IBA Cost effective?

I am new to the industry but am unsure of the return on investment of a IBA. Obviously there are toucheless etc... but how many washes would you expect from a IBA on a road with 40k cars a day passing? What do they average at a typical location? I appreciate anyone sharing their experience with me, thank you in advance.

Scott

There is more to the equation than just traffic count. One major factor that people seem to overlook is the speed of the cars. Competition is also a major factor. If some one takes a look at a car count and tells you how much business to expect I would run for the hills.

I worked at a standalone 2 bay IBA (2001-2006) with a 35-40k car count. Business was good, then about 3-4 years ago an express went in down the street, also an 8b self serve with an IBA within a half a mile. Business started to decline, the owner shut the wash down at the start of this year. Ironically there is a similar stand alone 2 bay IBA within 10 miles with about a 60k traffic count that does even less business, but is still open.

Moral of the story, don’t put to much stock in a traffic count.

ROI depends on circumstance.

The ROI for an in-bay located at a gasoline site is generally higher as compared to a self-service carwash (wands plus in-bay). Cost of capital is lower as are operating expenses. 70% gross margin. Labor is indirect.

Wands with an in-bay, figure 60% gross net or less.

Capture rate for in-bay automatic is generally quite low, 0.004. On average, 15,000 vehicles pass an in-bay daily. 0.4% of this would be 21,900 car washes a year.

0.4% of 40,000 vehicles would be 58,400 car washes a year.

A single in-bay at a self-service site normally washes about 12,000 to 15,000 vehicles a year. If the average number of vehicles passing a site is 15,000, this would be a capture rate of 0.002192 to 0.00274.

As you see, there is the potential to go astray if you depend solely on using capture rate to characterize income and returns.

If you want to learn more, there is a free carwash boot camp (PDF download) on my website.

http://carwashplan.com/carwash_boot_camp

Build it and they will come. (starbucks) You have to decide if you can beat a three dollar express wash, with a IBA. I'd say no, but a used auto is cheap.

As already stated, there are many factors.

One of the most important is the nature of the traffic, whether it is commuter or local. If these people are shopping and living in the immediate vicinity that is good.

region of country? Do you encounter regular snow in your area?

Is this a market where an express would be considered by another investor? if so, you are bringing a knife to what will ultimately be a gunfight when they show up.

There are a few high volume IBA auto locations out there that do quite nicely. But they are the exception to the rule. And salesmen are trying to feed their family in some very tough times, so be careful.

Consider laying the site out where you can convert to a tunnel in the future if demand exceeds expectations.

we have a 110ft attended tunnel with our IBA. And I truly think our tunnel has built up the volume for the IbA. We were able to market to our pre existing customers, which was hugh for they know they can come 24 hours a day for a wash now (with free vacuum), so were are able to pick up before and after hour customers, line is to long for the tunnel they always dump into the IBA instead of leaving I would never had done a IBA standalone I think maybe because I like to be there all the time so I would be worried all the time when i wasnt, nite time even makes me worried. our IBA current volume is 40,000 cars per year and our tunnel is around 100,000. I truly believe that the tunnel has alot to do with 40,000. getting them on the lot for a wash is the biggest issue.