Self-service car wash owners/operators are continually looking for ways to provide increased value for their customers. The addition of services or offerings at the car wash accomplishes this while also generating new income streams. With these new investments come inherent challenges, such as up front capital investment, installation time, and the payback time of the investment. Answers to these challenges come by studying customer preferences, local demographics, traffic patterns, and competition.
Developing an understanding of the needs and wants of the wash’s customer base and determining what the local demographic can support are recommended starting points. This will help drive the decision to make a smaller or larger investment. While none of this is easy, the more homework done the better. Doing the homework will reveal which opportunity has the best financial outcome. Let’s take some time to look at investment opportunities starting with basic lower-cost ideas and working up to higher-end investments.
CREDIT CARD ACCEPTANCE
Existing self-service owners/operators can start by considering what payment options are offered in the bay. Does the meter box offer the ability to pay with credit cards? There have been several advancements over the past five years that have improved the performance of credit card acceptance in the bay. With the advent of wireless credit card systems, installation costs have also been dramatically reduced. The need to pull communication wire to each bay, or piece of equipment, has been eliminated.
The difference in cost between one credit card system and the next is mostly based on the availability of marketing/reporting features. One system may allow for fleet cards, value cards, and cross-promotional activities, where a more basic system might lack these options. For example, there are systems on the market that could be retrofitted to a four-bay, self-serve system for approximately $1,825 plus the cost of installation. Higher-end credit card systems that have the ability to offer fleet cards, value cards, and extended marketing capabilities can cost $10,000 for a four-bay car wash. If credit cards are already accepted in the bays, don’t neglect to look into retrofitting acceptance to existing vacuums, vendors, or other ancillary items at the site.
If the self-serve wash is located in an area with strong competition or several competitors within a short drive, then considering ways to gain loyalty or repeat business is a must. The addition of a value-card dispenser or setting up a value program can be very cost effective. This can go hand in hand with an existing credit card system or as a part of a new investment. The value cards can be dispensed from a vendor, sold by an attendant, or dispensed through an automated machine. This type of feature can range in cost from less than a $1 per card, if they are handed out manually, to $10,000 for an automated dispensing machine with the ability to recharge the cards.
Staying with customer loyalty and repeat business, consider installing free vacuum token dispensers in the self-service bays. The concept is very simple: activate the self-service meter box by purchasing a wash and the customer gets dispensed a token to use at any of the vacuums. This concept will keep customers at the wash site and promote further sales. In most cases, the customer will spend more money at the vacuums to finish the job and/or buy additional vending items to detail their vehicle. This same dispenser can be added to auto cashiers for use with an in-bay automatic or tunnel application. The approximate cost per bay for the equipment is $1,700.
Self-service owners/operators know they are in the business of selling time. Keeping the customer in the bay, and with the timer running, is imperative. The following are functions that can be added to the meter box to support this idea. Tire shine applicators located in self-service bays offer convenience and ease of use to customers by using a spray gun or spray wand with attached brush. A four-bay unit costs around $7,500 excluding installation. In-bay dryers are very popular and customers use them for many different applications, from drying the vehicles to drying floor mats. They are very effective tools that motorcycle enthusiasts love, for they make the job of drying a motorcycle easy. Unit price ranges from $1,400 to $1,600 per bay. Premium chemical sealants or carnauba-infused waxes have driven extra revenue within the in-bay automatic and tunnel markets, being sold/marketed as extra-service items. These same chemicals can be applied through the self-service gun by adding a low-pressure application unit. These units are very easy to install and the cost for a four-bay unit hovers around $1,200 to $1,500.
A typical self-service car wash has several single column vendors selling basic items such as towels, vinyl dressing, window wipes, and air fresheners. Evaluate upgrading existing vending machines to offer a larger selection of items to meet the consumer’s car care needs. There are several types of multi-selection vendors on the market, including freestanding, wall-mount, and through-wall options. Wall-mount options sell for as little as $375, while freestanding refrigerated models go for roughly $4,500. When looking to purchase a new vendor make sure to ask the supplier for deals including the unit coming pre-stocked with merchandise. This helps reduce the payback time for the unit.
If the goal is a more dramatic improvement, something that will generate thousands more per month in revenue, the initial capital investment jumps up as dramatically. These projects may include converting a bay into a pet wash, an in-bay automatic, or a mini express tunnel. Approaching a project of this size and nature requires that a significant amount of research be done. Of the three investments, converting a bay into a pet wash will be the least expensive. In general, costs will run $16,000 in equipment for two units and an estimated $20,000 in construction cost to enclose or modify the bay to fit the equipment. Counting startup costs, marketing, signage, and local advertising, the project could total $40,000. In a good location demographically with little competition, the payback on such a project could be as little as two to three years.
Installing a mini-tunnel or in-bay automatic in a self-service bay will no doubt increase revenue. Once again, if the demographics and competitive market can support the investment, the site’s revenue will increase in dramatic fashion. Unlike the addition of a pet wash or other items previously mentioned, adding equipment of this nature requires a good hard look at the site’s utilities, layout, and building size. Evaluations must be completed to determine if the investment is going to require upgraded utilities, building additions, and/or alterations to the site layout to accommodate traffic patterns. While the initial equipment cost is significantly higher than any other upgrades discussed, there could, in addition, be substantial ancillary costs to support said equipment. With such weighty costs involved, it’s advisable to contact the local equipment installer or sales representative. They should be able to provide accurate data to either support or refute such an investment. Most representatives are trained to complete demographics analysis and site reviews. This information will be put into a “Pro Forma” document to determine if the investment is worth the while.
After taking the time to review all the above opportunities, the decision must be made as to which idea will support the existing business model while driving increased revenue; which opportunity best fits the community’s needs and wants; and which opportunity will secure a competitive advantage and keep loyal customers returning for valued services. As a business owner, challenging yourself during good times — and even more so during tough times — is imperative. The definition of insanity is doing the same thing over and over, expecting a different result. If you want to see increased performance or sustainability in the local market, change is vital. Relying on past or current practices and neglecting to investigate improvement is a recipe for lost revenue. As an owner/operator, take the time to evaluate the existing business model and the opportunities to upgrade, and then move forward. This will secure revenue streams and your business place in the market for years to come.
Trent Walter is general manager of Ashland, OH-based National Pride Equipment Inc. You can visit the company on the web at www.nationalpridecarwash.com.