Car Wash for Sale – How to Assess Its Value
Although car wash is definitely one lucrative business to consider because It can provide any entrepreneur with a stable source of income for years to come but how can you be sure that you are getting the right car wash for sale?
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 for sale?
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?
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.
Should you need more details about owning a car wash or getting a car wash franchise, please feel free to visit us at DetailXperts. We have a lot of information that may help you start a car wash business or improve an existing one.
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