Purchasing a Car Wash Business
Are you considering purchasing a car wash business? Perhaps you have an opportunity available to you, but you are unsure whether it is the best option. If you want to know if the car wash business is being sold at the best value and whether you can earn the documented revenue the company has made in the past, you are in the right place.
Car wash businesses on the whole can be very lucrative. A successful car wash has an excellent strategy to generate great revenue and they can be operated without complete involvement by the owner. In other words you can set up a staff to take care of the business while you gain profits. The car wash business always has a great resale market.
Value is a little more difficult to discuss than whether the car wash business is something you want to invest in. Value will depend on annual revenue based on a multiple of two times annual sales. You have to actually look at the books to really examine the revenue stream made in the past and what you might be able to generate in the future.
Most car wash businesses will offer profit in the 30 to 35 percent range of the revenue. Full service car wash facilities are also sold as real estate. The equipment and an allowance for capital expenditures must be considered in this time of sale. If there is no real estate with the business then you will see that the owner benefit is less an allowance for capital expenditures. In will be a little less expensive.
A seller may try to tell you there are more sales and profit in the company than is documented. Since they want to sell the business the owner may try to pad the information. You will not want to make a deal unless the owner can prove what they are telling you. If they are unwilling to show you the books or you cannot find documented fact about the past revenue it is best to stay clear of the car wash business opportunity and find another. The utility bills at a car wash can also be a good indication of the amount of sales they have. It is not the best method, but you can look to see how much the bills are on average and look to see if the usage has increased.
You will definitely want to do your research before you commit to a car wash business. Find out if the property is leased or owned. Check on the long term history, and decide if you will keep the employees. One troubling aspect of some businesses is that the employees may not all be legal depending on how the owner ran the company. You will want to look at the equipment to make sure it has a useful amount of life left, the additional services offered, and if there is a potential of competition that will hurt your sales once you buy the car wash company.
