Carwash Business Startup Case Study – 50 Years Old With $50,000

Not long ago, I was presented an interesting case study. An individual with wanted to start a fully automatic carwash, had a piece of property, and could come up with potentially $100K but more realistically about $50K in real money. Also, he was ten years from retirement age and thought that this might be a decent business for him to start, and so, the question is; would it be a wise choice? Okay so, let’s begin this dialogue shall we?

Luckily, he already has a piece of property with a small home on it, probably better as a tear-down and start over than a slum-landlord leasing investment. The property is on a busy corner and it is re-zoned for such a business model. The traffic is thus, pretty good, and the city is working on many beautification projects and trying to upgrade their image. Things are growing now again since the 2008 collapse when things were really growing there. It’s a small suburban town, outside one of the Arizona’s largest cities.

The town is somewhat seasonal for retail, due to the snowbird effect, as are large chunks of low land Arizona. Yes, nice in the winter, steady traffic too. Now then, the entrepreneur has a Carwash secondary small business and thus, couldn’t be onsite to manage the carwash, so, is all this really going to work for him? Well, that is also an issue, you see, these all-automatic carwashes are not as great as they seem.

But, a hand-wash carwash or a semi-automatic full-service wash could work in this particular area due to the Hispanic lower income demographic and population there. One nearby carwash is all automatic at the Chevron mini-mart and even though I don’t like those systems myself, it does get customers – and turns out to be a good additional profit center for the gas station mini-mart.

Still if someone is looking for a business which will “run its self” without you being there or taking up time, I’d advise against that particular type of business and system. The allure to have a small unattended company that is busy and just keeps turning out money is wonderful, but an entrepreneur always has to ditch the optimism and enthusiasm long enough to slap himself in face with a good dose of reality. Nothing ever works as nicely as it looks on paper.

In the end after looking at this opportunity I was more or less inclined to advise against it. You see, I wouldn’t recommend doing this, the thought that these automatic systems just make money once they are installed and are nothing more than a cash cow is poppycock. Just as you can’t open a “coin-op laundry” and expect it to just churn out money without an attendant, etc.

Further, there are all sorts of other challenges with unattended all automatic carwashes, such as taggers and graffiti, as well as crime. Lastly, due to the attack on the energy sector and increased regulations there, electricity energy costs could cause the energy costs to triple, and those automatic systems use a lot of energy. If the carwash raised prices fewer customers would come, and the ROI proforma estimates would be torn to hell. Anyway, beware anytime you start a new business. Please consider all this and think on it.

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