car wash in florida

i am looking to construct a new car wash in a superb location close to a popular shopping mall in florida. I have managed a car wash before but in new york. snow was a very good factor in increasing volumes in the winter. My question is how well do car washes do in florida considering it is warm almost year round and especially that it rains a lot?! can people who own florida washes please advice on the capture rate and estimated revenues that a florida car wash, on average, might have? I really appreciate any advice given.

Wow you want to build a car wash. What type? Express Self serve? Not trying to be a Debbie downer but good luck trying too get a loan. I live in Florida but built in North Georgia and it was a bitch getting money. When you are ready to build get proforma from different equipment manufactures and the half that. Its not a great time to be washing cars.

Good luck

thanks for the reply. I am looking to build a superstation with gasoline, auto repair and a full service wash. the location is the best and a popular spot and so is visibilty. I know we will encounter problems with getting money, and i need lots of it. any advice to how you got the money?
i didn't quiet understand when you said "get proforma from different equipment manufactures and the half that" ?
why isn't it a good time to be washing cars?

by the way, how is your wash in georgia doing? how many cars per day on avrage do you wash?

Do you have a car count on the road you plan to build on? Do you have a equipment supplier in mind (car wash part) will it be a inbay or full blown express?.
If you plan on building a express plan on spending around $500G on equipment.

Your equipment supplier will give you a proforma based on traffic count at your location. Take there car count number and half it trust me!.

Have you been reading the posts on this web site? worst weather pattern in decades rain followed by snow followed by more rain.

I'm not sure about the gas or auto repair. Everyone needs gas but not everyone needs a car wash.

My car count is below average and not good.

thanks for your reply newtunnel!

we do have a car count of 45,000 cars and it keeps increasing over the years since it is a newly develped area. we haven't researched suppliers yet. so your basically telling me that the price is based on the traffic count?!
how much did you're car wash cost to build?

again thank you for your response and help and sorry to hear that your wash in not doing that great. Hopefully good weather will be on the way.

You can do well in Florida if you stick with the fundamentals; find an excellent location without a lot of competition; build to the strengths/inefficiencies that exist in the market; build smart (not cheap); and form a good project team early on in the process.

In areas that have been less affected by the recession (e.g. markets within Palm Beach, Miami-Dade, Orlando, etc. where per capita income is double the Florida average), you can find express conveyors washing over 100,000 cars a year with an asking price of ten times EBITDA.

In other areas, you may find carwash markets that are reeling from the loss of 750,000 jobs (state-wide over the last several years); 30% decline in property values; and rising cost of living and cost of doing business. Here, you can have your pick of existing washes some of which are selling for less than replacement value including relatively new self-service, express and full-service to express conversions.

Florida doesn’t benefit from snow with the exception of attracting “snow birds” and tourists. Experience shows snow birds wash more often than the typical Floridian. So in effect, it does snow in Florida. You have to build the business around this fact.

In Florida, what you are proposing to build is probably going to have an enterprise value of about $4.5 to $5.5 million. If so, you may need $1.5 to $2.0 million or more to buy debt.

Newtunnel, nice carwash. Sorry to hear you are not hitting your numbers. I’m also surprised somewhat. Did someone reopen the carwash on the hillside located across the highway from you?

Thanks for the reply Robert. it's really helpful. the location is indeed great with not many competition, but I am not sure how much jacksonville has bveen affected by recession. I have to do some research. Seeing from your profile that you have experience owning a car wash and a repair shop. where was is located? Would you give me some advice in terms of traffic count and capture rate based on your experience? Any advice would be appreciated. Thank you

The cost to build minus land was 1.3 mill. No one wants too touch that wash its in a very bad location and has some very serious problems with the lot. My numbers will pick up when the weather improves.

My carwash and lube in Florida was in St. Petersburg. I have operated carwashes in the Metro Atlanta area and detail shops in southwestern Pa. I also have experience with auto body repair shop, gas/c-store and fast food drive through.

Although there are exceptions, I have found that customer attraction rates for carwash in Florida tend to be lower, on average, as compared to other parts of the country. There are several reasons for this. There are others but these seem to be the more important ones.

1) Certain markets have a high proportion of absentee owners
2) It is relatively “clean” here. This means no snow/salt, very little dust, no smokestack industry except power plants, there is no mud unless you live out in the sticks (we have sand), etc. It is often easy to go for weeks at a time here without washing your car.
3) Florida does have carwash hot spots but many markets have low per capita income. It has been my experience that low per capita does not usually correspond with robust capture rates.

If you are doubting Thomas, I don’t make this stuff up. My database and understanding of capture rate comes from years of analyzing industry benchmarks, reviewing property appraisals, preparing opinion of value, preparing and reviewing and location assessments, feasibility studies and business evaluations, traffic count studies, etc.

As prospective investor, you may be interested in my carwash “boot camp” that provides an overview of the fundamentals of investing in the carwash industry.

You can download the PDF for “FREE” by visiting my website at:

http://www.carwashplan.com/carwash_boot_camp

Have you already been financed? I hear if the wash has a conveyor you can’t get money in Florida. Maybe things are starting to turn around. You should talk to Kevin or Scott Colette with ICS Istobal USA in West Palm Beach 888-927-4631. Their express on rails model is pretty cool.

I can say without equivocation that banks are not lending money...period. There may be one or two out there, but you'll have to look hard, very hard. First, take you proforma, put it in a nice folder, wrap it with a bow, and then throw it in the garbage. Proformas are worthless to banks. The only thing that they want to see are tax returns from existing operations. This means that a new operator has a 0% chance of getting financing because they don't have supporting tax returns. Take a look at all the unfinished construction projects in your area. Banks are scared to death of new construction. That's why they want to see tax returns. Can the cash flow from your existing business(es) support the debt service on a new business with zero cash flow? If not, then your wasting your time even looking for a loan. Six months ago we barely knew what the DSCR (Debt Service Coverage Ratio) was. We're by no means experts, but we can perform a reasoned analysis on the subject now.

The banks don't want to take over foreclosed properties. They want the owner to have the financial strength to pay the debt service if the new project fails. You'll need a DSCR of at least 1.35 with zero income from the new project. Now you can see why proformas are worthless to banks.

All those new operators who entered the business a few years ago with grandiose plans (and are now struggling) are now a drag on those of us who are looking to expand. Every car wash that fails and every car wash in financial straits is a black mark against all car washes.

The government, through the SBA can only do so much. Don't count on economic recovery in this country until the banks begin to loosen up the purse strings a little bit. Doesn't look like that is going to happen any time soon.

Good post Andrew. The loan environment has certainly changed. Personally, I am thankful. It should help put the brakes on the insane building going on locally.

Have you tried anywhere outside of local channels such as the Alan Bussey at carwashloans.com? I believe he is a SBA packager. I have seen some posts that indicate there is some money out there available if you turn over enough rocks.

thank you all for your reply to my post. I do appreciate it. Thank you Robert for your car wash "boot camp" I found it to be helpful. I do realize that banks are not giving out loans. I know that from experience. Even though I'm part of a big company that's been in the super station industy for years and have excellent records, we were still rejected recently for another project. Since banks are not financing nowadays, we are turning to private investors. Any ideas of finding investors would be helpful. Thanks.