Wouldn’t buying a car wash be so much simpler if the industry were standardized with a code of ethics for all manufacturers and suppliers? The accounting, legal and architectural trades have standards; why shouldn’t the car-wash industry? Is it too much to ask, when you begin to investigate and interview prospective vendors, to know they adhere to a set of principles? A fair and equitable way to judge businesses is required to level the playing field.
I broach this topic for many reasons, not the least of which being that I have been in the shoes of buyer and seller. I have listened to and witnessed things in our industry that I find despicable and irresponsible. The carwash industry should hold its members accountable, without relying on the old fallback of “buyer beware.” Toward this effort, this article offers some tools and thoughts for would-be car-wash buyers.
The Address Period
In any business endeavor, you need a starting point, a way to interview and evaluate potential providers. In the sales arena, we call this the “address period,” a time to get to know the business partner, explain your needs, and understand what each of you brings to the table. Why is this necessary? You need logical and complete answers to your inquiries. You want to make decisions based on fact! Remember, the car wash itself is just the vehicle. In the end, the business is about being profitable.
Enter your address period prepared, with an interview plan and an assessment of the project, including your goals, financial commitment, a description of the facility you envision, and the level of involvement you expect from your vendor. Pre-planning is critical to a successful meeting. Use the SWOT (strengths, weaknesses, opportunities and threats) approach to evaluate your competitors as well as yourself. To assist you in the process, following are 25 sets of questions to ask your car-wash supplier.
Initial Interview1. Tell me about your business. How many years have you been in the industry? Who are your company’s principals? What is their experience in carwashing? Do they own and operate washes? If so, how many and what kind? Why did they make the decision to be (or not be) in the business? How do I benefit from their decision?
2. What other suppliers do you represent and why? How can they offer me a competitive advantage? Who are their key accounts? How long have they been in business? What support do you receive from them that will benefit my business?3. If I choose you as my provider, what tools or assistance will I receive in terms of design, consultation with engineers/ architects, representation to government boards, and meeting with lawyers and other team members? What success have you had in these areas? Would you demonstrate and validate your statements? Is there a cost involved with this service? If so, what is it?
4. How do I do business with you? What are the terms and conditions of sale? Are there deposits, refunds, payments or guarantees? Will you provide financial references? Will you provide vendor and/or primary bank relationships?5. Who are your customers? How do you serve them? What references can you provide?
6. What is the normal timeline for equipment manufacture? What about delivery and installation?7. What are my responsibilities in terms of equipment and installation? What are yours? Do you have a list that clearly delineates both? Will you acknowledge and include this as part of our agreement?
8. What will you do in terms of site review, financial projections and recommendations for which type and method of wash to build? Do you offer various systems? What are the advantages and disadvantages of each, mechanically and financially?9. What do you feel is the best approach to my market and why? Are there sites similar to mine and, if so, have they met stated projections? Do their owners feel they have met expectations? Why or why not?
Create Your Wash
Assuming you get through the address and interview stage and are comfortable with the answers you receive, the next step is to begin creating your car wash: what type, where it will be located, how big, how costly, what kind of return you desire and a timeline.
10. How would you lay out my property and why? What would you project the total cost to be?
11. I have been told that “highest and best use” is the mantra for all real estate investments. Does the facility I am proposing meet that requirement? Will the projected income support the investment?
12. You have suggested a certain approach to my market. How competitive will I be? What threats could affect my business? What opportunities might there be?
13. What is the life expectancy of the proposed equipment? What programs do you have to minimize downtime? Do you provide cost-per-car programs for maintenance and chemicals? What is my commitment? What is yours?
14. Car-washing is a cash business. What systems will enable me to manage and track the variable expenses? What are the costs? What are the benefits?
15. How far from my operation is your service facility? Will you guarantee a set response time? Will you consider a program guaranteeing a specific uptime? If so, tell me how it works.
16. What assistance will you provide in creating my business plan? Is there a cost? Will you meet with my bankers if necessary?
17. What can I expect from you in terms of keeping me informed and competitive in my market?
18. What assistance will you provide in marketing? Is there a cost? Are there any co-op advertising dollars available? How does that work? What advertising and public-relations mediums should I use?
19. What assistance will you provide in terms of training? Is there a cost?
20. Do you have complete service manuals and installation drawings? When can I review them?
21. Do you recommend certain contractors? Will you assist me in making contact?
22. Will you walk through the mechanical requirements of your system with my team?
23. I understand some of the equipment you provide comes from different suppliers. Will it all be guaranteed the same?
24. What ongoing assistance can I expect from you moving forward?
25. Why should I buy from you?
I’m sure there are other questions you could add to this list. The key to the whole process is to receive honest information, and choose a vendor that has both your best interests at heart. Your numbers should be realistic, and you should be comfortable that your financial projections will support the investment you make. Finally, create a program that will create wealth. Car-washing is a relationship business. It is important the chemistry between you and your vendor works.
Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a life-long career of designing, selling, building and operating car washes. He can be reached at email@example.com.