When I first starting working for what I consider a “renowned” local commercial real estate developer, I would come back to him with what I thought were good locations for a few banks and pharmacies that he represented. They would have good traffic counts, sometimes corner locations, and sometimes even had a high density of homes nearby. When we would start discussing the properties that I thought were good, he would ask me what is nearby? Are there any banks, pharmacies, fast food, or any other “shopping” district attributes, initially my answer would always be “no, but it has many other great attributes”! He would reply, “we really do not want to be the ones who create the shopping district, we just want to be in a good location where a shopping district already exists”. With this said, I quickly learned that if a prospective location is not where people shop, eat, bank, or run other errands, then it is too risky. Now, I only look at locations that have 4 to 5 franchise stores nearby creating some type of “shopping district”. If you are considering locations that aren’t in one of these areas I would give you the big thumbs down on the location. I know that in some rare instances, there are very successful retail businesses in remote areas, but this is the exception to rule and is a very risky play. Always find a location (even in a rural area) that has some type of shopping district. Having other retail nearby including shopping centers is up there among the most important factors to consider when evaluating a proposed location. A modern, up-to-date strip center nearby will also be more advantageous than an older shopping center. A nearby shopping center will drive business to your car wash. Offering a wide variety of car wash products, professional detail training, and a comprehensive customer loyalty program to car wash businesses.
Neighborhood Play vs. Regional Play
Now that you know how important a shopping district is to your business let me discuss some other factors about shopping districts. Some shopping districts are what I call “Neighborhood Plays” and others I refer to as “Regional Plays”. The best way to describe this is by describing two communities that are nearby in the east suburbs of Pittsburgh (one that I eventually built my wash in). The “neighborhood” shopping district has the following attributes, a traffic count of 14,000 cars a day, a rather large supermarket chain, a McDonald’s, a Pizza Huts, a local restaurant, a national pharmacy, a large Pittsburgh bank branch, a Dollar General, a Subway, a Exxon gas station (with car wash), a Kinder Care and a few other local family owned businesses. The “regional” shopping district that is also nearby, has a four lane highway with a traffic count of 35,000 cars a day, a large regional mall, a Lowes, a Home Depot, a Target, a Sam’s Club, four large shopping centers, many car dealerships, and pretty much every franchise, bank, pharmacy you can think of. Now, you might automatically think that the regional play is always going to provide a better location and in many cases this is true, but with land cost factors, ease of entry and exit, and a few other factors can sometimes make the regional play less attractive in some instances. A self-serve car wash on a $1,000,000 + piece of land in a regional shopping district is not a “best use” when it comes to commercial real estate development in my estimation. You might wash a bunch of cars but the revenues could probably not support the expense of the land. As mentioned, there are exceptions to any rule but “rolling the dice” on one of these high priced locations would be too risky for me.
Traffic Count
Traffic count on your prospective site is usually one of the major factors for deciding on a good retail location. How can you determine what constitutes a good traffic count though? Is there a magic formula for what amount of traffic will allow you to be successful in the car wash business? Really, there is not a minimum traffic count that will determine your overall success. However, traffic count along with other location factors will be a major factor in your overall success. A good indication of how traffic effects the overall success of location is shown by how many franchise operations will determine where or where they will not allow their retail stores to be located. If you research the real estate requirements of many of these retail operations a specific traffic count minimum will be disclosed. While I was working with a leading a local commercial real estate developer, I learned very quickly that traffic count was always a high priority on every retailers list for obvious reasons. When you contact the real estate department of any major retailer, and send them a prospectus on a location, the traffic count is always prominently displayed up front and personal. In my experience, the minimum benchmark was usually around 20,000 average vehicle count daily traffic before they would consider a location. This does not mean that lower traffic counts will not work. You should however have strong reasons to locate on a road that the traffic count is lower than 20,000 though. Also, keep in mind that traffic count is only one factor in traffic equation. You also need to evaluate speed limits, turning lanes, nearby traffic signals, ease of ingress and egress, etc. We will talk about all of these factors in more depth later in this section. I would rank traffic count as one of the most important factors to choosing a good location. My location currently has an approximate 14,000 traffic count which in many retailers considerations would be a light traffic count. But there are other reasons that still make it perform well that I felt compensated for the light traffic count including being in a good shopping district, a high density of population nearby, little to no competition, good ingress and egress, and a few other factors. However, my location would probably perform much better if it had the 20K+ traffic count. (As a side note, a Walmart is being built about a quarter of a mile away, and this should increase traffic to almost 20k!)
Speed Limit
One of the first things I learned when evaluating locations as a commercial real estate professional was that the speed limit in front of a prospective location was almost as important as the amount of traffic that went by. I would look at a prospective site and say “wow” this location has 30,000 vehicles a day but my mentor would not be as enthusiastic about the prospective location. Many of the sites that I initially thought were enticing were not that great after all because a high speed limit did not allow for easy entry and exit into the prospective location. These locations were on a well traveled highway between good retail shopping locations. The speed limit detracted from prospective customers from being enticed to stop at the location. That does not mean that all higher speed limits should kill a prospective location from being evaluated if it has other positive location indicators going for it. Speed limits that exceed 35 MPH make a location less enticing in many retailers minds, 45 mph while still somewhat acceptable should have other strong factors for moving forward, 55 mph, in my estimation is almost a deal killer in my mind. Slower 25 mph and 35 mph speed limits, in strong shopping district are always the most desirable.
Divided Highways, Turning Lanes, and other road factors.
Much of what you review in choosing a location is common sense. If a vehicle has trouble entering or exiting your proposed location because of current factors or proposed factors it will effect the overall success of your business. If your location is on a busy four lane highway that has median strip or is limited in the ability to turn into the property from either direction you should consider this in your assessment of the property. On a divided highway, I would take the a closer look at the traffic counts as to what the actual traffic counts are on the side of the road you will be located on. If a vehicle needs to do a U turn or some other special maneuver to enter your location, it will negatively effect the overall success of the location. While many of your customers will treat your business as a destination point for cleaning their vehicle, just as many customers will be impulse buyers and if their impulse cannot be easily fulfilled because of road conditions they will lose the impulse. Here are some considerations as to the road conditions:
1. Can traffic turn into my proposed location from either direction? If not, what is the count for the traffic that can easily enter or exit the property.
2. Is there a turning lane that facilitates turning into the location.
3. Is the location on the same side of the road as other anchor type businesses, i.e. grocery store, bank, etc..
4. How many lanes is the road that you will be located on.
5. Is there a traffic light or stop sign nearby
Corner Properties
Corner properties have many advantages for obvious reasons. Mainly that it gains traffics from two roads rather than one. It also makes access much easier. Corner properties on two busy roads are most sought after by many retail businesses. Take a look in any given city and you will see gas stations, pharmacies, banks, fast-food, and other high rent tenants located on the corner. When, I built my wash (not on a corner), there was a location nearby that had a closed gas station on the corner. It was about 2.5 times more expensive than the property I ended up developing and it also needed some remediation work (gas tanks removed, etc). I still kick myself for not purchasing the property. A year later a pharmacy bought the property and two additional properties and now enjoys a wonderful presence on two well traveled highways. Some of the problems with corner properties are that they are usually more expensive and in some cases will not be large enough for ample stacking room for your wash. Do not rule out a corner property because of expense or limited room until you do the proper research. You can do an “assemblage” much like the pharmacy in my area did if the lot is not large enough and combine two properties. Obviously you will need to negotiate terms with two land owners to do an assemblage. Corner properties also offer benefits for multiple ingress and egress to the property.
Traffic Lights
You will see on the site analysis form that we rate a site higher if it is closer to a traffic light. This is because traffic lights are located where there is a lot of traffic and it slows traffic down or stops it in front of your location. You should drive the market during peak car wash hours (in my case it is late afternoon and evenings, Saturday and Sunday from 9AM to 6PM) and analyze the traffic at these times.
Curb Cuts
It is more preferable if your location can allow you to have two curb cuts. One for entering and one for exiting (ingress and egress). The more accessible the location the more traffic you will get to your location.
Property has room for ample parking (stacking room)
Your property must show that you will be able to handle a generous amount of vehicles that use your services. In my part of the country, after a snowfall and thaw, I will have about 20 days a year where my lot is completely full with many of my patrons waiting to use various services. The ability to stack vehicles on these days adds to your ability to generate a larger gross income. I would allow for a minimum of at least 4 cars per automatic bay offering and at least 1 to 2 cars for self serve bays and vacuums. Some local authorities will require some stacking capabilities in lieu of their parking requirements for a car wash.
Visibility
Your ability to be visible and to be identified out of a large cluster of retail business is important. I have first-hand knowledge on how this can effect the overall performance of a location. I have one location that is highly visible and one that blends in with the retail surroundings. The visible location outperforms the non-visible location by 4 or 5 times. While other factors are also involved in the overall performance, it is obvious that your visibility contributes greatly to the overall success of your car wash. Ideally the property will have visibility from both directions of the road you are located on and will allow you to segregate you from other businesses in the area. Visibility of your signage as well as your structure is ideal. Preferably, your location will provide a line of site 500 ft in either direction while traveling on the road in front of your business.
Building can be built parallel to street vs. perpendicular
I learned very early in the development process that it was important to situate the building on the property parallel to the street vs. perpendicular to the street. The additional presence that this gives your business gives you an additional advantage in being noticed. The first wash I developed had land that was more prone to placing the building perpendicular to the road. The flow of the wash and the stacking probably would have made more sense this way. I decided against it because it would not give me the same presence in the retail community that I am now enjoying. Since learning this I have noticed a number of washes that were built perpendicular to the street. They do not have near the presence that I have. This is a very common practice for most retail shopping centers as well.
No parking allowed in front of building
Some communities will not allow you to park or stack cars in front of your building. This can create problems in the overall site lay-out and detracts from the overall effectiveness of the site. In my site evaluation form we take points away from the overall site rating because of this. One of the washes that I built, the cars enter from the street and drive around to the back of the building to enter the bays. The vacuums are located in front of the building that make for a nice presence with their bright, colorful canopies. The second wash I built had restrictions on where vehicles could enter and exit the property making access to the property much more restrictive. I feel that his ease of entrance and exit is somewhat detrimental to the overall success of the wash.
Lot uphill or downhill from street
If the proposed site is located at a different elevation than the line of site from the street you are located on it could effect the performance of the location. My first wash had a slight downhill topography requiring that the lot be cut and filled about 10 feet below the road surface. While I do not think this had too much of a negative effect on the performance of the location, I feel that if it was much lower it would have detracted from the visibility for prospective patrons. This same effect will occur if the elevation of your proposed location is much higher than ten feet above the road surface. There is local supermarket that is about thirty to forty feet above the heavily traveled street it is located on. I feel that it is a horrible location. Unless you know that it is up there, you would never see it. You must consider this if your location has a topography that creates challenges.
Located at middle or beginning/end of market
Your location within a market can also determine it’s effectiveness. If the traffic patterns in a market put you at the “end” of a retail market with most of the traffic entering and exiting from the other side of the market, it can detract from your performance. You should be aware of this as a factor. In growing markets, you can sometimes buy property at the end of a market and retail can continue to emerge around you. Properties in the middle of a market are usually more desirable.
Competition
When analyzing a property competition is a major concern in the car wash business. You must be able to truly analyze the property advantages along with your competition. You might have a perfect location but if the competition will be fierce because of what they are offering, you might want to rethink the decision to locate there. If a new competitor came close to me I would take great strides to make sure they failed. In my estimation, a new competitor who located within a mile of me would, at best only take 50% of my business. That means that the new owner would only enjoy 50% of what he might have received if he located near an older less formidable competitor or where there was no formidable competitors.
Community population (“Roof Tops”)
How densely populated the area around your proposed location will dictate your potential market. The immediate 2 to 3 mile radius would be most important if you are located in the city or suburbs. This radius can expand if you are in a rural area. It makes sense, the larger the market, the more likely you are to get customers in.
Community growth
Community growth should be taken into consideration when choosing your location. I have first hand experience with this topic. My first location is in a stable to declining area. While the location performs well, it is much harder to “grow” the sales due to the declining population in the area. The second wash I built was in a thriving, growing area of Pittsburgh. While the location did not have as many positive attributes as my first location, it continued to grow year after year because the community around it was continuing to grow in population. I would always prefer to locate in a growing area vs. a stable or declining area.
Apartments nearby
Apartment buildings and rentals are good for car washing. The inability of renters to “bucket” wash their cars in the driveway will push them to your car wash. Look at this demographic closely as a positive factor for a proposed location.
Small single family housing
A good density of single family housing is helpful in the car wash market. If the homes within your market area have on street parking with limited use of driveways and garages it will also be advantageous to your car wash business.
Upper, middle, lower income area
I have experience in both lower middle income markets and upper income areas. The first wash I built is in a lower middle class market area it performs well because of some of the other market factors that the location offers. The second wash I built is in a upper middle income to upper income area, and my belief is that it performs well because there is more disposable income for prospective customers to wash their cars. Some of the other market factors are not as advantageous at my second wash, but it has similar results because people have more money to spend in this market.
Easy road access from homes to proposed site
If the location you are looking at has a densely populated demographic, make sure that the location also has easy access for the population to get to your location. If there are obstacles for the population to travel to your wash it will be less desirable. A good example of this is a wash in the Pittsburgh area that seems to have everything going for it except that it is not easy to get to. Even though it can be seen from the road and it is in a good shopping district, there is long road that wraps behind some other businesses to finally get to the property. There are other geographical features of a location that might be adverse, including rivers, mountains, bridges, etc.. You should question these obstacles before you make any development decisions.
Total acreage
The total acreage available for your development can limit your business. In my estimation you need at least 1 acre to build any sizable, modern car wash. Smaller parcels will work if you are just going to build one or two automatic bays. Keep in mind that you need to look at the “useable” acreage based on the proposed location’s topography. If a lot is too small do not rule it out right away. You can propose buying the adjoining properties to do what they call an assemblage in commercial real estate. Much of this will be determined by the proposed structure you want to build. The size of the structure should be determined by the potential market.
While no location can achieve everything mentioned here, It should be your goal to evaluate your property on meeting as many of the criteria as possible.
Scott “Buzz” Glover has written what some call the most comprehensive book on getting started in the Car Wash Business. It is available on Amazon and also available at http://www.carwashbusiness101.com You can also read Buzzie’s blog on line as well. Happy Car Washing!