Renting part forecourt for car wash business

Get Real

Hi all, I have recently being considering the possibility of setting up a small business.

It would be a small enough venture initially, essentially employing myself. I believe there is an opportunity in the market in between the regular automatic car wash and the full valet service.

Essentially this would be a personalised service, without the damage of an automatic carwash and less expensive than a valet.

My main target market would be people who get automatic carwashes at the moment.

The objective would be to offer a product that requires no self service, is better than a machine wash, is a pleasant experience, and one that has a relatively low price point compared to both automatic and valet washes.

I am based in Dublin and am particularly curious to hear from forecourt owners. Also from people who could tell me is it possible to rent from the bigger companies?

The business plan would be based on a flat and fair rental fee, a percentage of each sale and also increased footfall for the petrol station shop which would be created by my service.

Thanks for any advice

Bandara

I have some forecourts, I get approached a few times a year by people with this idea, here are some issues from the point of view of a forecourt operator, this might help you in your decision.

1.) Insurance - Do you have it, can i trust you to keep it in place, if someone reverses from a pump into your equipment whos problem is it. If someone falls over your hose and breaks their leg. etc etc

2.) You mention that your target market is people who get auto washes at the moment. Why on earth would I let a person operate on my forecourt (even for a rent) who is going after my existing customers? You don't seem to understand the business, auto wash people just want their car washed, they dont want interaction with anyone and dont want the delay of a handwash, and the stress of thinking they have to tip. The market you should be going for is the boy racer/ car nuts who will happily pay for a decent handwash.

3.) Sorting out the electricity / water and other costs is a massive pain in the arse tbh.

4.) A automatic carwash takes approx 3-4 minutes to complete, then the customer is gone off the forecourt and business can continue. The handwash option takes approx 9-12 minutes and queues can form much easier and block the place up, which is not what I want at all.

5.) Your quality of service reflects on my site, if you do a crap job people tell their friends, 'don't go to that place, the carwash there was brutal' etc.

6.) Are you/your staff going to be there 365 days a year? If not, its no good for me, when a site is open, its open for all services.

7.) You will bring no benefit for footfall for the station, i have up to 10,000 customers a week coming into some sites, even if your successful any uptake instore is essentially pretty much zero.

8.) Big companies will have no interest at all in talking with you. If there is a demand for a becent handwash they'll just install one themselves and employ someone.

9.) You run the risk of being used. I let you setup in a site, let you built it up for the inital crap months of summertime and then replace you with someone myself.

10.) What do you deem to be fair rent? Both flat fee and % of sale? How many carwashes do you think you'll do? How much do you intend to be onsite? What price point are you planning? Give me the answers and I can advise if your figures are realistic.

11.) Do you have experience and the professional standard equipment required? Washing cars correctly isnt easy, if customer asks you to remove tar etc you should know what your doing.

Hope its of some help.

Regards
Bandara.

DubTony

I looked at this idea back in the early 90s and it just wasn't feasible. At the time I really wouldn't have been able to charge any more than a brush wash. I'd say that remains the same today.

I calculated that in order for it to pay, I'd have had to do 50 washes a day at each site (I identified 3 that didn't have washes at the time and had the space). In a ten hour day, (I figured 10 am to 8 pm would be about right) there would have to be one car getting washed all the time (with zero downtime). That kind of volume would have required registration for vat which would have had to be included in the price to remain competitive.

After calculating wages (there was no minimum wage at the time) fuel/power to run machines (in real terms both fuel and electricity were cheaper) the cost of branding and uniforms (well you wouldn't do it without branding, would you ?), and the inevitable extra staff needed to cover holidays etc, it just didn't work. And that was because the volume was impossible to reach.

The busiest garage I was aware of at the time was the Texaco at Spawell. It didn't regularly do 50 washes a day in the brush was. (it might do that now, as it's a hell of a lot busier than it was 20 years ago, but I'd have my doubts). The only really busy time was Saturday morning, and that slowed down around lunch time. I don't think that has changed. In the main, car washes just aren't flat out all day. The problem was that revenue had to be shared and / or rent had to be paid. That share would effectively have been my profit.

Car washes work as an add-on to the services already provided by a forecourt, and they can generate footfall. For the average retailer the cost of buying huge automatic car washes is lumped in with all the other borrowings meaning it doesn't necessarily have to pay for itself. Even the guys operating the wash do other work around the premises.

And while there are standalone car cleaning businesses out there most of those are selling valet and mini valet services. I suggest you take a long hard look at the numbers .

Get Real

Thanks guys for your replies. I appreciate them

A few things there with regard to Banadaras post (which was very helpful)

1. Yes it would be my intention to have insurance. You could trust me to keep it in place as firstly I think it'd be risky not to have any personally, and secondly I'd work with the owner/ have them aware of my cover, renewal etc.

2. I know of several garages that have NO automatic carwash facilities so this wouldn't impact on current trade. Secondly, this would be a sit in car service, similar to an automatic wash that the kind of clientelle you are talking about want.

3. This could be solved by an analysis of the bills on an annual basis, with year 0 (the year prior to setting up) being a base year. The increase in consumption could be paid by the business or some agreement such as this could be formulated (granted its a fair point from you, for which I'm just giving my two cent)

4. The extra 4 minutes would be worth the time for the consumer. The focus would be on Quality, service, cleanliness and value. For many, four mins would be worth the wait. I would also think along the lines of a free tea/ coffee to have in the car. In reality, an extra euro would be included in the price anyway for this which would go towards the shop sales, regardless of whether they took it or not. In relation to blocking up, fair point but i'd have other ideas there.

5. My quality of service would exceed that of any automatic wash. I don't mean that in an over confident way. But most of my business would depend on " jesus there's a lad down there that does this job for x amount" if I did a crap job, people might say don't go to your garage, but if I did a crap job, I wouldn't have a business.

6. The staff would be there 365 days yes. Myself mostly with one or two part time/ full time mix. I have worked long, long days, for many hours. I enjoy working. The part time staff would be for busy weekends/ my one day off a week (if any) etc.

7. In reference to point four, essentially, everyone using my service would be purchasing form your shop.

8. True, I was mostly thinking that for big companies. But on a smaller scale, it takes the hassle out of doing that for individual businesses/ provides a guaranteed rent plus sales.

9. True, I could be used. However I think the initial agreement would be along the lines of " you're business gets this rent with little set up on your part, if things go badly I lose money, if things go well, then its a mutually beneficial agreement, and for as long as it is so, a lease with annual reviews could be established. Should I wish to leave, then fair enough, set it up.

10. yes I would deem flat fee and % of sale to be fair. The flat rent being a guaranteed minimum. I would intend to be onsite 12 hours a day, 7 days a week. Would you know how many cars I could expect from that?

11. I am considering purchasing professional equipment. Thats why I said i'd throw it up here first to see. I have experience cleaning van fleets. Mostly though I believe I have a very good chance of offering something to the consumer that is above the standard for the same price region. I have experience in providing value for money and an experience. This includes various roles.

I have a friend who saw an opportunity to provide an excellent service at below average prices and made a business of it. I think there is still alot of room in the market for providing "extras" at the same price/ close to it and earning decent money. Particularly when it comes to relatively low staffing costs (mainly me) and less of a focus on massive profit per wash, but more of a focus on good money and increased guest flow, leading to profits accumulating with volume.


I appreciate your advice and its probably what I needed but I think I have provided some answers to your points. Perhaps I haven't, but I appreciate your feedback positive or negative.

GetReal

Get Real

Dub Tony,

Thanks for the input.

Good point on the average of 50 washes per day needed. I had thought of this alright.

I was curious about the sales required, costs involved and possible profit, if any, which you included.

Do you mind me asking, what would your projected sales have been? For example, after employing staff, branding, VAT, rent etc, did you come out in the red, or was there a sales goal you had that was a case of "if I don't make x amount on this for me its not feasible to do it" ?

ifah

Get_Real

Have you looked into Mobile Car wash/Valet instead ?

There is a guy who comes into our estate (at least our road) daytime about once a month and from what I've seen he gets about 8 washes on our road (30 houses) alone in a few hours. Average time per wash < 15 mins and he doesn't do any advertising etc - just people request him drop in when he's around.

It seems that this would have a much smaller initial investment up front.

One question I have always wondered about for the Manual Washing places is what they do about waste ? Do they have to license for run off and should it be treated separately to Rain / Surface water (chemicals / detergents added) ?

Get Real

ifah wrote: »

Get_Real

Have you looked into Mobile Car wash/Valet instead ?

There is a guy who comes into our estate (at least our road) daytime about once a month and from what I've seen he gets about 8 washes on our road (30 houses) alone in a few hours. Average time per wash < 15 mins and he doesn't do any advertising etc - just people request him drop in when he's around.

It seems that this would have a much smaller initial investment up front.

One question I have always wondered about for the Manual Washing places is what they do about waste ? Do they have to license for run off and should it be treated separately to Rain / Surface water (chemicals / detergents added) ?

thanks for the input. I was looking at this sort of business too. I guess it would be an interesting route to take.

I'm not dead set on doing anything right now, however I do have a huge drive to do something in the area of running my own business. I know I have alot to consider and research. This is very early stages. I had thought about the mobile business alright. My friend was involved in a small scale gardening business. He started initially by dropping business cards in etc, then doing deals of cheap quotes and a free visit a month or two later, this created loyalty and advertising by word of mouth and he has expanded now.

I do understand the drawbacks- dreams getting in the way of sound judgement, people not appreciating junk mail etc. But it is certainly an option to consider.

Thank you

DubTony

Get Real wrote: »

Do you mind me asking, what would your projected sales have been? For example, after employing staff, branding, VAT, rent etc, did you come out in the red, or was there a sales goal you had that was a case of "if I don't make x amount on this for me its not feasible to do it" ?

Prices were obviously lower than they are now, although not by much. I remember looking at £3 a wash (€3.81). It's not far off 20 years ago and prices have only really doubled in that time. So my figures have little relevance today given that wages are higher in real terms, and fuel and electricity are way more expensive given their increases in just the last 5 or 6 years.

At the time it wasn't a matter of ending up in the red. It was more a case of the venture not really being worthwhile. Staffing was a concern. I've been in retail since the early 80s and dedicated people are tough to find for what are effectively low paid jobs. I saw the wash business being the same, with the added risk of being thrown off a site by a Bandara type character when the car wash was closed for a day because nobody showed up for work.

Basically, I just felt that the profits that would have been there would have been too small for the hassle involved. Add to that the fact that it wasn't really scalable, I decided not to go ahead. Ironically all 3 garages I approached are now closed, and 2 of them have operational car washes. :roll eyes: My understanding is that all 3 were property plays during the boom, but never went ahead.

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highlandseoghan

Just after seeing your post op.

I think you are much better to look into a different business or else you need to do some serious research into this if you go ahead.

The big petrol station companies wont have any time for you, smaller independent garages might be interested in your idea if they dont have an automatic brush wash on site. Here is a problem if they are interested but dont have a brush wash then you have to see if they have the space to hold a q without blocking pumps or any roads etc... then if they have the space you are going to have to get the drains installed ( this is expensive )

Equipment - A decent commercial power washer will set you back minimum €1500 Cloths, chemicals, uniform, chemical bottles etc.. €250 Signage anything from €100+. You will need decent equipment, decent chemicals, a uniform to build a brand and for general apperance and signage to build awerness about your brand.

Storage - Small shed / cabin etc €300+ you will need a decent place to sit / wait during quite periods and a place to store all your equipment. Don't expect the garage to store your equipment because then there is more risk involved for them.

Insurance - Can be any price depending on age, location and dangers €900pa

Without the cost of the drainage / recycling unit your looking at a minimum of €2900.

A good car wash can earn good money but the extras are where the real profits come from. The hoover, the mini valets and the full jobs. If your opening a car wash why stop at just only washing cars go the full distance and offer all the services - Once your location is good.

Car wash only - €8 per car

Wages from 10am till 7pm - €80 per day
Cost of washing car - €1.70
Rent - ????? Lets say €35 per day
% of every car - ?????????? Lets say 0.80c per car

I am being generous here and say that you wash 4 cars an hour thats 36 cars a day

36 cars a day €288

Wages 1 person €80
Cost of wash €62
Rent €35
% wash €29

Total expense €206

Now what happens if 1 day it rains all day and you wash no cars you still pay rent and wages. Now we live in Ireland imagine 2 weeks of rain. Now I said 4 cars an hour and to be honest it is very hard to wash 4 per hour.

Instead of looking at forecourts look at other areas - shopping centres - car parks - hospitals places where people park and leave there cars for periods of time.

TGi666

I have looked into this myself in the past and I will say one commercial power washer is well and good till it goes wrong so that means forking out for 2, The bonus being you would back up for busy periods.
I would try the hand at a mobile service and target middle class areas and price around €15-20 for a 30-40 minute job where you can actually do some work rather than wash the dirt off.
Also for the above you would easily get away with spending €1-€3 per car on chemicals/sprays etc.
Nail in the coffin for me was when I was doing my market research most people i asked in my area want the €6 wash & go once a month, boy racers/taxis would be the bread and butter in this game and product knowledge is key as you could mess up chorme/polished wheels easily using the wrong wheel cleaner.
If there is anything you would like to ask me about sourcing equipment etc drop me a pm

OriginV

A place in my town doing it for €4 per car for a basic wash and they are mad busy because they cut out the competition with the cheaper price. They also do full valets and everything else requested for a great price. So think about pricing wisely.

highlandseoghan

The business could not possibly make any money or pay wages at €4 per car. At €4 per car in a 9 hour day for 1 person with no breaks needs to wash 9 cars an hour to make €81 then take away money for chemicals, water and rent that person would be lucky to make €3.50 per hour. It is also impossible to hand wash 9 cars per hour for 9 hours. Now if there getting valets done at decent prices that will bring in good cash.

Glinda

Chap about five miles from me in North Co. Dublin does this on the garage forecourt for €5.50. Excellent service, six days a week but I'd say it's bloody hard work. He always has a few cars waiting, people seem to prefer to the brush wash presumably because it's better for the paint?

Get Real

highlandseoghan wrote: »

The business could not possibly make any money or pay wages at €4 per car. At €4 per car in a 9 hour day for 1 person with no breaks needs to wash 9 cars an hour to make €81 then take away money for chemicals, water and rent that person would be lucky to make €3.50 per hour. It is also impossible to hand wash 9 cars per hour for 9 hours. Now if there getting valets done at decent prices that will bring in good cash.

sorry, while I understand that 4 euro per car is incredibly low, I'm somewhat confused by your figures. You're right, 9 cars per hour with one person is impossible, but hypothetically-

9 cars an hour @ 4 euro= 36 an hour. 36 x 9= 324 euro a day. where is your 81 euro, and net rate of 3.50 an hour coming from at all?

being realistic (or should i say optimistic) if you did 3 cars an hour on average @ 6 euro, for ten hours= 3x6euro = 18 per hour

18x10 = 180 euro a day- costs (and I don't know what they amount in total to hence I started the tread)

highlandseoghan

Sorry I miscalculated the figures there I was in work and trying to do a few things at once. Even hand washing 3 cars an hour would be very tough for 1 person but the biggest cost you will have will be the rent to pay to use the site. Even doing 3 cars per hour if you get a few days bad weather even 1 Saturday raining your in serious trouble. If you are serious you need to start looking at places at getting ideas on rent. I would be putting rent down at between €190 - €300 per week depending on site location and traffic. Ive over 10 years experience in this area, I am not trying to put you off because it can be a very profitable business but it can ruin people financially if they don't know what there doing. This is why I strongly think you should consider adding valeting to your service to bring in the profits.

mickdw

highlandseoghan wrote: »

Sorry I miscalculated the figures there I was in work and trying to do a few things at once. Even hand washing 3 cars an hour would be very tough for 1 person but the biggest cost you will have will be the rent to pay to use the site. Even doing 3 cars per hour if you get a few days bad weather even 1 Saturday raining your in serious trouble. If you are serious you need to start looking at places at getting ideas on rent. I would be putting rent down at between €190 - €300 per week depending on site location and traffic. Ive over 10 years experience in this area, I am not trying to put you off because it can be a very profitable business but it can ruin people financially if they don't know what there doing. This is why I strongly think you should consider adding valeting to your service to bring in the profits.

Your experience would seem sketchy if you could even write down those bullsh1t figures before without automatically knowing they were way off.

highlandseoghan

How are those figures sketchy?????

If your paying less than that for a decent size area with decent traffic fair play to you but at present not one of my sites is less than €190 per week but there all decent sites with a decent area for valeting. Ye you can get sites for €80 a week and you would be left standing there all week able to count the cars that pass on 2 hands.