What's going on?

It's not the weather that's got me down.

What is it? gas prices, income taxes, economy, real estate market, stock market, price of bread/milk, too much election campaigning or "all of the above". Maybe we've gotten to the point now, where every socio-economic level of our society has tightened up like a drum. (and I don't mean 55 gallon drum)

When things are good, I like to give credit to my car wash and business abilities. When thing are bad, I want to blame something/somebody else. I have to monitor that tendancy.

My washes in lower income areas are down and the one in a higher income is slightly ahead or flat. Is that the $3.50+ per gallon at the pump reaction?

My sincere sympathies to all the full serves and self serves trying to make it...hang in there!

Well, it seems as though you are a veteran car washer, so you tell us what it is! Being a few years into this whole industry, I haven't established much of a pattern or norm yet.

I've been a detailer a long time, through good economies and bad. I think everything is cyclical and that no economic slowdown lasts forever. I think there are opportunities within perceived problems. I planned ahead by building as economically as possible for my first wash. My friend Eric was making fun of my place a little at the ICA show. My ego flinched a little at his comments. He meant no harm, but his point was clear: I had economized on my first wash. But heres the benefit of my economizing; I have a manageable debt service. With rising costs and less discretionary income around, that helps me alot!

I don't think it's productive to look for anything to blame, honestly. What is productive is to focus on whatever you can that is good and positive. Find what is working and do that more. Look to what has worked for others and adopt those methods yourself.

I'm just not sure about the effects of the economy on car care businesses. My detail shop, with a much higher price point than a carwash, is the busiest I EVER remember. Maybe that's because the detail clientele are higher-income folks who are less affected by higher consumer costs. So, detailing is my niche to work and work it I must!

Of our 2 washes that have been open a while, our wash in the lower income area has seen a drop in business and ticket average and our wash in the middle income area has been about the same, if not a bit better. I think the gas prices are affecting our wash in the lower income area bot directly and indirectly. Any idea on how to keep up business during times like these when people don't have extra money to spend on car washing?

That confirms my experience Jim. The lower income areas are being affected to a greater extent than the upper income areas. Yesterday, my two best washes, which normally track nearly equal, the one in the much lower income area was 50% below the other in car count.

My recommendation: watch your expenses and ride it out. Don't lower your prices, don't over spend on advertising, try not to raise your prices unless you have to. This economy is a bull we don't have the power to fight. It's like trying to sell ice to an Eskimo or car washes on a rainy day. Don't frustrate yourself by trying to beat it. Now's the time for us to learn how to operate more economically. We'll benefit from that from now on.

When I had washes in lower income areas, it seems they kinda petered out towards the end of the month. My theory was they had spent all of their gubbiment check and was waiting on the next to arrive on the 3rd.

My washes were about even last year. I did'nt spend anymore than I had to.
I cut expenses wherever I could. I focused on giving the customers more attention and just basically the best I could without it costing me much more. I hear about some of these investors who spend $1.5m to $3.0m, but the wash barely makes enough to cover the expenses. Some of these new washes go back up for sale in a few years at these same numbers. The washes are beautiful, bright, etc. It makes me wonder ? Did they do some analysis beforehand or were they just over sold by the equipment guys. These guys will be loosing their ass. People are spending money on gas and groceries - last on their list is a clean car. They are washing it themselves trying to save a few bucks. When times are rough, then only the big boys or better operators weather the storm. I've gone through several of these. The better operators always seem to make it through.

Joe
www.crowncarwashinc.com

Our lower income wash is doing less cars now as well than our higher income area. It is quit depressing to have a beautiful sunny day in April and wash only a portion of the cars you normally would wash.

Greg, we can see how the first half of the month is better as well. I had the same theory as you did about the govt. money.

On top of all this, there is talk of a guy wanting to build an express wash down the road from us. What goes through people's minds??? It alsomst seems like some people don't think much about spending $2 million.

There are some bright sides to econcmic downturns. It's a good time to refinance. I just refinanced my house for 5 1/8%. My commercial lender lowered one of my notes 1 1/2% without re-doing the note. (cause he knew I was changin if he didn't)

I've seen the insurance market get more competitive.

Lower employee turnover.

You can work better deals with contractors, engineers, etc. There for a while they were charging whatever they wanted and they knew they could get away with it.

Our county just cut all impact fees in half to foster development.

I could go on a loooong time about benefits of a slowing economy. But I always try and find the bright spots in situations and perceived problems. Otherwise, I'd stay home all day, weeping softly in my bed, sucking my thumb.

But get this: We are entrepreneurs! We're risk takers, in charge of our own destinies! Nobody tells us what hours to work, prices to charge, etc. We're not cooped up in our bank branch office, looking longingly out the window at the guys out there hustling to get business. We're the hustlers. Movers, guys that get stuff done.

Sieze the opportunities that are disguised within 'problems'. Think outside the box. Better yet, crush the old box and build a new one.

It's good to hear a positive attitude out of the NE. Everything I hear from other Northeasterners is that they are having the worst year ever. We all need to hear a little "Mary Poppins" sometimes..."a spoonful of sugar makes the medicine go down."

There are several keys to surviving this downturn.

1) Keep up appearances. Make sure that you keep your wash tunnel clean and lot pleasantly landscaped. Who want to take their $60k Hummer to a worn out dump of a wash.

2) Differentiate yourself - It will cost maybe 15 cents a car, but a moist, disposable, courtesy towel and an imprinted litter bag may be something they don't get anywhere else.

3) Don't get cheap on your chemicals - stay with what you know works and use the proper amounts. These are critical to your maintaining quality.
- Find out what you're lacking. What areas of vehicles (if any) are only marginally clean. FIX THEM - whether its with equipment, chemicals, or by prepping, ensure that each vehicle that leaves your wash is as clean or cleaner than the customer could have done it himself at home

4)Focus your advertsing and marketing efforts on expanding your customer base. New people are moving into your market area every month. You've got to find a way to grab them when they are getting settled in their new habits and routine.

5)Come up with innovative programs like a monthly pass, 5 wash books (discount here has to be at least $2 of per wash to effectively motivate people to shell out the price of the book), and frequent washer program. Of course this is tough to do if you're charging $3-$5 for a wash. But would be easier for your higher priced packages (which everyone knows costs just pennies a car).

6) Give your customers reasons not pull out the hose and bucket and do it at home.

All very good comments. Just use the old sales saying, "Pain = Opportunity". If you hunker down, jack up your prices, you would be making a big mistake. Keep them where they are at and add that extra touch of customer service.

Chief is right, start differentiating!

Good ideas Bill...I've thought about a towel service for my $10 wash. The attendent hads them a washed towel at drive on and there are dirty towel bins near the exit. It would cost some lost towels every month, labor to wash and fold a hundred towels a day but might improve sales/service. Then if I ever raise my base, I would include that service with all washes.

we give a moist towel that we soak in glass cleaner to every customer. Right now the cost per towel is 8 cents but I am trying a new one that may get as low as 6 cents. Customers are more upset that they didn't get their towel sometimes than the wash quality was poor or we missed a spot.

My free towel dry station is a great, simple idea I borrowed from another very wise operator. It has been one of the best things I've done. The execution is very simple. Yes, I lose a few towels and it costs time and $$ to launder them. But it has built customer loyalty. And yes, people still buy the vendor towels!

I have an EE customer that has an area by his vaccumes where customers get free paper towels window cleaner and bottled water. I think it worked ok for a while, but now he wants to move away from that. Set up some kind of vending. Its hard to make any money when you are giving stuff away everyday.

That's always one of the issues I have with free stuff. You may not hear a lot of positive feedback while you're doing it, but they'll sure as heck complain if you stop.

I really like the free towel station idea, but it would irritate me too much if too many people took advantage of it, like towel walk-offs or people pulling in and using the towels and the sink for free to wash their whole car. Waxman is in an excellent position to provide such a service since he and/or his employees are there all day, but I can only be around for a few hours.

I watched a punk kid walk to the c-store next door, grab a big stack of the paper towels they supply for free and bring them over to the wash to dry his car. What really burned me up about it was that he left them all over the bay floor when he was done.

I started putting out "free towels" at the SS about 2 months ago along with a "free vac from 9A-5P Mon-Fri" that hooks to my central vac at the full service (about 30' from the producer). It's catching on and is getting so popular that a line forms an blocks my RV/tractor tailer bay (which tankfully isn't a big deal yet). The towel are the ones I bring home from the hospital.. so they don't cost me anything and I have a commercial washer/dryer at the tunnel for my body towels/windows anyway so again it adds nothing to my bottom line. But no other wash in the area can touch me! It's not like the other SS can install a central vac producer or washer/dryer or make trips to the laundry to do the towels... or at least wants too. I felt that I needed to do this because a new SS/IBA was being built about 2 mile down the road and an new IBA was going in abourt 1/4 mile up the street. I also started a $3 wash, at least temporary.... it's taking the wind out of the IBA's.

Loook guys, you don't need to get carried away with the free towel idea. I am sure that you self-serve or express customer who want a totally dry car already bring their own towels. And, you'll incurr a huge cost as well.

You don't have to go crazy here. A simple, moist (water) disposable towel for people to wipe their dash, console, et. is all that is needed. You can easily get these from Stoner products and probably other too. They are call scrim-reinforced (this makes them strong) pop-up towels. They come 150 in a box, 6 boxes to a case for $46.00.

Hey, customers do love and use the litter bags. God help me if we run out of those or the towels. When we have, they're disappointed. Towels are easy to get (3-5 days), the litter bags you need to order 3-4 weeks in advance. You'll get better oprices on these if you order larger quantities at a time. The next trick is to get your employees in the habit of handing them out - especially when you're not there watching - unless of course you watching them on your cameras over the web. I Absolutely love the ability to see what's going on when I'm not there, its priceless because it keeps them on their toes. The ability to call them on the phone and say, Hey where's Tony, I don't see him anywhere and his car's gone, has put an end to unauthorized absences.

We have only one "employee" (who is about to get sacked for stealing). She does whatever she can to conceal herself from the cameras, even so far as moving them. She's finally getting canned for giving away or selling (Don't know which) washes in the automatic. It was almost amusing to see her snake along the walls to get at the controller without being seen.

I've let go alot of car wash people over the years for stealing or lying.
It's hard to get someone really good for your business unless you pay them well. A good manager is worth every penny you pay him. Car washes in general are not career opportunities, so the better resumes or better people normally do not apply - and if you hire them, its a job until they can find a better job. I also send in secret shoppers on occassion, and then I post the reports from the shopper. I do this twice a month. If a person is pointed out from the shopper 2 or more times then I issue a written warning. The next warning after this is "fired". I don't give out moist towels, but am seriously considering it.

Joe
www.crowncarwashinc.com