A commercial car wash is a business operation that relies on a significant amount of capital equipment. Today, equipment may represent up to 25 percent or more of the total start-up expense for a new conveyor project.
Car wash equipment must produce a clean, dry, and shiny car regardless of the environmental conditions or level of demand. The wash bay is also a harsh environment that requires durable equipment and routine maintenance so the expected useful life of the equipment can be realized.
Consequently, selecting an equipment supplier is an important decision for start-ups and for continued business success.
We can define supplier as an equipment manufacturer with a network of authorized dealers that facilitate sales, installation, service, and technical support.
Here, sales are most linked with a thorough evaluation of property and its car washing potential.
Installation encompasses pre-construction meetings, site checks during building construction, delivery and erection of the equipment, and on-site training. Service refers to the level of assistance an operator may need until they come up to speed.
For example, most manufacturers have their own technical support at no cost during normal business hours, but dealers charge for on-site service calls. Consequently, principals can develop a set of criteria to evaluate a supplier’s ability to accommodate their needs.
For example, how does the business proforma measure up against those prepared by other suppliers? How much is installation and what is covered? Does the supplier have a history of completing projects on time and on budget? How long will it take to get a tech on site if the wash goes down and how much will it cost to get it operational? And so forth.
Such criteria are crucial for start-ups to consider because they often lack the ownership and management experience to handle everything from the get go.
Start-ups also need to consider industry structure when reviewing a supplier. Quite frankly, all suppliers of car wash equipment are not equal.
Today, the conveyor segment is similar to an oligopoly where market share is dominated by a small number of large firms. Whereas the in-bay automatic market structure is defined by a large number of smaller firms.
Arguably, a difference maker has been vertical integration that has created the opportunity for certain companies to offer one-stop solutions. Integration allows a company to streamline its operations by taking direct ownership of various stages of its production process rather than relying on external suppliers.
Experience has shown firms that do so are more in control of their supply chain, are able to offer lower prices, and have increased market control. Also, due to consolidation and manufacturers selling direct, it is not uncommon to find dealers authorized to sell and service multiple brands.
Another aspect of selecting a supplier is the customer relationship. Will your team be treated like a big fish in a small bowl or a small fish in a big bowl?
For example, how promptly do representatives respond to questions? Does it take hours, same day, or several days? Are the answers specific, vague, or “I’ll have to circle back on that”?
In the final analysis, no one can afford to make bad equipment. Consequently, selecting a supplier you are most comfortable with is as important as the equipment itself. Moreover, manufacturers and dealers do have their limits. For example, unlike a franchise, suppliers do not provide business advisory support or an entire system for operating the business.
Suppliers will make no guarantees, representations, or warranties as to the accuracy of specific projections or predictive financial statements. Nevertheless, the supplier’s value proposition is undeniable. Second only to location, selecting an equipment supplier is the most important decision for a start-up to make.
Bob Roman is a car wash consultant. You can reach Bob via e-mail at bob@carwashplan.com or by visiting www.carwashplan.com.