If you operate a car wash, you know that weather and abnormal weather can disrupt the operating and financial performance of the business.
For example, in most of Florida, the peak or busy season for many retail businesses is roughly Thanksgiving through mid-April. The weather is very nice and there are tons of tourists and part-time residents or snowbirds that come to town. Consequently, business is usually great.
Conversely, during the slow season, it frequently rains in the morning, the afternoon, or all day long. The difference in car counts between these seasons for some car wash operators can be measured in hundreds of cars a day.
If adverse weather lasts for a period of days, or weeks, or if there is a particularly bad season, it can lead to reduced sales and cashflow, and, therefore, lower market value.
Some experts opine that such climate risk is local. For example, a company with a network of 50 car wash sites in many different locations is less vulnerable to climate risk than a small company with only one or two stores in an area.
Abnormal weather, often described as extreme climate events, includes occurrences such as heat waves, cold waves, tornadoes, and tropical cyclones, which can lead to drought, floods, landslides, economic loss, and loss of life.
According to Dr. Laura Dawkins, senior statistical scientist, Met Office, it’s impossible to predict exactly how severe a weather event will be and the associated impacts.
To illustrate, consider Hurricane Irma that made landfall in Florida back in 2017. Initially a Category 5 storm, Irma was forecast to impact the east coast of Florida so the governor ordered the evacuation of 6.5 million people.
Subsequent to landfall, the storm shifted direction and came up the west side of the state. Unfortunately, this didn’t give adequate time for an orderly evacuation as the east coast was evacuating. Consequently, many people had to hunker down and ride out the storm.
In my area of Florida, wind gusts reached 100 mph which damaged carports, garage doors, roof tops, and mobile homes, and downed trees, flooded streets, and knocked out power for more than a week.
More recently was Ian. After emerging from Cuba as a Cat 2 storm, Ian was predicted to grow to a Cat 4 then weaken to a Cat 3 or 2 and make landfall near Clearwater on Florida’s west coast.
However, the storm shifted subtly north/northeast, increased to a Cat 4, and made landfall further south near Fort Meyers, FL.
Ian obliterated Captiva Island, Fort Meyers, and surrounding areas and then moved N/NE through the state to St. Augustine on the east coast causing untold havoc and loss of life along the way.
As Florida governor DeSantis described, two entire counties, Collier and Lee, were taken off the grid. Off the grid means no electricity, no phone or Internet, and, in some cases, no running water.
As of this writing, the death toll from Ian stood at 79 in the state of Florida. Damage was estimated at $47 billion. More than 390,000 were without power. Seventeen hundred people remained in emergency shelters. Countless others were living in dismal conditions inside damaged homes.
Meanwhile, in Clearwater, just 130 miles north, peak wind gusts reached about 70 mph, damage was minor, and most folks had power restored within a day or so.
In other words, a two-hour drive by car meant the difference between a nuisance and a life-threatening catastrophe that will take some folks and businesses years to recover from.
Pundits opine climate change is responsible for more frequent and more severe extreme climate events such as Ian. Perhaps so, but some of the data doesn’t seem to bear this out.
According to data from the National Hurricane Center (NHC), the average number of major hurricanes strikes per year in the United States is six. This average hasn’t been exceeded since the 1940 – 1950 decade.
Similarly, NHC data also shows there is no discernable trend in the number or severity of major hurricanes that have made landfall in Florida (1851 – 2022). In the final analysis, it doesn’t matter if the extreme weather is a 30-year average or 100-year event. It only needs to happen once.
Pundits opine that we should reduce extreme weather risk by tackling climate change head-on and drawing down emissions from the atmosphere. While this may be a possible strategy to combat global warming, it does not have practical potential for the commercial car wash industry.
As illustrated, extreme weather risks may change a lot over a very small spatial area. Arguably, the most practical way to avoid the possibility of weather-related financial distress is to prepare for it beforehand.
One of the attributes of management viability is management of business operating risks. One way to reduce the impact from potential risks is to develop a plan to manage, eliminate, or limit them as much as possible. For example, a car wash should have an accident prevention program to address the safety and health hazards found in the workplace.
Similarly, car wash operators can benefit by preparing an emergency plan. First and foremost in this plan is the safety of employees and customers. If extreme weather is imminent, there is no need to remain open for business.
For example, if authorities are predicting potential for dangerous flood waters, people need time to prepare and evacuate if necessary.
So do businesses.
Ensuring the integrity of business records and data is crucial. This means backing up hard drives and storing mission critical documents off site.
Likewise, measures are needed to minimize potential damage to physical property such as structure, computers, equipment, and inventory.
Afterwards, power may be out, phone lines down, internet and cell service out, and roads closed. Consequently, the emergency plan should contain a contingency element. For example, for backup electrical power, consider a propane- or gasoline-powered generator.
If phone lines are down and cell service is overloaded, consider a mass text message app to communicate with employees and customers.
The plan should also include contact information for the Federal Emergency Management Agency (FEMA) to apply for relief and assistance after a disaster.
Finally, car wash operators should consult with their insurance provider to ensure the right combination of coverage, cost, and service meets the company’s needs.