Using the Right Site Selection Tool to Mitigate Car Investment Risk

January 18, 2023

While car washing can be a great investment, it comes with risks just like any other business venture. Perhaps the biggest risk is the car wash’s physical location. A site’s location can predict around 80% of its future performance, according to SUDS™, DRB®’s analytics and marketing solution. That leaves just 20% to things like operations, marketing and customer experience.

Once that shovel hits the dirt, it’s too late to be wrong. That’s why many new investors turn to site selection tools to help them make this critical decision. There is no shortage of tools to choose from, so how do you select the right one?

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Car Wash Site Selection Myth Busters

To answer that question, you must first understand what does – and what does not – determine the success of a site. Surprisingly, some of the most commonly held beliefs about what makes a good site are unfounded.

Myth 1: Don’t Consider a Site Unless the Daily Car Count is Over 30,000

You might be surprised to learn that car count has almost zero predictive value on the performance of a site. It doesn’t matter if 30,000, or 35,000 or 40,000 vehicles go by a site daily. You have to combine that number with several other factors to determine if that number is good or bad for any given location.

Myth 2: The Site Must Be Surrounded by a Growing Residential Population

Many operators won’t even consider a stable population, let alone a declining one. However, SUDS™ has found that the status of the population only predicts about 20% of a site’s performance overall.

Myth 3: The Site Must Have No Other Car Washes Nearby

Suds has seen operators turn away from a site just because it’s .75 miles away from another car wash. But it’s not about proximity or even the quantity of competitors. SUDS has found that understanding consumers’ driving behaviors is critical. Two washes in close proximity may actually be pulling traffic from completely different geographic areas. The competitor’s business model is also important – an express exterior and an in-bay automatic will largely serve different customers.

What REALLY Matters

Unfortunately, most car wash site selection tools in the industry rely on metrics like those above for their analysis. These tools were primarily created to help investors get bank financing, so they are driven by assumptions and designed to provide assurance rather than accuracy. They often don’t show the whole picture of a site’s potential performance.

What you need is a sophisticated tool that takes into account factors that have proven to have the most influence on a car wash site’s performance, including:

  • Proximity to High-Frequency Retail – These are places where drivers are going several times a week, such as grocery stores.
  • Traffic Patterns – While simply counting cars won’t tell you a lot, there is data behind the traffic that passes a site that can be predictive. You want to be where people are going, not necessarily where they live. You want to be on the list of places they stop when they are running errands or commuting home at night.
  • Driver Demographics – Again, we’re not necessarily concerned with whether the residential population is increasing or decreasing. Rather we need to look at the demographics related to the traffic we are seeing. What is the age of these drivers? What is their income? These can help predict if these drivers are likely to use your wash and what pricing strategies may or may not work.
  • Visibility – It’s not enough to just have a car wash location that is front and center on a busy road. The type of road can also make a difference. If it’s a limited-access highway with a 55-mile-per-hour speed limit, you’ll need large, flashy signs to catch people’s attention. You will likely be more successful on a road that has a 25 or 35-mile-per-hour speed limit.
  • Ingress/Egress – How easy it is to enter and exit the site? If a road has a median that prevents an easy turn onto the site, that can be a problem. Likewise, if there is heavy traffic preventing a smooth and safe exit, that can also be an issue.

SiteSelect Car Wash Site Analysis Tool

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SUDS offers such a tool. SiteSelect, SUDS’ location analysis and forecasting tool, leverages over 300,000 industry-specific data points to understand the viability of a location and help you make the best investment decision possible. It projects two of the most important metrics to consider when making an investment decision:

  • Projected annual revenue at site maturity
  • Projected member count at site maturity

You’ll also get a full report containing additional analytics about the site to better understand the evaluation. With this analysis, there is no guesswork, and you can go into an investment understanding the potential of your site.

Get It Right

You only get one chance to select the right car wash site. SiteSelect can help ensure you make the right choice. To learn more, request a SUDS consultation.

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