Business owners often think of ancillary products and services as optional, a luxury. The truth is they’re necessities! Any item that helps you operate efficiently, economically and profitably is critical to your business, whether you own a self-storage facility, a car wash or both.
Every business has tools to manage revenue and operations, such as cash registers, computers, kiosks, security equipment, software, etc. These are nonnegotiable. But there are elective items that affect profitability, too. In the car-wash business, they include revenue- generators like vacuums, vending machines, signage, detailing services, windshield repair and concessions. There are also environmental systems to consider such as water treatment, reclamation, energy-efficient lighting, insulated doors and heating. They aren’t significant to the wash process, but they’re important nonetheless.
When you embark on the startup of a car-wash business, it’s easy to become so overwhelmed with the intensity of the project that you overlook the “minor players.” Let’s take a look at how and when these ancillary items come into play.
The Planning Stage
Assuming you are building a ground-up project, your first encounter with the issue of ancillaries comes with your initial visit to the city engineer and planning offices. Officials will bombard you with questions, many of which will require an answer before you can obtain approval. Every department plays a role and has an agenda. In the end, some of the things you thought were optional add-ons will be mandatory.
Most local governments are knowledgeable about commercial car washes and the overall impact they have on a community, and they’ll usually expect some sort of quid pro quo. One way a municipality deals with the stress and strain of its budgets is to impose an impact fee, also called a development fee, which is levied on a project developer as compensation for the otherwise unmitigated effects the project will create (i.e., environmental). The fee can be daunting. I’ve recently heard of fees in excess of $250,000 to connect into a city’s water and sanitation system.
After you recover from the initial shock, you think, “There must be a way to minimize this!” Fortunately, there are a number of companies that specialize in water-recycling or reclamation systems. Depending on their complexity and size, commercial systems fall in the range of $25,000 to $60,000. The investment should cut your impact fee by two-thirds, lower your water and sewer costs, allow you to operate in times of drought, and position your business as a “green” neighbor within the community.
Even if you’re purchasing an existing car-wash site, you could face a situation in which water and sewer bills are through the roof or drought conditions prevail. The addition of a water-recycling system could be worthwhile, depending on the site. The benchmark is: If the investment will pay for itself within three to five years, it’s sensible.
There are several good water-treatment systems out there. You can find more information online or through your car-wash supplier. A couple of good websites to visit are www.carcarecentral.com and www.autocareforum.com.
A water-treatment system produced by AquaChem Inc.
Once you’re up and running, you’ll find there are a number of revenue-generators that are not part of the wash process but are integral to the success of your business. Ancillary items will vary, depending on the type of car wash you build.
You can almost always add coin- or credit-activated vacuum cleaners. These simple devices are the unsung heroes of car-wash sites. They always report to work, they pay for themselves in less than a year, and they’re available to customers 24/7.
An Ultra 6-in-1 station by J.E. Adams Industries Ltd.
Other popular ancillaries include vending machines, signage and retail merchandise. These items capitalize on your commercial space to create profit. If your car wash is attended, there are numerous other amenities that will drive business and enhance your customers’ experience, such as food or coffee carts, body and windshield repair, express detailing, gasoline, quick lube, and countless others. The bottom line is ancillary services are great as long as they add income without complicating or compromising margins.
Vending and change machines make for customer convenience.
Frog’s Express Wash offers a complete array of ancillary products and services.
Some Added Twists
Some new twists have been added to the carwash offering. One attracting a lot of attention these days is the express-exterior concept in which the customer drives into the property and uses an automatic teller—using cash or credit— before proceeding to an exterior wash. Generally, these are tunnel washes with a conveyor. The customer is pulled through a series of wash, rinse and drying arches. Once that is completed, he can proceed to a free vacuum area or exit the site.
Express-exterior washes have really benefited from technology. Without the availability of computer cash-management and control systems, they wouldn’t have become as attractive an offering. The addition of new vacuum equipment, secure vending, remote diagnostics, security, and off-site management has also helped launch them to the status of site necessity.
Exterior-express tunnels are the latest twist to the car-wash offering.
I have singled out the express-exterior wash, but the fact is every car wash can benefit from these ancillary developments. Consider in-bay or rollover car washes. There are so many of these facilities in most markets that they need ancillaries to create a competitive edge. For example, one of the things motorists most often wish for is a better way to clean their wheels and rid their bumpers of bugs. Voila! Now there are products that meet these needs, HubScrub and BugBuster. Do they meet our criteria for adding value while improving the bottom line? Yep. So, are they a necessity? You bet!
HubScrub rids wheels of dirt and grime.
For a Better Tomorrow
Every business operator must ask himself, “What can I do better tomorrow than I am doing today?” The ancillary avenue will always offer up ways to improve. But when choosing products and services to add to your site, be deliberate. Each item should meet these general criteria:
- Can the ancillary be depreciated and capitalized?
- Does it add value for customers?
- Does it enable you to manage your business more effectively?
- Will it pay for itself in less than five years?
- Will you gain a competitive advantage by incorporating it into your project?
- Will it help ensure future business?
There is a plethora of items you could add to the list of offerings. In fact, there is still much to learn and explore in the ancillary field. The trick is to dedicate some time to research, choose the right suppliers, ask for help when you need it, and don’t leave ancillaries for last. If a product or service adds value to your business, you definitely need it.
Fred Grauer is the president of Grauer Associates and the vice president of investor services for Mark VII Equipment LLC. He can be reached at email@example.com.