How to Buy a Car Wash Business
A car wash can be a profitable business, but buying one will take some research.
Related Articles
- 1 [Car Wash Business] | How Much Money Is Needed for a Car Wash Business?
- Two [Car Wash Business] | Pros & Cons of Kicking off a Car Wash Business
- Trio [Car Wash Franchise] | How to Buy a Car Wash Franchise
- Four [Car Wash Business] | Commencing Your Own Car Wash Business
The car wash industry is big business, generating more than $24 billion in sales worldwide each year, according the International Car Wash Association. A small-business operator can get into the business by buying an existing car wash for as little as $80,000 for a single-bay, self-serve car wash or $1.Two million and up for a full-service, conveyor car wash, according to insideselfstorage.com. The key is knowing the kind of car wash you wish to buy, researching the area — including the local weather — and developing a solid business plan.
1. Determine on the kind of car wash you want to buy. The three types of car washes are: the self-service — or wand style — where the customer drives into a bay and washes the car himself; the in-bay — or rollover — a style of car wash common in gas stations, where the customer drives in and a soft-foam or touch-free device literally rolls over the car to clean it; or a conveyor, where the car is pulled through the car wash. A conveyor can be a full-serve business, where the customer exits the car and your workers clean and detail the inwards and outside of the vehicle or a flexserve, where the customer remains in the car during entire conveyor-cleaning process.
Two. Identify the location by looking at the visibility and characteristics of the site, says the International Carwash Association. In terms of visibility, can the customer see the car wash lightly while driving by? Does the car wash have pleasing architecture, good lighting and landscaping, and suitable signage? As to characteristics, does the facility have broad, well-maintained driveways and sidewalks? Is the car wash in good form? If it is not, you’ll have the pay for renovations or, at least, negotiate a discount on the price based on expected repairs that will be needed.
Trio. Investigate the traffic pattern, says the International Carwash Association, including traffic speed — the slower the better in front of the car wash — and whether turns are effortless or difficult to make. Also, look at the potential capture rate — the percent of cars driving by that are actually "captured," or stop to use the car wash. According to a survey by "Professional Carwashing & Detailing" magazine, capture rates range from 0.45 percent for exterior-only conveyor washes to 0.52 percent for full-service washes. If 20,000 cars drive by the wash each day, that translates to ninety cars a day for a self-service wash (20,000 cars a day X .0045 capture rate = ninety cars). That may not sound like much, but over the course of three hundred sixty five days in the year, that would translate to almost 33,000 customers. — if the car wash attracts that number each day. The problem is the weather — on rainy or cloudy days expect to see significantly fewer cars.
Four. Check out the competition — and Don’t leave behind to look for gas stations in the area. They may have in-bay car washes that could challenge with your prospective business. Even if they don’t presently have an in-bay car wash, they might install one in the future, notes Chris Simeral, author of "Begin Your Own Car Wash." Also, ask the holder of the car wash you are considering purchasing for financial statements for the last three years. If the possessor offers to provide only the past three months or so, that might not suggest an accurate representation — as weather, for example, can greatly affect the number of customers who visit the car wash business. Only several years of financial statements will give you a total picture.
Five. Obtain financing. In addition to the cost of buying the car wash, know the projected revenues. For example, Simeral estimates that a single-bay, self-serve car wash can generate $50 a day. Multiply that by three hundred sixty five days to yield about $Legitimate,000 a year. For a six-bay car wash — which would cost almost $500,00 to purchase — you could expect to generate almost $110,000 annually. The revenue, of course, depends on the type of car wash. According to Auto Laundry News, a single in-bay car wash could produce $90,000 a year, and a full-service wash would generate more than $280,000. Take the suitable projections, copies of the financial statements and even information about the projected capture rate to your lender to obtain financing.
6. Make the suggest to the current holder of the car wash. BizQuest estimates that average profit is about thirty to thirty five percent of gross revenues for car washes. The general rule for determining the purchase prices is two to Two.Five times the annual profit plus the cost of the real estate and equipment less an allowance for capital expenditures. Using the previous example, for a six-bay wash making $110,000, your cost would be $220,000 to $270,000 plus the cost of the land, which varies greatly per area.