How To Avoid A Car Wash Catastrophe

+ more

The Car Wash and Auto Detailing industry is already worth over $11 billion, and that number is expected to increase over the next 5 years.[1] The highly fragmented nature of the playing field makes it an ideal investment opportunity for a variety of savvy investors. The right location, strategy, and execution can create one, or a string of, successful small businesses that generate large amounts of passive income. Just like every opportunity, these rewards do not come without risk though.

Car wash locations are marked as special use buildings which can make liquidity difficult. There is also the risk of over-investing in resources and inventory. What many first-time owners fail to understand is just how complicated opening a new location can be. The best operator on earth can’t fix a business in the wrong place.

There are several factors that can determine the success or failure of a car wash before the first customer ever arrives. The best way to mitigate risk is with a solid plan. In this post, we’ll cover some of the most common and vital areas of risk and what steps can be taken to avoid pitfalls.

The first step in creating a successful car wash is developing a nuanced understanding of the different available models. Will the location be full-service? Flex and exterior? Some models, like the exterior wash, will generate an increased competition for optimal sites. The answer to these questions will be extremely important for determining the class and quality of a location.

After deciding on an appropriate model that fits your investment profile and risk tolerance, it is important to map out how you will select your location. Start by weighing initial costs with expected returns, but create SMART (Specific, Measurable, Attainable, Realistic, Time-Based) goals to reduce the potential for over-extending and inviting potential catastrophes. Experienced industry professionals who have successfully opened and managed several locations often utilize well-funded real estate teams to analyze the viability of all new locations.

The next step is pricing out equipment and supplies. Be careful to take information from manufactures with a grain of salt. They will make money even if your location fails. Brokers want to maximize the sale or lease rate. Everybody has their own best interest at heart and might encourage you to open a non-viable location.

It is important to remember that success in the car wash industry is a mix of smart location and operational know-how. Consulting with experts can reduce the risks of overbuilding and poor design.

At IRON FOX, we help you avoid risk with complete and sophisticated volume analytics to help you make the best investment decisions. At the start of planning, we offer a free preliminary site inspection and analysis. Our many years of experience in retail site selection for carwash operations as well as operational knowledge allow us to assist you in decision-making to set your business up for success.

Read more at ironfox.co

Learn more about how IRON FOX can help you avoid risk in your next carwash venture.

[1] https://www.ibisworld.com/industry-trends/market-research-reports/other-services-except-public-administration/repair-maintenance/car-wash-auto-detailing.html

Latest

What’s Next in the World of Email Automation?
April 23, 2021
Greg Norton is a Marketing Cloud Account Executive at Salesforce, and he shared his thoughts about what's next in the world of email and automation, "I could think of it in terms of three Read more
Empowering Better Communication among Community Healthcare Stakeholders
April 23, 2021
The challenges healthcare executives and administrators face are constantly changing. Host Kevin Stevenson talks with the heroes behind the heroes that are enabling hospitals, urgent care centers and telemedicine Read more
How a Year of Disruption Bred Unprecedented Innovation in Education
April 23, 2021
How do you extrapolate insights on pandemic leadership, the role of women in EdTech, and the dynamics of Zoom in just over 20 minutes? Listen to Kelli Campbell, President of Discovery Education as she Read more