Teach an Old Carwash New Tricks

Turn that ugly duckling back into a profitable location

Editor’s Note: This is the second of a two-part series examining the steps that go into refurbishing a carwash. The first installment appeared last month. 

Last month we met Dan and Charlie, competing carwash owners operating similar washes in the same town. Dan built a profitable business by performing regular maintenance on his equipment and frequently updating his location, while Charlie did only the bare minimum. Years of neglect and dwindling business eventually forced Charlie to sell his carwash to Dan.

Dan understood the need to constantly evaluate his business and that the way to remain profitable was to continually make necessary changes, upgrades and retrofits as they became available. Shortsighted wash operators like Charlie, who fail to treat their carwashes as professional businesses, wind up losing customers, profits and, inevitably, their operations to competitors like Dan.

There are a number of ways that an ugly duckling with dipping sales can be transformed back into an attractive location. Similarly, for wash owners who suspect that their operations may be failing, there are many strategies to turn things around before it’s too late.

Before Dan put in his offer to purchase Charlie’s rundown carwash, he had to find answers to some difficult questions. He listened to the advice of industry specialists and the contacts he had made within his local carwash association.

Dan often found that the best advice is usually free and doesn’t require someone to buy anything up front. Within the industry are many experienced individuals who are more than willing to share their wealth of knowledge and expect nothing in return.

Bob Roman, a respected carwash industry consultant, says that for buyers like Dan to evaluate a potential business opportunity properly, they need to answer the following questions:

• Is the business really a good fit with your quality of life?
• What is a fair price for the business?
• Are the books clean?
• What are the liabilities?
• Is there a potential upside to the market?
• How many competitors are there?
• Can the business be improved?
• Can you afford to make those improvements?
• How long will it take to recover the initial investment?
• Can you qualify for the loan and can you live with the conditions and terms?
• What is included in the sale?
• How long is training after the sale?
• Is there a non-compete?
• What are your exit strategies?

“If the answers to these questions are favorable,” notes Roman, “the acquisition probably makes sense. Otherwise, I would exercise caution.”

After some serious soul searching and evaluating finances, Dan moved ahead with the purchase and formulated his plan of attack. Dan knew that people who write down their goals are 80 percent more likely to achieve them, so

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines

Read Comments [0]