Carwash Ownership 101
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Carwash Ownership 101

A carwash is an attractive investment opportunity. Here are some tips on ensuring the best chances to succeed.

Mike Reijonen is the Sales & Distribution Manager at Mark VII Equipment

There are many factors that make a carwash an attractive investment opportunity. It could be a chance to be your own boss, or perhaps a wash is a natural fit with your existing business or businesses. The interest may stem from the possibility of generating income without the concerns associated with employees. Whatever the reason, there are proven pathways that will greatly increase your chances of success — and reduce your headaches — as a first-time carwash owner.

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Assuming you’re building from the ground up, your first step is determining what type of carwash equipment — automatic rollover, self-serve, conveyorized tunnel — you’re looking for. Keep in mind that when you’re selecting equipment, you’re also choosing a partner that will be one of your most important resources in the process — your equipment supplier and manufacturer.

Look for a partner that will walk you through the entire process to ensure that you have the very best chance to succeed.

That begins with property selection. Are the properties you’re considering suitable for a carwash? What are the demographics of the area? Do those demographics, including the location, support the equipment you’re considering? For example, your preferred site may not have the car count to justify the investment in a tunnel, but it could be a great location for a rollover. Or you may have more tunnels in place (or under construction) in the area than business volume can reasonably support. On the other hand, high traffic volume may provide more business than a rollover can handle, opening you up to competition. If your financing is sufficient, a tunnel may be your best choice in this situation.

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Once all the preliminary details are in order and a contractor is chosen, your carwash partner should assist you during construction to ensure that all underground work meets the requirements of our equipment and your plan. While construction is underway, your carwash menus and signage should be being prepared so that everything is ready once the building is completed and the equipment is installed.

Finally, it’s time for a soft opening to ensure everything is in good working order. Then it’s on to the grand opening. Once you’re fully operational, look to your carwash provider for ongoing chemical and service support.

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The No-Build Alternative

The other option for first-time carwash owners is the purchase of an older, existing wash that is in need of upgrade. In virtually every market, there are owners who, for one reason or another, have chosen not to keep up with the industry. It is often possible to purchase these washes for the cost of the land plus a little additional up-front investment.

Most carwashes will sell for 3-6 times the total annual carwash receipts. The difference between the multipliers is the condition of the wash. If you find an existing wash that you believe could be your industry entry point, your equipment provider can once again provide valuable guidance.

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Just like a new build, you’ll need to take a close look at the demographics of the area. Did the wash lose business because of neglect, or did the community change around it? What does the competition look like? Which equipment can be used in the existing facility, and which is the best option for the anticipated business volume?

In addition to the carwash equipment, most older sites will also need appearance upgrades. All the major retailers regularly update the appearance of their locations to stay fresh and attractive. A carwash is no different. A dated wash will attract competition. Your carwash provide should assist you with the updating process, suggesting changes that will make the biggest difference and putting you in touch with suppliers who can help.

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As you set out on your journey to carwash ownership, it is critical to partner with a distributor and a manufacturer who will walk through the entire process with you and provide sound advice.

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