ADVANTAGE Publication of the Southwest Car Wash Association
Second Quarter 2014
SCWA 2014 Wade Welch Golf Classic Highlights
SCWA Car Wash Tour – Denver Join Us August 19 Register at www.swcarwash.org ON THE ROAD AGAIN
Advantage
Mobile Commerce Connection “Mobile marketing... too large to ignore.” – Steve Olenski, senior content strategist in Forbes.com
from DRB Systems, Inc.
®
• A user-friendly tool that makes it simple to create your own barcodes for use in mobile and email marketing coupons. • Beyond the SmartCodes module, no extra software or specialized expertise is needed. • Barcodes on cell phones are read easily by the SiteWatch® Xpress Pay Terminal® (XPT®) optical scanner. • All mobile barcodes are entered directly into your SiteWatch POS System for tight control.
SmartCodes from DRB Systems helps you reach today’s consumers the way they shop – on their smartphones! Use SmartCodes to create barcodes for discount coupons or prepaid washes sent to customers by text messaging or through email.*
Contact DRB Systems at 1-800-336-6338, or visit www.drbsystems.com for more information. * SmartCodes is a tool for creating barcodes only. It does not create or distribute
text messages or promotional emails. These services must be performed by the car wash itself or by an outside agency retained by the car wash.
USING TECHNOLOGY TO ENHANCE YOUR CUSTOMER’S EXPERIENCE
800-336-6338 Green, Ohio / www.drbsystems.com © Copyright 2014. All rights reserved DRB Systems, Inc.
2
Advantage
President’s Message Welcome to the second quarter edition of the SCWA ADVANTAGE. I am really excited that SCWA continues to grow and realize new successes. During the recent SCWA Board Leadership Retreat, we reviewed the progress of SCWA over the last few years and were very pleased to see the conClayton Clark sistent growth. The 2014 SCWA SCWA President Convention & Car Wash EXPO was the largest ever attended with about 1400 attendees. The EXPO hosted the largest number of exhibitor booths with 250 booths; the Regional Car Wash Tours this past year have been the largest ever for SCWA. The 2014 SCWA Wade Welch Memorial Golf Classic welcomed the largest participation to date with 24 teams and 96 golfers. Be sure to check out the Golf Classic pictures in this edition. Your Board of Directors is currently working on a Best Practices Criteria for the Industry, creating a new Self Service Task Force and introducing new and fresh ideas for the upcoming 2015 Convention. Plus check out the new SCWA website. It has been a good year! We appreciate the support for SCWA and for the SCWA events from all our members.
I would like to welcome the members of the Rocky Mountain Association to SCWA, we are very excited to have you teaming up and joining the SCWA family. The future of SCWA, I believe, is keeping our focus on the car wash member and creating an atmosphere where car wash owners can network, learn, grow and ultimately be more successful together. Our SCWA network includes are the most successful car wash owners and suppliers in the Southwest. Author and speaker Jim Rohn gives an excellent insight related to the power of a strong network - “What you are becoming is what you attract”. These are powerful words for an association like SCWA as well as car wash business owners. So be sure of what you are becoming and what you want to become, that is what you will attract. The key question always being asked - “How does someone become successful”? The wise teachers will say. “Successful people attract other successful people”. Follow successful people, find what books they are reading, what seminars they are attending and what audios they are listening to and how they operate their business. This is the core concept for the SCWA network. If you have not been taking advantage of the SCWA resources – now is the time to start.
I would like to welcome the members of the Rocky Mountain Association to SCWA, we are very excited to have you teaming up and joining the SCWA family. Our Denver Car Wash Tour will be a celebration to officially kick-off the larger SCWA family. Mark your calendars now for the Denver Car Wash Tour, August 19. We will visit many of the most successful car wash operations in the Denver area. Visit our website www.swcarwash.org to register. Take advantage of the SCWA network - Also join us for the San Antonio Car Wash Tour in October and of course the 2015 SCWA Convention & Car Wash EXPO in February 2015. Ask about the SCWA Mentor Council; the SCWA Water Conservation Alliance and the SCWA Car Wash Academy. If you take advantage of the SCWA car wash network, including the resources and information you need then everyone wins. See you in Denver.
Industry Briefs Mister Car Wash, the nation’s largest car wash company, plans to relocate its headquarters to the revitalized downtown area of Tucson. The company’s decision to move from its previous Tucson location in the La Paloma Corporate Center was made in an effort to continue to attract top talent through a workspace that speaks of energy, culture, collaboration, and ideas. The modern, state-of-the-art office space reflects Mister Car Wash management’s commitment to investing in the future growth and development of the company and its employees, as well as the cultural and economic growth of the city of Tucson. Originally a school built in the 1950s, the three-story, double-brick structure has been completely remodeled and houses more than 25,000 square feet of Art Deco-inspired and contemporary open office space, all designed to promote a collaborative and progressive working environment. The building features breakout rooms, a training space, a workout area with showers, and a sizable lounge that spills out to a shaded, landscaped entry courtyard.“We have known for a while that Tucson’s recent growth has created an environment where people want to work and live, and will allow Mister Car Wash to continue to attract top talent to grow our team, while retaining our current team of experienced industry experts,” said Mister Car Wash CEO, John Lai. Andrew Vaughan (Andy) Balash of Detroit, Based Vaughan Industries passed away May 10, 2014 at age 47. The cause of death is unknown at this time. Remembering him, friends and business associates recall his passion for creating car wash equipment, recognizing him as an innovator and a consummate professional. Vaughan Industries, a privately 3
Advantage
4
Advantage Inventory must be washed. Cars from the body shop need to be cleaned. Some dealers wash their servicecustomers’ vehicles, and others will provide free car washing for life. Experience working with car dealers suggests the average store washes about 37,000 vehicles annually (27,000 customers, 8,000 lot washes). Applied against 17,540 dealerships, this would equal 649 million car washes annually. At smaller stores, lot washing is usually done by porters and occurs at week’s end so vehicles look good for the weekend. At larger stores, dealers usually subcontract this work to firms in the mobile high-pressure cleaning business. A mobile contractor is an alternative for dealers because of cost. When labor and supplies are accounted for, in-house maintenance averages about $6 per vehicle whereas contract price is $0.75 to $2 a vehicle. The average is $1 to $1.25 per vehicle. Car washing at dealerships runs the gamut from simple hand washing to “drive-through” wash rack, to in-bay automatic, to freestanding retail facility.
held family business, has evolved from a detergent and wax distributor in the mid-70s to an equipment manufacturer today able to provide a turnkey 200-foot wash tunnel. Andy Balash is survived by his parents, Lawrence and Nancy Balash; his sister, Katherine; his partner, Donna Farmer; his former spouse, Leslie Balash; and his children, Sara and Matthew. WashIdeas.com, a podcast and blog about the car wash industry, customer loyalty, and marketing was created several years ago by Ryan Carlson who has announced the transfer of the site to Perry Powell, well known consultant to the car wash industry, particularly in the field of signage. Perry Powell has now launched an entirely new WashIdeas website reflecting his vision and expertise within the wash industry. Those interested are able to visit the current site www.washideas.com and sign up for upcoming announcements. One man was hospitalized recently after he was found at a Marshall, Texas car wash suffering from a gunshot wound. Officials have yet to confirm if there are any suspects, but said the victim was shot in the back at the car wash operation near Walmart. He was taken to Good Shepherd Medical Center in stable condition. His wounds were not life threatening. Officials are not sure if the victim was shot at the scene or somewhere else. The car wash industry is literally fed by vehicle sales from new- and used-car dealerships according to car wash industry consultant Robert Roman. New-car dealers sell an average of 726 vehicles a year at an average selling price of $30,659. The desired level of inventory is a 60-day supply so a dealer has 120 new vehicles on the lot plus a selection of pre-owned units. Dealers write an average of 50 repair orders a day or 14,140 annually. The average customer repair ticket is $241. To service these cars, dealers have an average of 19 service bays and 15 technicians. Average labor rate is $95 an hour. Dealership employees earn an average of $925 a week. New-car dealers are open an average of 56 hours a week, and 46 percent have weekend hours. Dealers have an average gross profit of 46 percent and net profit of 7.1 percent. Dealers spend 1 percent of gross sales on marketing or an average of $600 per car. In 2001, 53 percent of marketing was spent on newspaper ads, 20 percent on Internet and TV. Since then, newspaper ads declined to 21 percent and Internet and TV spending increased to 45 percent. Dealers have a variety of car-care appearance requirements. This includes pre-delivery inspection of new vehicles, reconditioning of pre-owned cars, and maintaining the appearance of showroom vehicles.
Messe Frankfurt, producer of Automechanika, the international brand of automotive trade shows, and Advanstar Communications, one of the largest tradeshow organizers in the United States, will join forces to launch Automechanika Chicago. The show will be the 14th Automechanika event around the globe and will take place April 24-26, 2015 at McCormick Place,
SWS FSB Ad - JP.PDF
1
9/3/13
1:44 PM
C
M
Y
CM
MY
CY
CMY
K
john.park@swst.com
5
SCWA CAR WASH TOUR & ROUND TABLE Denver, Colorado • August 19, 2014
REGISTER TODAY! www.swcarwash.org Denver Sheraton West Hotel 360 Union Blvd. • Denver, Colorado 1-303-987-2000 For more information on the SCWA Car Wash Tour & Round Table Discussion or to register please visit www.swcarwash.org or call the SCWA Headquarters at 800-440-0644. ON THE ROAD AGAIN
Advantage which will serve as the show’s home on a biannual basis. Automechanika Chicago will showcase the newest tools, equipment and products in the market and will be the largest U.S. tradeshow dedicated to high-end technical training and management classes for automotive technicians and shop owners. Michael Johannes, brand manager of Automechanika, said the show’s shop-friendly environment “will allow visitors, from technicians to shop owners, to really get a feel for the new product offerings through the various demonstrations, management seminars and technical training sessions. With the number of diverse product categories exhibiting at this one event, attendees can experience the latest advancements in a very efficient manner.”
MARKETING Is It Time To Re-Sign?
Are your business signs keeping up with the times? What does it take to make a good sign great? These are two most important questions, to keep at the fore front of strategic planning, and for remaining relevant as markets change and new competitors with new business models enter your community. Retrofitting your signs is a great way to remain relevant in your consumers minds. Updating your old signs will breath new life into your location. Car volumes lost, may begin to return as passing motorists rediscover your location, again. Aging signs are like people. Some age gracefully. Especially if they were designed to look retro and get better with age, but as with people, some do not age well and begin to look tired and old. We do not want our clientele to get this impression of our facility. This impression costs owners volume as consumers assume that the signs represent the condition of the whole property and may choose to patronize someone else’s newer facilities. Don’t allow your wash to be threatened in this way with lost revenues and volume. Many owners feel trapped with signs which are no longer in code, need repairs and no longer project a good image for the business. As sign restrictions get tighter and tighter, owners with aging signs, are left with signs whose impact is waning with seemingly few options. Regulators are attempting to pass, and in some cases succeeding in passing, codes which do not allow for the updating of signs to modern working standards. Our aging streetscapes send shoppers to those new regional shopping areas with the cookie cutter shopping and restaurant areas, which are duplicated in every city in the U.S. This sends the revenues in other areas, even lower and retail spaces start to empty. This counterintuitive approach actually damages a retail area and creates a long expensive path back to revitalization. Cities have built in resistance to helping business upgrade their signs for personal economic gain. Making an
appeal on an economic basis does not give the city a “dog in the fight”. Speaking about improving the aesthetics of the location is a more direct route to success. Innovative design, can have the inspectors and planners trying to help the owner meet the regulation in order to get the new sign, because the city wants the Sign! Careful presentation and selling of the new sign ideas to the city is key. The planners who say no, have to realize that to say no to this great design, is to live with the old tired sign on their street, for untold upcoming years.
Many owners feel trapped with signs which are no longer in code, need repairs and no longer project a good image for the business. Good planning and review of new sign options by a qualified professional, may provide new insights into how to accomplish what the owner needs while giving a better look to the city and the passing motorists. Working with professionals who can visualize your sign and site graphics in new ways can lead to a revitalized interest in your wash and help strengthen volume. When presented with a problematic sight, a real pro can see the signs constructed and in place, in his head, before it is on paper. This talent can bring a new, expansive array of options to the owner and the regulators.
SCWA Awards 2015 Annually during the Convention SCWA honors outstanding car wash operations and car wash people.
•
Conveyor/Express of the Year
•
Self Serve/Automatic of the Year
•
Conveyor Car Wash Manager of the Year
•
Lube Manager of the Year
•
Community Service Award (recognizing someone in the car wash industry who has made outstanding contributions to their community.)
Deadline is August 1, 2014 Nominate your car wash or another outstanding car wash. Just download an application form from www.swcarwash.org or call the SCWA Headquarters, 800-440-0644. 7
Advantage
MacNeil is setting the bar WHY JOHN PINSON CHOSE MACNEIL “MacNeil gives us a great, safe wash that saves us money and keeps our customers coming back.” John Pinson
Director of Operations, Palms Car Wash, Austin, TX, on his new 205' MacNeil conveyor, with wheel and tire add-ons
JOHN’S TAKE: • MacNeil is “the safest” • MacNeil “saves us labor and generates revenue” • MacNeil “gets the spots that other car washes don’t get” See for yourself what MacNeil is doing for John. What can we do for your wash? Visit www.macneilwash.com/johnpinson
Everyone wants a MacNeil. www.macneilwash.com 8
A Ryko Solutions Company
Advantage A great sign designer will not be constrained by the need to use the same cabinet and limitations of the old sign. Owners should allow for the free flow of creativity by the imagination, of the professional, in these cases. Oh! Don’t be afraid of new ideas! New twists on old ideas have kept old standard U.S. companies alive for generations. Think back to all the Coke slogans and campaigns launched over the years, and yet it is still Coke today. Coke
has been repackaged many times and is always kept relevant to the times. Perry Powell is a car wash consultant. He specializes in Sign Design and construction, Restructuring quick turn arounds, Business model changes and improvements, Management methods and sales processes using the consumer behavioral science of Neuro-Marketing.
Qwik Wash America in Frisco, TX replaced their sign old electronic sign with an up to date modern sign. The new color electronic sign allows for greater expression, even though the illuminated surface is smaller. The smaller surface allowed for the addition of the logo and the words “Car Wash� which were missing from the earlier sign.
9
The Tunnel Experts
™
Thank You for Making SONNY’S
The Best Selling Conveyorized Car Wash Equipment in the World!
SONNY’S
Advantage
Case
Studies
2014
Reserve your FREE copy at SonnysDirect.com
SONNY’S 43-XTB
35 feet 50 cars per hour
The Original Mini Tunnel 43
ft
35 Co
ft
Ba
y
nv ey or
- Xtreme Size - Xtreme Speed - Xtreme Profits
™ ash The CarW
Factory Designed Here. ONLY SONNY’S Foundation Frame architecture delivers over 23,000 custom equipment configurations from standard inventoried components to easily handle your unique wash requirements. When we re-engineer a component to improve safety, performance, and efficiency – whenever possible – we create an affordable retrofit kit to bring your existing equipment up to the latest technology – keeping your tunnel system at peak performance for generations to come.
American Pride
“When I converted our first in-bay automatic to an Express Mini Tunnel, Profesional Car Washes the jump in revenue far exceeded my projections. Now with the second conversion complete I can confirm that SONNY’S proformas are woefully conservative. Be sure to share that with your new customers. Of our 15 locations, we have permits out for another two Express tunnel conversions. The proof is there. The model works.” Charlie Bell Owner - American Pride Car Wash Wake Forest, NC
Built Here. ONLY SONNY’S has the equipment you need in stock for immediate delivery. We are the largest manufacturer of conveyorized car wash equipment in the world and ship over 25,000 feet of conveyor each year, enough to span 83 football fields end-to-end. In an emergency, SONNY’S award winning factory is able to configure and load a complete tunnel system onto a waiting truck, on its way to you, within hours of your order.
Backed Here. SONNY’S has earned Dun & Bradstreet’s highest rating since 1997. With equipment engineered with open architecture, our network of SSO service companies can keep you running with nonproprietary parts sourced locally, in all 50 states, and around the world. Our equipment is designed for easy maintenance, backed by a lifetime weldment warranty, and if you ever suspect a component such as a vacuum turbine is malfunctioning, we’ll loan you a new one to swap out - avoiding any potential downtime.
Decide With Confidence SONNY’S remarkable financial stability is recognized by Dun & Bradstreet, the world’s leading source of commercial information and insight on businesses.
10
We make car washing easy! www.SonnysDirect.com
Toll free 800-327-8723
TM
Advantage
LABOR Immigration Reform Update
Although the Senate passed a Comprehensive Immigration Bill in June 2013, the House has stated its intention of not passing a comprehensive immigration bill and instead pursue a piece-meal approach to immigration. Additionally, mid-term elections seem to be working against the possibility of Congress acting on passing any meaningful immigration bill as those politicians seeking re-election seem intent on focusing on local and state issues and many do not consider immigration issues to directly affect their constituents. In an interesting turn of events, there is also speculation that if Congress fails to act on immigration reform by this summer, President Obama may once again use his executive powers in order to bring some sort of relief to a segment of the undocumented population – in the same way he issued an executive order on June 15, 2012 that gave deferral of deportation and temporary employment authorization for young people who were brought to the U.S. as young children prior to June 15, 2007 and able to evidence that they entered the U.S. under the age of 16, had no serious criminal history, have been residing continuously in the U.S. and have obtained a high school diploma or its equivalent as stipulated under the DHS guidelines.
President Obama may once again use his executive powers in order to bring some sort of relief to a segment of the undocumented population Whether immigration reform is on the back burner or in front – or whether the President will act to offer relief not offered by Congress – there is certainly no doubt that the simmering pot of immigration reform has the potential to cause a lot of heat in the kitchen. Employers must understand that immigration reform has not happened yet and the order of the day is still compliance with existing laws. Do not let the lull of immigration reform lull you into believing that compliance should be ignored or forgotten. Despite all the chatter employers should remain ever-vigilant because there is no speculation (only fact) that this Administration, through Immigration and Customs Enforcement (ICE), has been aggressively targeting employers through their worksite enforcement actions.
ICE’s Most Recent “Scorecard”
• Homeland Security Investigations (HSI) made 520 criminal arrests tied to worksite enforcement investigations.
• Of the individuals criminally arrested, 240 were owners, managers, supervisors or human resources employees. They face charges such as harboring or knowingly hiring illegal aliens. The remaining workers who were criminally arrested face charges such as aggravated identity theft and Social Security fraud. • HSI served 3,004 Notices of Inspection and 495 Final Orders, totaling $12,475,575.00 in administrative fines. • ICE debarred 376 business and individuals for administrative and criminal violations. • HSI conducted 2,421 IMAGE outreach presentations to 15,906 employers.
Best Practices to Protect Your Company Now!
• Designate One Qualified Individual to Manage Form I-9s - this person should review form I-9s to ensure that they are properly completed and maintained separate from other personnel records. This can significantly avoid unnecessary delays in government investigations and possibly reduce further inspection. • An I-9 Expert Ensures Compliance – One In-House expert across the company can serve as the gatekeeper to cross check documentation, keep track of work-authorization expiration, ensure that antidiscrimination procedures are being followed, and record-keeping policies are being followed, thereby reducing the company’s liability for fines. • Establish an Internal I-9 Training Policy – All hiring managers and HR staff must be familiar with the I-9 process. On-site seminars, training workshops, and direct line to legal counsel familiar with I-9 compliance, are key tools. • Conducting an I-9 Audit Saves Time, Money and Headaches – Taking proactive steps towards compliance can save you money in the future. A careful review by in-house counsel or an outside firm is your best defense to significantly reducing fines, negative publicity, and potentially criminal charges. • Establish a Written I-9 Compliance Policy – A clearly written plan, in plain English, for all managers and HR personnel will increase quality assurance and create a solid preemptive risk-management strategy. Although not mandatory, certain employers should consideren rolling in the government’s E-Verify program, showing government investigators that a company is making a good-faith effort to comply with immigration laws. If you have any questions about immigration reform and its implications, feel free to contact the SCWA attorneys at Monty & Ramirez LLP at info@montyramirezlaw.com 11
Advantage SCWA_Ad_March_2014.qx_Layout 1
3/5/14 6:13 PM Page 1
Simplicity in Motion Belt Conveyors & Tunnel Systems from AVW
Our belt conveyors provide long life, quiet operation, and easy transition. Our modular tunnel systems offer stainless-steel construction, gravity-driven components, full build-outs, and limitless customization options. Call us, or visit our website (www.avwequipment.com), and we’ll show you how to create a better customer experience . . . and improve your bottom line!
It’s all about the conveyor! Belt Conveyors
30"/42" Dual Belts
144" (12') Belt
Complete Car Wash Systems
29' -130' Configurations In-Bay Tunnel System installation (Chicagoland)
car wash show BOOTH
2209
12
Our kind of town, Chicago is!
Next time you’re in Chicago, call us to set up a tour.
AVW Equipment Company, Inc. • 105 South 9th Avenue • Maywood, IL 60153 • (708) 343-7738 • www.avwequipment.com
Advantage
FINANCE Deduct or Capitalize - Newer New Rules for Repair Costs
Since the inception of the Internal Revenue Code, the IRS and car wash operators and other business owners have been at odds over whether expenditures are currently deductible or whether they must be capitalized and recovered through depreciation over time. Now, after seven years of drafts and proposed rules, the IRS has issued final regulations addressing whether a cost is a deductible repair or a capital expenditure. The IRS has also released a long-awaited Revenue Procedure that details the procedures necessary to obtain the “automatic” consent of the IRS to change accounting methods as required by the new repair regulations.
REPAIR OR IMPROVEMENT
Since the Reconstruction Era Income Tax Act of 1870, taxpayers have been prohibited from deducting amounts paid for new buildings, permanent improvements, or “betterments” to business property made to increase the value of business property. While this concept has been recognized as part of U.S. tax law almost from its inception, exactly what must be capitalized and what can be currently deducted as an expense has been at issue ever since.
Expenditures that restore property to its operating state are, according to the IRS a deductible repair The IRS’s newly released regulations provide guidance on a number of difficult questions, such as whether replacing a component of a building is a current deduction or whether it must be depreciated over 39 years. Expenditures that restore property to its operating state are, according to the IRS a deductible repair. However, expenditures that provide a more permanent increment in longevity, utility, or worth of the property are more likely capital in nature. If, for example, a car wash operator rebuilds a conveyor system’s motor, the IRS usually considers that expenditure to be a capital expense. In the IRS’s view, rebuilding a motor increases the value of the conveyor (the unit of property) and prolongs its economic useful life. By comparison, the IRS views regularly scheduled maintenance repairs as currently deductible, since they do not materially increase the conveyor’s value or appreciably prolong its useful life.
In general, the new regulations distinguish between amounts paid to acquire or produce business property, equipment, or machinery, and amounts paid to improve existing property. When it comes to “improvements” to business property, capitalization is required if the expenditure is a betterment, restoration, or adaptation of the unit of property. A car wash operator must generally capitalize amounts paid to acquire or produce tangible property unless the property falls into the category of materials and supplies, or qualifies for the so-called “de minimis” safe harbor. The new guidelines cover the following: Materials and Supplies Incidental materials and supplies may be deducted when purchased. Tax deductible materials or supplies are tangible personal property, other than inventory, that is used or consumed in the taxpayer’s operations. This includes fuel, lubricants, water, or similar items that can be reasonably expected to be consumed in 12 months or less. It also includes: • Other property with an economic useful life of 12 months or less • An item with an acquisition or production cost of $200 or less • A component acquired to maintain, repair, or improve a unit of tangible property that is not acquired as part of another unit of property These are items for which records of consumption are not kept and where immediately deducting or expensing them will not distort the car wash operation’s income. Materials and supplies that do not fit these definitions are deducted when used or consumed. Rotable and Temporary Spare Parts This category is a subset of materials and supplies. Several alternative methods are allowed: • The cost of rotatable and other spare parts is deducted only when they are disposed of. • Spare parts are capitalized and depreciated. • The cost of spare parts can be deducted when first installed, but record income at its fair market value when the part is removed, continuing that process until claiming a final loss at disposition.
STAYING SAFE WITH SAFE HARBORS
Safe Harbors can best be compared to legitimate “loopholes” designed by our lawmakers to limit the full impact of a tax law or provision that might be harmful to a particular group of taxpayers. Under the repair regulations, some car wash businesses might benefit from Safe Harbors such as the following: De Minimis Safe Harbor Election A car wash may elect a “de minimis” safe harbor to deduct amounts paid to acquire or produce property up 13
Advantage
14
Advantage to a dollar threshold of $5,000 per invoice (or per item in some cases, but only $500 for those without). Small Taxpayer Safe Harbor The regulations add a new safe harbor for car care businesses with gross receipts of $10 million or less. The safe harbor is intended to simplify small taxpayers’ compliance with the rules requiring capitalization of building improvements. Qualifying small taxpayers can elect not to capitalize building improvements with an unadjusted cost basis of $1 million or less if the total amount paid during the year for repairs, maintenance, and improvements does not exceed the lesser of $10,000 or 2 percent of the unadjusted cost basis of the building. The safe harbor is elected annually on a building-bybuilding basis. Routine Maintenance Safe Harbor When it comes to expeditures for the routine maintenance performed by so many car washes, there is another safe harbor. Routine maintenance includes the inspection, cleaning, and testing of the property, machinery, or equipment and replacement with comparable, commercially available, and reasonable replacement parts. Unfortunately, in order to be considered “routine” maintenance, the car wash operator has to expect to perform these services more than once during the class life (generally the same as for depreciation) of the property.
THE ELECTION TO CAPITALIZE
The final regulations include an entirely new provision that allows a car wash operator to treat amounts paid for repairs and maintenance to tangible property as amounts paid to improve that property. Thus, if the operator chooses, the amounts paid as property improvements become assets subject to depreciation — as long as the expenditures are business-related and the amounts are treated as capital expenditures on the operation’s books and records. Another significant change in the new regulations allows a car wash to take “retirement losses” on components. If, for example, a building’s roof is replaced and the old roof disposed of, the operation now has the option of taking a retirement loss for the old roof. Of course, the replacement roof must be capitalized, but the retirement loss can be claimed on the roof replaced.
PROPERTY UNITS
Much of the guidance provided by the IRS revolves around what constitutes a “Unit of Property” (UOP). In general, the smaller the UOP being placed in service, repaired, or improved, the more likely that the UOP’s cost will have to be capitalized. For example, work on an engine of a vehicle is more likely to be classified as an expense that must be capitalized if the engine is classified as a separate UOP. By contrast, if the UOP is the vehicle, the engine work has a better chance of passing muster as a repair.
15
Advantage
16
Advantage
ACCOUNTING METHOD CHANGES
The new repair regulations have been described as the most comprehensive changes to the issues of capitalization and write-off in more than 20 years. Some of the new regulations’ safe harbors and elections can be implemented on the car wash operation’s annual tax return. Unfortunately, since the IRS considers many of the provisions to be accounting methods, operators must file not one, but numerous Form 3115s, Application for Change in Accounting Method. A business seeking to change to a method of accounting permitted under the final regulations must get the IRS’ consent before implementing that new method. Under the automatic consent procedures, the IRS will consent when a Form 3115, Application for Change in Accounting Method, is attached to the business’s timely filed tax return for the year of change (with extensions). A signed copy must also be sent to the IRS’ national office.
QUESTIONS ANSWERED
The question of capitalization versus expensing of business property has long boiled down to a question of whether the expenditures maintain or restore property in or to its ordinarily efficient operating condition (expense) or appreciably prolong its life, materially increase its value, or adapt it to a different use (capitalization). The tax strategies and methods used in the past may no longer be either feasible or advisable. Through newly created “safe harbors” and other taxpayer-favorable features, the new regulations will provide tax planning opportunities — and potential tax savings — for car wash operators who will face fewer disputes with the IRS. While the new repair regulations bring helpful clarity and order to the treatment of tangible property, and go a long way to answering the question of what is a repair and what is an expenditure that must be capitalized and depreciated, they pose considerable compliance risks for every car wash. However, because many car wash operators will soon discover they need to elect new tax strategies that require an application for an accounting method change, professional assistance is almost mandatory. Mark E. Battersby is an Ardmore, PA-based freelance writer, specializing in finance and tax issues.
Perspective At the Car Wash - Keys to Detailing Success
This article is intended for the car wash owner who is considering offering or currently offers detailing services. Even if it is something that you have not considered before, I encourage you to read on; the information herein will help you find out for sure whether or not detailing is for you. I
would like to go over a number of things that you can do to help ensure that your detailing operation is as successful as it can be. Let’s begin by attempting to determine who your detail customers might be and how you will market to them. To do this, answer the following questions. • What are the types of cars that are coming into your car wash? • What is the median income of your car wash customer? • What types of car wash menu items do you offer? At what price points? • What types of wash packages are customers purchasing? Basic wash or upgrades? • Is anyone asking for more than a car wash? • What is the neighborhood like or what types of vehicle owners drive by? I believe that a certain amount of frankness will go a long way to avoiding disappointment with a detail operation. For example, if you are selling cheap car washes in an effort to bring in volume, you have to sell your detailing cheaply as well. Customers who are accustomed to paying for rockbottom, coupon-discounted, exterior-only car washes are not going to be ready to pony up for high-priced, retail-style complete detailing. Please do not misunderstand my statements in this last paragraph, however. There are definitely detailing options
Grit Trap Disposal Testing • Waste testing that meets any landfill or disposal site requirements. • Soil, water, waste and air testing.
day o t s u l l Ca ial for spec g. ricin SCWA p
INTEGR TY testing Chris Ewert • cewert@austin.rr.com 8127 Mesa Drive, #C-305 Austin, TX 78759 www.integritytestingaustin.com 17
Advantage
18
Advantage that can be offered at price points that will be attractive to the price-conscious car wash customer. Whether you own a large car wash or small, whether your average ticket is $3.99 or $24.95, there are some things that you can do to ensure that your detail operation reaches its full potential. These include: • Create detailing menu items that work for a large portion of your customers. • Ensure that your sales staff has the tools it needs to sell detailing. • Standardize your detailing processes. • Ensure that the detailing operation looks professional. Let’s talk about each one of these items.
THE DETAILING MENU
Having an appropriate detailing menu is very important to the success of the detail shop. By “appropriate,” I mean that it must have items that will be popular, needed, and desired by the typical drive-up car wash customer. Additionally, it must be priced to attract the target customer while still allowing for a reasonable profit for the detail center. For some operations, express detailing menu items might be all that will work because the price points associated with express are the only ones that match the typical customer budget. For other operations, a mix of express and full-service is best because several types of customers come
through the car wash. And still others find it necessary to offer a hybrid of the two because their customers are not happy with the results offered by express detailing but are not willing to pay for the thoroughness of traditional fullservice detailing. In my experience in the car wash industry, I have found several common mistakes relating to the menu. Often it is too complicated, with many more items than the customer can understand or the service writers can remember. Often, the prices are too low compared to the amount of work that is required to fulfill the menu item. Another common problem is that there is a disconnect with what the menu says, what the ticket writer sells, and what the detail technician does. All of these conditions ultimately lead to dissatisfied customers and lower detail sales. I strongly recommend that each car wash operator work with an independent consultant who can objectively analyze all of the factors that go into a menu that is appropriate for the operation. The increased sales that are likely to result will pay, many times over, for any consulting fees incurred.
SELL IT RIGHT
If your operation does not utilize service writers, then simply substitute the term “service writer” with the title of the person that will interface with potential detail customers in your operation.
CryptoPay Credit Card System Engineered to Reduce Fees STOP PAYING TRANSACTION FEES ON EVERY SWIPE! Auto Cashiers
Pet Wash
Self Serve Bays
Vacuums
Vending
Go online now to learn how CryptoPay reduces fees, secures your transactions and simply stops fraud.
719-277-7400 | getcryptopay.com
19
Advantage
20
Advantage Once you have a good menu of detailing services, it is critical to help the service writer understand each menu item. Let’s think about it for a moment...the service writers are the ones that interface with the drive-up car wash customer. They will be the first ones to see the condition of the car, hear the customer’s initial service request (need or desire), and explain the available menu items. Thus, the service writer must have a clear understanding of the expected results of each menu item and the service capability of the detailing center as it applies to each item. I recommend that the service writers and the detail manager be involved in the drafting of the detail menu. I also recommend that the service writers be involved in any of the detailing training that is provided to the detailing technicians. This will allow the service writers to fully understand what is involved in fulfilling each detail menu item. Additionally, the service writer must be provided with training on how to evaluate the need of each vehicle. For example, the service writer might be confronted with the situation in which the customer comes in with a heavily oxidized paint job and asks for an express hand wax. The service writer must be able to identify that paint problem and have enough understanding of the capability of the express hand wax service to know that it will not solve the problem. Instead, that customer should be referred to the detailing manager for a consultation on
restoring the paint, which is a multi-step process that can be handled by appropriately trained full-service detailing technicians. The more time you invest in hiring, training, and incentivizing your sales staff, the more money your detailing operation will generate.
GET THE JOB DONE Once the detail has been sold, it is the responsibility of the detailing staff to correctly process the vehicle according to what menu item was chosen. Their capability of doing so rests (are you ready?) squarely upon the shoulders of the car wash owner. Yes, you. How? You are ultimately responsible to make sure that there are standards and standard operating procedures for each of the items on your detailing menu. Those standard operating procedures must include the appropriate equipment and chemical for each step in the process. Moreover, the detailing technicians must be trained in the techniques that should be used with each tool and chemical to achieve the standard for that menu item. It amazes me how many car wash operations leave their detailing cash cow in the hands of a detailer who claimed he was experienced. And then the owner wonders why it takes so long to get a detail done and why the customers keep complaining about sloppy results. This all could be avoided if the owner sets up (or empowers the detail manager to set up)
21
Advantage
BUILDING A PROFITABLE CAR WASH MORE CHOICES FOR MORE PROFIT POSSIBILITIES
A
t the end of the business day, you look at wash counts and ask questions. Were my customers
happy with the quality of their experience? Did I experience downtime? Was I profitable? For more than 35 years, Ryko has been helping business owners thrive with superior integration, end-to-end clean vehicle solutions, environmentally safe chemicals, local service and customer marketing programs that deliver a competitive edge for your car wash venture. With Ryko, you get
the answers – and profits – you’re looking for.
DRIVING CAR WASH SUCCESS
www.ryko.com 800-284-7956
22 Ryko_TradeAd_AutoLndry.indd
1
6/23/11 3:47:32 PM
Advantage a rigorous training program for each new hire. If this is too much work, then hire someone to do it for you. Having established standard operating procedures and then training each technician on those procedures will help to ensure increased efficiency (i.e., more cars processed each day), better results, and ultimately happier customers. Just so we are clear, this goes for both full-service and express detailing.
DETAIL THE DETAIL CENTER
A common problem in the car care world in general is that the detail operation is relegated to “that shack in the back.” This is especially common in auto dealerships and in some car washes as well. Even some stand alone detail operations are pretty gruesome when you walk into the work area. One way that you can show your car wash customer that you are serious about auto detailing is to present a professional image at your detailing center, regardless of its size. This starts with dressing up your detail staff in collared shirts, establishing a requirement that they wear matching pants and shoes, and by demanding specific minimum grooming standards. The detail staff should be at least as clean-cut as the most professional client that they may service. That might mean no personal hats, clean-shaven every day, no tattoos or piercings, and perhaps even no smoking. This may sound harsh — and you can take it or leave
it — but, let’s face it, we are in the business of “clean.” How can we expect our customers to spend money to clean up their cars if the people doing the work don’t appear clean? This presentation of cleanliness also applies to the work area itself. I believe that the goal should be that the work area be as clean and tidy as the completed cars that come out of it. Clean floors, clean walls, no trash, no towels on the floor, all equipment “detailed” regularly, all supplies organized on carts, shelves, and in cabinets. Bright lighting, clean windows, clean bathrooms, and so on. Incentivize shop cleanliness just like you incentivize detailing perfection.
SUMMARY
Express or full-service detailing at a car wash can be a great additional profit center. The keys to making this happen include analyzing and understanding the needs of the typical car wash customer, creating a detail menu that captures these needs, ensuring that the sales staff fully understands each item on the detail menu, ensuring that the detail technicians have the equipment and training to perform the work, and creating a detailing facility that matches, in cleanliness, the cars that it services. Prentice St. Clair is President of Detail in Progress, a San Diego-based automotive reconditioning consulting firm.
Site Evaluation Demographic Reports Carwash Market Evaluations
Training On-Site Training Training Seminars
Design & Development Modular Building Systems Construction Assistance Site-Plan Design Complete Equipment Installation
PDQ ICON®, LASERWASH® & TANDEM® (Touchless & Soft-Touch In-Bay Automatics)
Financing Preferred Lending Sources Equipment Leasing Programs Marketing Signage Programs Promotional Ideas Advertising Assistance
Equipment/Parts/Supplies ®
MACNEIL® Tunnel Equipment LUSTRA® Vehicle Wash Solutions CAROLINA PRIDE® Self-Service Equipment ISTOBAL® Bus & Truck Automatic Washes ISTOBAL® Modular Buidings KOOLER ICE® Water & Ice Vending Machines
Visit Us at www.wet-texas.com or Call 800-966-WETT (9388)
Austin (512) 389-2822
Dallas (972) 602-4442
Houston (281) 657-0575
Odessa (432) 367-9388
San Antonio (210) 404-9456
Corpus Christi (361) 334-2151
Harlingen (956) 423-9949
Laredo (210) 404-9456
San Angelo (325) 658-5700
Temple (254) 228-5076
23
2014 SCWA Wade Welch Memorial Golf Classic
A
record number of golfers enjoyed the 2014 edition of the Wade Welch Memorial Golf Classic played at La Cantera Resort – Palmer Golf Course. The SCWA event is played every year in memory of long time SCWA member and avid golfer, Wade Welch. This year 96 golfers including car wash owners and vendors played for prizes and prestige. SCWA President, Clayton Clark, “the Golf Classic is always a good day with friends to play golf and just have fun. This year I think everyone was excited to be able to play the Palmer Course – and it was a challenge. Every year the Classic has grown larger and I know with the enthusiasm I experienced this year – it will continue.
Special Thanks to the Sponsors Classic Diamond Sponsor – Midlothian Insurance Classic Reception Sponsor – Big Man Washes Longest Drive Sponsor – Big Man Washes Closest to Pin Sponsor – DRB Systems Classic Lunch Sponsor – Midlothian Insurance Putting Contest Sponsor – Nationwide Insurance Kick Off Sponsor – RYKO
Advantage
Dilution Ratio 630:1
Dilution Ratio 380:1
Dilution Ratio 380:1
Dilution Ratio 250:1
Dilution Ratio 270:1
Scotch Plaid, Inc.
Dilution Ratio 64:1
Saving you money, one pail at a time! 800-527-5220 www.scotchplaid.com 214-358-2575 26
Advantage
Endorsed by
27
Advantage
Put your In Bay Automatic
on the FasTrak!
Fast, Reliable, Water Saving Design with an Open & Inviting Bay
The Water Wizard™ FasTrak™ is a revolutionary touch-free in bay automatic. It provides reliable operation, consistent results, and increased uptime. The Water Wizard™ FasTrak™ has been engineered to maximize durability, reliability, and a low cost of ownership. The FasTrak™ directly responds to consumer demand for quality and speed in aesthetically pleasant environment. Increase profits and speed while ensuring customer satisfaction!
Contact Us! 5842 W 34th St • Houston, TX 77092 1.800.999.9878 • 713.683.9878 www.colemanhanna.com www.facebook.com/ColemanHannaCarwash
28
Advantage
Management Teamwork - Build a Winning Team for Your Car Wash
Over the years there have been numerous articles on building and operating a successful car wash. They point out many of the important issues like demographics, traffic count, location, layout, equipment, and chemicals, as well as a strong marketing and financial plan. However, one element is often overlooked — building a team and fostering teamwork at the wash. I have been very fortunate during my career in this industry to have worked with many talented and successful teams. Due to those experiences, I have often been asked the secret to building a successful team. Thinking back on those experiences I think that there are many lessons that could be used today to create a solid team and a teamwork atmosphere.
SETTING GOALS AND KEEPING FOCUS
Today there are many challenges to operating a successful wash. I think the greatest challenge is to set goals and maintain the focus to achieve them. In addition to setting goals there must also be standards and actions to meet them. While it takes a good team to work together, some-
thing has to keep that team on track. Focusing on goals does that. Ultimately everyone involved must gauge the success of their individual efforts by how well they work toward the goals that have been set. While it is obvious that a wash’s primary goal is to operate profitably, to be successful that goal must be clearly defined with specific activities to achieve success. Setting achievable goals for sales and profitability are also essential for developing a good team and teamwork. Probably the most important element for establishing a good team and for it to work effectively is having a leader that shares the vision, is focused on the goals for the wash, and can effectively communicate those goals to all team members as well as putting them into action. In most cases that will be the owner/operator but it could also be the manager. Even if you have a strong team leader, from time to time team members may waver and lose focus of the wash’s goals. When this happens goals should never be questioned in that atmosphere. Although that may sound a bit dictatorial it is important to spend all efforts toward achieving goals rather than questioning them. Methods and actions designed to attain goals may be somewhat flexible but the goals themselves should not be. It is essential that all team members know what is expected of them, be produc-
Distributors for: ◆ Hanna-Sherman International, Inc. ◆ Meguiar’s Magnum Products ◆ Polychem Products ◆ Turtle Wax ◆ X-Treem
10701 King Williams Dallas, Texas 75220 29
Advantage
30
Advantage tive members of the team, and not question the goals that have been set. At the same time it is very important to create an atmosphere that encourages positive actions while allowing each team member to maintain their individuality. It is important for them to enjoy and take pride in their work and even at times have some fun doing it. All team members must also understand that there will be times when working hard as a team will be required to achieve the goals that have been established. This does not mean that each team member should not have the opportunity to grow and to maintain their identity but as a team there will be times when it is essential that they set aside their individuality to combine their efforts to achieve common goals.
SETTING UP YOUR TEAM
When designing your team there are several people that you may not normally think of including. Your equipment and chemical suppliers (if you use local ones) can be very important elements on your team. They may also be able to assist in training employees that you do not feel comfortable doing yourself and possibly offer marketing assistance in the form of product rebates or supplying available marketing aids or programs. Keep in mind these people may have more contact with those you hire than you realize. It is important that they understand how you want
to operate and that they support your efforts to develop a car wash team. They may even be a good source of potential employees as long as those employees would be loyal to you rather than them. Unless you are proficient at marketing efforts, it would be wise to include either someone who is a marketer or a company that can design a marketing program consistent with your wash’s goals and operating procedures. Finally, unless you do your own books, a good accountant that understands how your business operates and can do more than just crunch numbers could be a valuable team member. Once you have organized your team, it is a good idea to get all the management team members together formally/ informally in one place periodically if feasible. This would be a good time to review goals, check up on your progress, renew the team’s efforts, and strengthen the bond among the team members.
HIRING SMART
One of the more critical decisions you will make is hiring staff. Putting together a good team dictates hiring people equipped to do the job at hand. This may sound logical but it is not always the case. Hiring friends or relatives is only a good idea if they are suited for the work you need to have done. When word gets around you are hiring,
s u l P d l e i h s a Total Car Protectant Dur
NEW!
®
Never Battle the Elements without a Shield! • Protects the vehicle’s surface from UV rays, bird droppings, acid rain and hard water spots • Gives the look and feel of Carnauba Wax • Enhances the WOW factor with an extra foamy formula • Has a pleasant fruity fragrance as an alternative to our original Durashield lemon fragrance
Durashield Marketing Programs available. Contact your Blendco Systems representative for more information. One Pearl Buck Court • Bristol, PA 19007 • 800.446.2091 • www.blendco.com
31
Advantage
Big Man Washes The Complete Car Wash Company S e rv i n g
T e x a s
CONSTRUCTION Design
&
&
O k l a h o m a
ig
B Build
Development
ig
EQUIPMENT
B Wash
Sales
&
Installation
ig
B Clean
CHEMICALS & DETAI L Sales
&
ig
ly B p p u S
Service
SERVICE Maintenance
&
ig
eB c i v r e S
Repair
PARTS Repair
&
Replacement
To see more BIG THINGS Visit us @ www.bigmanwashes.com Big Man Washes, Inc. is a member of SONNY’S Select Service Organization (SSO). B I G M a n Wa s h e s , I n c .
32
•
Decide With Confidence SONNY’S remarkable financial stability is recognized by Dun & Bradstreet, the world’s leading source of commercial information and insight on businesses.
3 4 2 1 S . B r i e ry Roa d
•
I rv i n g , T X 7 5 0 6 0 • T E L : 9 7 2 - 9 8 6 - 7 2 3 9
Advantage expect to be contacted by former or present applicants from surrounding washes. Hiring experienced people is not always a good practice depending on what their “experience” has been. Don’t assume that since they come from a successful wash they were a part of that success or that they will make your wash successful. Make sure they will become good team members that will perform their jobs as you want them done — not as they have done them in the past. It is impossible to always be right so, instead of trying to defend a bad hiring decision, be open and honest with yourself when someone is “just not working out.” It may be hard to let someone go, but the consequences of keeping them on are far worse. One of the big concerns is what to pay employees. For years the standard for entry-level employees was whatever McDonald’s employees or similar type workers were paid. While that might be a starting point, I think there are few tasks at a car wash that relate to fast food. While it might be fair to start entry-level employees at that rate, the potential employee’s work background should be taken into consideration rather than sticking to an established wage schedule. In order to keep quality employees, you need to make sure you pay them competitive wages for the work they perform. When interviewing any potential employee, the following basic guidelines should be used as general rules to help you make your selection. You might even want to keep a
6860 N. Dallas Pkwy #200 Plano, TX 75024 Phone: 972-618-1047 Fax: 877-262-3584
“cheat sheet” to make sure you cover all the guidelines you have chosen to set down when interviewing a potential employee. Ask whether the individual: • Is physically capable to perform the duties • Generally exhibits neat appearance and courteous behavior • Is a good listener • Is able to express him or herself well (not a good talker — a good communicator) • Expresses a desire to learn more about car washing • Is able or interested to work as part of the “team” There may be several other traits you prefer as well as these but, remember, this person will represent your wash to your customers and even to a certain extent to fellow employees. Does the person you hire represent you the way you want to be represented? Will they be a good fit with the rest of the team?
TRAINING Any wash employee should be well trained and supervised before being left on their own to make sure the training has taken hold. It is also important that training is on-going with periodic reviews and updating of procedures to be followed. Good teamwork may require repeating the same procedures over and over.
AmeriStar C O M M E R C I A L
Continued on pg. 37
Chet-Wilke –Broker Direct: 972-754-2484 CarWashSale.com WilkeChet@verizon.net 33
Advantage
34
Advantage
35
Advantage
36
Advantage Continued from pg. 33
It means working toward achieving the goals for the wash. Your training program should instill this in every employee you hire.
MAKING IT ALL WORK
When organizing and leading a team, an individual’s abilities must be identified and used to their advantage within your organization. At the same time, taking this into account, you must understand that success in one role does not always translate to success in another. If you have hired well, let the individual use their skills and abilities to do their job. Keep in mind, if you make them accountable, you must also allow them to “do it their way.” If you want something done a certain way you have the right to lay it out that way — but, if you do, you also assume much of the responsibility for the result. Nothing stifles enthusiasm and growth more than holding someone accountable for something they did under your direction. At the same time, team members must realize they will be held accountable for their failures as well as their successes. If they are given specific instructions they should follow them. However, ultimately the burden of accountability in those cases would be much less than if they were performing a task on their own. Everyone has an ego and personality traits. It is important to recognize those factors when assigning tasks and responsibilities, making them assets rather than liabilities for the team effort. When egos or personalities
inhibit the efforts of a team, it is the role of the team leader to recognize this and deal with it. Nothing destroys a team more than internal conflict. When it arises, it must be dealt with immediately. While a structured incentive program and/or pay schedule can be an asset to improve performance, there should also be room for some “special, unexpected perks” in the workplace. Sometimes such events can yield positive results both for the team or individual team members. Ordering in pizza or burgers for the whole team on a day when the work is especially challenging can make the team feel appreciated. Holding an employee group event like a Christmas Party, summer picnic, or outing to a local attraction helps reinforce positive feelings among the group as well as toward ownership. Giving special recognition to an individual team member must be done carefully. If not done properly and for a good reason, it could negatively affect the team. That being said, giving a team member something special like a reward, gift card, or even time off in recognition of superior performance can go a long way in building a team effort by showing that you recognize excellence in individual achievement as well as the team’s.
BE PATIENT BUT KEEP THE BALL ROLLING
Everyone would like to see immediate results for their efforts but that is not always the case when building and maintaining a team. You must have the confidence and
37
Advantage
38
Advantage faith to continue your efforts even during those times when expectations are not being met or results aren’t the best. At those times it may be time to review your goals or work a little harder and smarter rather than a time to regret what the team is turning out. Any changes you may decide to make must be made carefully and only when it is apparent current actions are not achieving the desired results. In the end you should be looking for continual growth and reaching your goals as being the number one consideration before making any changes. In today’s marketplace many washes are struggling through tough economic times. This often causes owners to question every expense and effort that they feel will not produce immediate gain. While that might seem like the way to go, it may be very shortsighted and not very realistic. To be sure, budgets must be designed to be cost effective and basic expenses have to be covered. There is no doubt that profit needs to be made to keep the doors open. Without goals and team efforts, operating on a dayto-day basis may allow you to stay in business in the short run but may do a great deal of damage in the long term. For long-term success and growth there is no substitute for maintaining a strong team effort. It also means giving enough time for all your efforts toward a team approach to work.
Putting together a team and making it work takes careful planning. It means setting realistic goals, keeping focus, hiring effectively, on-going training and supervision, and, maybe most important, having patience to let it all work together. The end result will be a well-run, profitable wash — something well worth working toward and waiting for. Ron Holub is an industry veteran who has worked at many levels in the car wash industry including car wash management, owning a distributorship, and working for and managing major chemical companies. He currently does consulting in the areas of marketing, training, and management in the industry.
Self Serve Reinvention - Stay Competitive and Remain Profitable
Over the past decade, car wash owners/operators have seen many changes and innovations in the car wash industry. Advancements in technology, social media, and marketing have changed the car wash landscape, impacting how we do business on a day-to-day basis. To stay competitive and remain profitable, you have to embrace Continued on pg. 43
39
Advantage
40
Advantage
41
Advantage
SOUTHWEST
CAR WASH ASSOCIATION
Industry Innovations • Business Solutions • Plus Unparalleled Hospitality
2015 February 22-24, 2015 | Arlington Convention Center | Arlington, Texas
www.swcarwash.org 42
Advantage Continued from pg. 37
these changes and integrate them into your business plan, especially if you are a self-service car wash owner/operator. The evolution of express tunnels and in-bay automatics has drastically cut into the market share once dominated by the self-service industry. As these business models have evolved, so must the self-service operators. The days of purely collecting quarters and washing bays down are behind us. It takes much more effort in today’s economy to be a successful self-service operator. Let’s review some opportunities available to the self-service operator and discuss how to stay ahead of the curve.
REMAINING PROFITABLE
Just as other car wash disciplines have evolved and come to integrate technology into the business so must the self-service industry. Whether trying to cut expenses or increase revenue, there are advancements that serve both of these needs. Natural Gas With operational costs continually rising, efforts must be made to control utility bills. Natural gas prices have been on the decline since a peak rate in 2008, which this past winter has drawn many operators’ attention. The winter’s freezing gridlock has driven up natural gas usage and hence heating bills. Operators are using hot water heaters, boilers, and room heaters more due to the unusually low temperatures. If you are using an older heating system, chances are the equipment’s efficiency is very poor. Scaling or build up on the unit’s heat exchanger can reduce the operating efficiency from when the unit was new. If the unit is 10 or more years old, chances are it is less than 70 percent efficient. While you can have the heat exchanger cleaned, it might be worth looking into buying a new high-efficiency unit. Depending on the brand or style, new units offer 95 percent or better efficiency. Based on your gas usage this could result in a 30 percent annual savings on natural gas while creating a quick payback on the investment. Electricity Electric usage can also be reduced through a few simple improvements. In some cases there are subsidies available to pay for a portion of the upgrades. Depending on your geographical location and electric provider, there may be subsidies available to help pay for the lighting upgrades. Many electric providers have plans that offer either credit or rebate checks to any business that cuts back on the consumption of electric. In some cases, the rebates can be as much as 50 percent of the cost to replace. If you have existing metal halide or fluorescent lighting systems, there are major incentives to replace with more efficient LED lighting. The LED lights will reduce the electric bill and require less maintenance such as bulb and lens replacement. In addition, the upgraded lighting will accent the location and help draw in customers during off hours.
STAYING COMPETITIVE
Operators must continually drive value to existing customers and find creative ways to entice new business. Marketing For example, tunnel washes use the “$3 Express Wash” or “Free Vacuums” while in-bay automatics use “Two Dollar Tuesday” or “Buy 4 Washes Get 1 Free” marketing ploys. Self-service operators must create a similar marketing edge using available features. Self-service car washes must find ways to bring a wow factor to the experience — e.g., combine the use of fragrant chemicals, music in the bay, and other features to create a valued experience. Payment Methods Most self-service car washes give the customer the option to pay with quarters, tokens, or bills. To stay competitive in today’s car washing market one must offer credit card acceptance in the bay. Regardless of transaction fees, monthly reporting, or DSL costs, the benefits of having credit card acceptance outweigh them all. Typical credit card systems can be set up to have the timer count up, versus the standard cash option of counting down. This allows the customer to swipe once, put his/her wallet away and wash the car. When cash is used the customer may put in the minimum start amount. Then as time runs down, the customer has to decide, “Do I want to spend any more money?” as the last minute alert “beep, beep, beep” sounds. Over the years, self-service operators have conditioned customers to hurry up and finish washing when they hear the beeping sound. With a credit card system and count-up timer, the customer washes his/her car and pushes a stop button to end the transaction. This progression supports customers taking their time, doing a better job washing their vehicle, and, in turn, spending more money. This is not speculation; rather, it’s a fact that customers who use credit cards spend a minimum of 20 percent more time washing their car than those who use cash to start the transaction. Whether you have an existing credit card system or are looking to install a new system, make sure to advertise the change. Most systems come with small instruction signs that do not appropriately market the upgrade. Invest in signs that will tell customers about the new feature and how to use it. Not only should there be instruction signs in the bays, but also banners, wind signs, or something similar that should be placed at the entrance to the property. Service Selections After the customer is drawn into the bay and starts the meter box, what selections do they have available to choose from? Are the meter box selections up to date with today’s offerings? Standard selections aside, there are other options that need to be available for customers to consider — for example, in-bay dryers, low-pres43
Advantage
Both of These Are
FREE VACUUMS ONE makes Direct Deposits to your account
ONE differentiates your location
ONE gives your customers choices
Quadra with Free vac key switch
$5,900 Factory Direct
Push-Button Vacuum
$960
Factory Direct
• Fragramatics Quadra with the Free Vac Key Switch allows you to switch from “All-Pay Mode” to “Free Mode” or vice versa with the turn of a key. • Standard vacuum function can be “free” or “pay”. • Customers always pay for premium services : Turbo Vac, Spot-removing shampoo or Fragrances. • 8 different credit card systems to choose from. (e-Port pictured/wireless). Can accept coins, tokens & bills. • Cashless option shown. • Installation: Bolt it down & add electricity.
Express Washes with free-vacs — Gated or Non-Gated Mini-Tunnels — Gated, Non-Gated or Promotional Self-Serve Washes — Traditional, Gated or Promotional
Enhance your location AND your income! Call 800-643-1574 FRAGRAMATICS MFG.CO., INC. • P.O. Box 1140, Pine Bluff, Arkansas 71613 Toll Free: 800-643-1574 (USA & Canada) • Fax: 870-535-6690 • Email: sales@fragramatics.com • Visit: www.fragramatics.com
44 060513 FragramaticsAd_FreeVac.indd 1
6/10/13 9:42 AM
Advantage sure clear-coat protectant, medium-pressure spot-free rinse, super-high-pressure rinse, and tri-foaming brush. Updating or “refreshing” the rotary switch with new options is a must. Operators who are on a tight budget and cannot afford to spend money on new options can start with simple changes such as adding a new chemical with fragrance and color. In most cases, there are one or two selections that are not used frequently by customers. Take advantage of the existing equipment, change the selection to a different chemical, and market it to customers. For example, an operator has low-pressure engine cleaner and sees little use of this function. Use this for a new marketable chemical such as low-pressure wax. It is a very easy change, requiring no more than a chemical switch, new decal, for the meter box, and a sign to market the chemical in the bay. Once again, it is as simple as taking advantage of something not being used and converting it to a new, more profitable function. Social Media Another low-cost solution to help drive business to the wash is social media. Many operators have gone to this style of marketing to let their regular customers know about specials or events going on at the wash. Using Twitter or Facebook to alert customers that special pricing or discounts are available is a low-cost marketing technique. In addition, it supports brand loyalty and drives value to the
customers who use the wash on a weekly basis. Again, there is only a time investment associated with having a Twitter or Facebook account. Using these media will help drive the wash’s competitive edge in the market. Wash owners who operate in highly competitive markets will find there is value not only in knowing the competition but also meeting with them to discuss market strategy. Instead of engaging in pricing wars and reducing the amount of available profit, try working together and set standards that allow everyone to compete fairly. While this may prove to be very difficult, finding common ground and working together will help everyone involved.
NEVER-ENDING ADJUSTMENTS
In any market, staying ahead involves continually reinventing your business, offering the best value to your customers, and doing so while controlling expenses. The self-service market has its place and will continue to thrive as operators continue to follow this process. The time and effort invested by operators will be rewarded with repeat business and continued success. There will always be a need for self-service washes and operators who strive to run the finest facilities. Trent Walter is General Manager of Ashland, OH-based National Pride Equipment Inc.
45
Advantage
Did You Know... A New blood test for early stage cancer is on the way? The new test checks for serum-free fatty acids, which are much higher in people with lung cancer and prostate cancer. The test accurately identified cancer patients 70% of the time. Texting is as dangerous as drunk driving? Both behaviors led to the same degree of slowed braking time and increased speeding. Dogs may be able to sniff out deadly infections? A beagle has been trained to detect the intestinal bacterium C. difficile in stool samples. If other dogs can be trained to detect such bacteria, this may lead to faster detection and better treatment. C. difficile spreads rapidly in hospitals and long-term-care centers. The CDC reports that bacterium causes 14,000 deaths in the US each year. Most retirees who want to work can’t find jobs? Between 60% and 80% of preretirees say that they expect to work during retirement. But in 2012, only 18.2% of people age 65 and older actually were working–and those with jobs often were making far less money than before they reached age 65. Instant coffee has the same health benefits as brewed coffee? In fact, studies have found that the way instant cof-
BOARD OF DIRECTORS President:
President-Elect:
Vice President:
Treasurer:
Past President:
Vendor Vice President:
Clayton Clark Houston, TX (832) 678-3031
Eric Warden Southlake, TX (817) 329-8777
Barry Farris Frisco, TX (214) 325-0778
Don Witt Dallas, TX (214) 358-2575
David Swenson Austin, TX (512) 346-8050
Bob Kopko Uniontown, OH (800) 336-6338
Directors Larry Ayres Wichita Falls, TX (940) 636-3685
DeWayne Hall Oklahoma City (405) 414-1489
Alan Palermo Houston, TX (713) 946-1600
Tyler Furney Harker Heights, TX (254) 245-8657
Mike Hogan Houston, TX (713) 467-1408
Phil Tutt Spring, TX (281) 414-8872
Tyler Greffin Burnsville, MN (952) 808-3640
Troy Kunkel Fort Worth, TX (817) 808-8769
Andrew Zamora Lubbock, TX (806) 543-2775
Executive Director: Chuck Space
4600 Spicewood Springs Rd., Ste. 103 Austin, Texas, 78759 (800) 440-0644
www.swcarwash.org
The Advantage is the official publication of the Southwest Car Wash Association. It is published four times each calendar year by SCWA, 4600 Spicewood Springs Rd., #103, Austin, Texas 78759. The officers, directors and members of the Southwest Car Wash Association, as well as The Advantage editors, in accepting advertising for this publication, make no independent investigation concerningthe services or products advertised and neither endorse nor recommend or make any claims as to the accuracy and therefore assume no liability thereof. The opinions expressed in the articles are not necessarily the opinions of SCWA and its publisher and therefore makes no warranties and assumes no responsibility for accuracy or completeness of the information herein. (512) 343-9023.
46
fee is produced causes it to contain a higher concentration of healthful antioxidants, such as phenols and flavonoids. Instant coffee also has about the same levels of chlorogenic acid, which may have cardiovascular benefits. Restrictions on antibacterial soaps will require manufacturers to prove that these soaps are safe, effective and better at stopping illness than ordinary soap and water? Products that cannot provide proof will have to be reformulated or relabled. Lightning increases risk for headaches? Chronic headache sufferers had a 31% higher risk for headaches when lightning struck within 25 miles of their home – and migraine sufferers had a 28% higher risk for migraines. Reason: Possibly related to lightning’s electromagnetic waves. Half of drivers cannot identify their cars’ dashboard warning lights? Forty-nine percent did not know what the tire-pressure warning light was...46% could not identify the brake-system warning light...42% did not know what the cruise-control activation light meant. Smartphone apps that act as medical diagnostic tools will be regulated by the FDA? These apps include software that enable a smartphone to read a patient’s heart rhythm..check blood pressure...and monitor blood sugar levels.
Welcome New Members The SCWA members listed below have joined SCWA since our last issue. We Appreciate your Support! Doug Barnes
Hereford Super Wash Lazbuddie TX
Charles Bradley
Phillip Hendrix
Justin Passalaqua
Thad Hill
Ryan Smith
Cestus Red Oak TX
Quick & Easy Car Wash Wichita Falls TX
Gameday Car Wash Orange TX
Kris Germany
B&J Car Wash Wichita Falls TX
Mint Condition Car Wash Grand Prairie TX
Kris Germany
Newman Melin
Kuldeep Gyani
Brad Moore Tulip 18 Properties Hooks TX
Southwest Car Wash Wichita Falls TX
The Wash Club Laredo TX
Jun Kim
Auto Spec Conroe, TX
Apriva Scottsdale, AZ
AAdvantage Laundry Systems Garland TX
Rick Volz
Churchill Car Wash San Antonio TX
Ron Wackerman
Midwest Development Systems Lewis Center OH
Andrew Zanes Zanes Financial Fort Worth TX
Advantage
MAKE A SPLASH
BUILDING A MORE PROFITABLE CAR WASH www.ryko.com 800.284.7956
WITH A LOW-COST CAR WASH
A NEW OPPORTUNITY TO MAKE EVERY CUSTOMER COUNT
F
or more than 35 years, Ryko has been guiding new and experienced car wash operators to greater
profitability through leading edge technology solutions and marketing programs that drive customer demand.
Now we are excited to introduce an industry game-changer for lower volume sites, where every opportunity and customer counts. Are you seeking opportunities where a strong return on investment can be realized through the attractive cost and revenue-advancing options of a high wash quality touch-free model?
Ask us how to get your finger on that Pulse.
T OU LD B K A TO GO S A R VE L I S
Ryko Solutions of S. Texas | 20312 Holzwarth Rd. | Spring, TX 77388
47
Southwest Car Wash Association 4600 Spicewood Springs Road Suite 103 Austin, Texas 78759
presorted standard U.S. Postage
Improve cleaning, enhance customer experience, reduce maintenance costs and power usage. – Eliminate inrush on all larger motors – Slow down motors to reduce usage: n Operate motors at the rpm necessary n Set inches of lift for central vacs n Don’t run high pressure pumps at full speed and bypass water • Adjust pressure for specific part of car (example: higher pressure on wheels, lower pressure on painted surfaces) n 3 motor speeds for blowers • 100% for full dry; 70% for convertibles/pickups; 50% idle between cars n Hydraulics run cooler and consume 30% less power – VFD panels over ethernet: n Reduces and simplifies field wiring lowering installation costs n Real-time monitoring of motors n Remotely configure, diagnose and service the variable frequency drives – Tunnel Master® wbc monitoring alerts you of the following: n Low oil in hydraulics n Reclaim has shut down, switching to fresh water n Air compressor stopped n Motor starter protector tripped n Thermal overloads in starter tripped Ask us how ICS technology can help you achieve repeatable quality, a better customer experience, and lower costs at your car wash.
paid
Austin, TX Permit No. 1142