businesses. I love flipping them. I've got a lot to say about this. Number one, the insights of financial performance of a car wash. Number two, the factors that influence revenue in the business. And number three, critical things to think about, mistakes that people make, how profitability gets taken away pretty quickly, and just some other expanded revenue ideas coming at the end.
???? So number one, insights to the financial performance of a car wash. How do you understand the difference between the revenue streams? So there are the simple ones where you hand wash, you do the vacuum, there's complete automation, and then there's also the detailing, where you have detailing and while your car is getting detailed, you provide a lot of other revenue. In addition, you have to recognize that it is location, location, location. And if you've seen them in town, they pop up almost in every corner. McDonald's real estate folks have already done the best geographic and geo targeting real estate searches in the world. So just notice where your location is and what you're going to need for water and power supply because a lot of people don't think about the infrastructure. So the other financial performance factors is just the startup costs, depending if you just want to buy the shells, where you can come up and can wash your car with a wand. It's all self help, self done. If you then go out and vacuum by yourself, if you do total automation where you can buy a membership and wash the car as many times as you want, or again the most lucrative is the detailing but then again what are you going to actually use for startup capital the more automated. They are more expensive, they can cost millions get set into full automation with all the tracks and everything just being completely automated with one attendant during the day. The one thing to plan for that most people don't and don't pay attention to is the seasonality of it as well as any pandemic effects. Clearly during the pandemic most car washes across the country saw a huge decline. People were doing them by themselves, they were staying home, they weren't driving as much and they weren't out as much. So really look at the P&L and you've got to look at the balance sheet. The financial performance of a car wash is, are ?you going to own the land? If you're going to put that much tenant improvement, and really improve the land and build that which is a little hard to convert into anything else. It could be different if you actually had you know greenhouses that you were going to grow one product, and you put another product in or a warehouse where you could use it for a variety of storages. Car wash is a car wash so you're going to get what you get, especially in the highest automation which is gonna cost you a lot.
???? Now number two, what are the key factors that influence your revenue? Again location, location, location, but it's also how you take money. Do you take cash? Do you take cards? Do you allow people to come back? Most of the places that I have been through, the membership is for one vehicle. So you can't just take a whole variety of your cars if your family has a lot of cars. It's one membership, one vehicle, and you buy over and over and over. So that actually puts quite a big cash machine into your pocket. Now, if you're going to take quarters, you're going to take cash, then how are you going to secure it? So you're going to need some sort of management or maintenance on site to take the quarters out, take the money out at night. I know you still in laundromats. We would actually go every several days and we'd actually, you know, withdraw the money depending again on the location and depending on how busy each of those locations were. Now, if you're doing hand washing and full detail and full hand inside detail, you're going to make the most money. You also have to consider it's less startup costs, but it's higher operational costs because you're going to have all the staff, you're gonna have more products, different kinds of products that each owner of a high, especially a high level vehicle, they're gonna want a certain kind of wax, they're gonna want a certain kind of soap, they're gonna want you to do certain things to their vehicle. So you really have to take all these into consideration and really price everything out before you just jump. And if you're looking to buy one, then your P&L is where you start. And I look at the customer records, are they tracking the customers? Because if they don't have a database, it's a little less value in my opinion for buying one because you're gonna have to create the database because what you really want to do is get into text marketing and say, why you upgrade from your one car wash you did today to a membership car wash or weekly in hand detailing. I love auto detailers because I love when they put them on annual contracts.
???? Before I go on, I tell you some of the mistakes in the profitability and things you can actually add for revenue. I want you to subscribe to my YouTube channel five days a week https://www.youtube.com/user/lorallive/videos. I want you to check that notification button. You should be here five days a week and actually listen to videos. We have this amazing learning journal (https://askloral.com/youtubejournal). ?It's all over our YouTube channel. It tells you what video you're watching, what did you learn about it, what are you going to do about it. I would love for you to grab these journals for you and your family. So however many family members are, grab one each and bring financial literacy into your family this year. So make sure that you are bringing financial literacy. It is up to you, parents, grandparents, aunts and uncles, to make sure the next generations are coming up financially literate. So upon someone's death, it's not a war, fighting about the trust, which is what I see why most generational wealth breaks down.
???? The really the critical decisions and mistakes we see people make is you don't really price out what it's going to cost and what the profitability is. So you pretty much assume the automated ones, the one that have less, you know, work involved in them, they'll make 40 to 100,000 maybe a year, maybe a little bit more. If you're doing really good marketing, you're getting a lot of free traffic. And even then, you could probably set up some sort of a swipe card with a membership or they get a little bit of a discount. They're doing quarters all the time. It's also more secure for you. The money goes right into your bank account. Also, the other things on profitability is the hand wash detail. Again, the auto detailing, they're making 400 to a million a Most details take anywhere between a low $150,000. I know like high-end cars are $350,000 to $400,000 to just do a complete inside-outside detail. So again, you have more operating costs, you have more just transactions and moving parts, but you're going to be way more profitable if you go that direction. And then while they're out of their car and you're detailing it or somebody's detailing it, you provide vending, you could provide coffee, you could provide all sorts of different food choices, something for them to do. I've also seen really, really higher level auto detailing shops allow local vendors to bring in some jewelry, bring in some different candies, bring in some different just things that are made in the area. So then that adds profitability. And again, those people aren't just leaving their product with you. You could actually get it on consignment for the most part, because a lot of them probably want it on consignment. And then you make the spread, pay them for the cost of the goods and away you go. But auto detailing and car washes is brilliant. You just have to keep them stocked. And again, it's another moving part. But there's no staff that's required besides somebody pick up those coins every night. So beware of operational challenges. My homework for all of you, if you're interested in buying any sort of a business that says like this, any sort of service based business is go interview a bunch of them in your area, out of your area. How do they work? You can imagine if you interview more people more transparent and telling you all of their inside secrets on how they get to capture more of the market share versus your competition that you're planning to set up a mile down the road.
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???? Do what I call modeling. Find a model company that's already doing what you want to do and follow their model implicitly. And probably my highest, highest and best advice for all of you, it would be to find partners. Find somebody who's already done it and get on their team. Maybe you're just a money investor in the beginning for the first round, and then you take on the operational on the second or third round so you actually know what you're doing. I want you to go to https://askloral.com/, ask, question, make a request. We are here all the time. https://askloral.com/ is a free ongoing process. Ask a question, make a request at any time. We are gonna be right back out with you. If for some reason the question doesn't feel like it's complete, then call into our office. Ask for a strategy session, https://calendly.com/askiws/.com.
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