"Car wash for sale" refers to an existing car wash business that the current owner has decided to sell. These listings can be found through various channels like online business marketplaces, real estate agents, or business brokers who specialize in buying and selling businesses. There are several reasons an owner might put a car wash for sale, including retirement, a desire to move to a different industry, or a need for capital for other ventures.
With an estimated $140,000 in revenues from an average number of 19,947 vehicles washed annually (statisticbrain.com), a car wash is definitely one lucrative business to consider. It can provide any entrepreneur with a stable source of income for years to come. But with a long list of possibilities, how can you be sure that you are getting the right car wash forsale?
Types of Car Washes for Sale:
- Self-Serve Car Wash: This is a coin-operated, facility where a driver will clean their own vehicle using a wand-style pressure waterhose, or brush. Like an in-bay automatic, a self-serve also does not typically require onsite employees or supervision.
- In-bay Automatic Car Wash:This is the type that you might see attached to a gas station, and does not have a conveyor. The driver will drive the vehicle to a designated position inside the tunnel, stop the vehicle, and the cleaning system will wash over the stationary vehicle. When the equipment stops, the driver drives out the tunnel. This is all automated so no supervision is usually required, except for periodic supplies, cash collection, maintenance, and repairs.
- Full Service Car Wash:This offers the most services. The driver usually hands off the key to a staff member and they will typically go and wait in a reception area. The staff then take the vehicle through the tunnel and perform full detail and vacuum services. +/- 30 Mins – 1 Hr. A full service must, therefore, be heavily staffed = labor, and managed = more oversight required.
- Flex Service Car Wash: A flex model is a mix of both a full service and express. It operates like an Express Exterior but offers detail services. So after the driver exits the tunnel, they can either drive to the free vacuums to vacuum the interior themselves or to a detail area for staff to provide additional detail services. This model will obviously have more staff than an express exterior model.
- Express Exterior Car Wash: Express needs much less staff, and offers fewer services. In this model, the driver will drive their own vehicle through the automated tunnel. They will drive up to an automated pay station to select and pay for the wash. In some cases, there may be a salesperson at the pay station to assist and upsell the driver.The driver drives their own vehicle into the tunnel and is usually guided onto the conveyor rail by a staff attendant. Once through the tunnel, there may be another couple of staff members to towel dry the missed spots. Drivers can then drive to the free vacuums to vacuum the interior themselves.
How much is that car wash for sale really worth?
Investing in a car wash is not as easy as it seems, especially if you are considering buying a previously owned one. Just like any major investment, it is essential that you think about all aspects when assessing the value of a car wash for sale. It is recommended that you take the following into careful consideration:
The car wash
Take an in-depth look at all aspects of a car wash for sale. How many bays does it have? More importantly, what are their sizes? 16′ wide x 28′ long is a good size for car bays while truck bays should be 17-18′ wide and 28′ long. These sizes will give ample space for your car wash staff and customers to move around the vehicle. Does it have a floor heating system? This will ensure the efficiency of your staff and customer satisfaction during cold seasons. Does it have value-added amenities like a vending machine, laundry shop or children’s center? These add-ons can not only increase customer satisfaction – these can be valuable sources of income during the lean season. Are all the necessary tools and equipment intact? Does it have a water softening facility if it is a traditional car wash that uses a lot of water? How about the lights? Are they functioning well?
The location
Take a tour of the community the car wash for sale is located in. Is it conveniently located? The ideal location can be accessed from both directions with a traffic speed of not more than 40 mph. How about the neighbors? This is also important to note since a car wash generally operates within a 3 mile radius. Do they patronize it due to its good reputation or is it known for its lousy customer service? Being aware of these things can also help you in your assessment.
The changes you have to make
Remember that you are buying a used car wash which means that the buildings, facilities and equipment may or may not last as long as their brand new counterparts. This is why you also have to think about the changes or replacements you have to make over time. According to the Car Wash Appraisal Book by Patrick Crowe, the total costs for such replacements can cost up to $200,000. Crowe also suggests checking the cost of car wash equipment and building costs from local suppliers and contractors.
The financial aspect
This is probably the most telling aspect of a car wash for sale. Ask for their financial records for the past three years. Do they operate on borrowed money? Think twice if they do because you might end up paying their dues. Do they own the land or are they just renting? If they own the land, then you might be at an advantage, especially if it is located in an area that has the potentials to improve over time. The car wash may depreciate but not the land which may appreciate from five to ten times of its current value. Do they spend a lot for maintenance? This translates to faulty or old equipment which might even cost you a lot than what you bargained for. How much was their gross income over the past three years? Asking these questions will give you a clearer view of its profitability.
Taking a closer look at the car wash itself, its location, the changes you have to make and the financial aspect of a car wash for sale can help you assess its value and may even give you a good start in the industry.
Why are so many car washes for sale?
There can be several reasons why there might be many car washes listed for sale at a given time. These reasons can vary depending on the local market and economic conditions. Some possible explanations include:bu
- Business Ownership Changes: Just like any other type of business, car washes can change ownership for various reasons. Owners might decide to sell due to personal reasons, retirement, financial challenges, or a desire to invest in other ventures.
- Market Competition: In some areas, the saturation of car wash businesses can lead to increased competition, which can make it challenging for some owners to maintain profitability. As a result, they may decide to sell their car washes.
- Economic Factors: Economic downturns or changes in local economic conditions can affect the profitability of car wash businesses. When economic conditions are unfavorable, owners may choose to sell their businesses.
- Upkeep and Maintenance: Car washes require ongoing maintenance and upgrades to remain competitive and meet environmental regulations. Some owners may not want to invest in these expenses and decide to sell instead.
- Personal Motivations: Owners' personal motivations and circumstances can influence their decisions to sell a business. This can include changes in family situations, health issues, or other personal factors.
- Real Estate Opportunities: The land on which a car wash is located can have significant value, especially in areas with real estate development potential. In such cases, property developers may buy existing car washes to repurpose the land for other projects.
- Business Trends: Changes in consumer preferences, such as a shift toward waterless car wash services or automated car wash facilities, can impact the demand for traditional car wash businesses.
- Regulatory Challenges: Regulatory changes related to environmental and water usage regulations can affect the operation and profitability of car washes. Some owners may choose to sell if they find it challenging to comply with new regulations.
- Industry Consolidation: In some regions, larger car wash chains or companies may acquire smaller, independent car washes as part of their expansion or consolidation strategies.
It's important to conduct thorough due diligence when considering the purchase of a car wash business to ensure that you understand the specific reasons behind the sale, the financial health of the business, and whether it aligns with your investment goals and capabilities. Additionally, consulting with a business broker or advisor with expertise in the car wash industry can provide valuable insights into local market conditions and trends.
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