Last good year---2003!

[scout]

2003 was the year gas prices went over $2 a gallon. 2003 was the last year we made real money. Since then we have been down 30% steady. Last winter was a real winter, not that planet warming kind, and we did good. Then gas went to $3.50 this spring and it was a ghost town.
My feeling is that me and everyone else has determined that the car/truck we love is actually a huge black hole in our expensive American lifestyle-. I will stop and get my starbucks every day, and save by not washing the car--something has to go-. Have a nice day!

[Waxman]

First of all, all capitals is like shouting the whole post. Second, all businesses have ups and downs and are in one way or another affected by the economy. Instead of complaining about it, why not put your energy into turning things around? There are many possibilities for this!

And by the way, I make Maxwell House coffee at home every morning and enjoy it from a travel mug and I just bought the newest car I've ever owned; a 2000 Honda, which I love:D!

[guywashingcars]

Amen to that. I've been forced to invest in a prepless wash process to get my labor costs down. Had to do it with declining gross and no help. Due for a vacation but I can't afford it because all my money is invested in the prepless equipment. Firmly believe that the American love affair with the motorized vehicle is on the rocks.

[asalsy]

After 2003, the company I work for has bought three washes and increased profits. Simple as that! We work harder than the previous owners did. Simple as that!

Waxman, We will just work hard, stay positive and seek the rewards for our efforts. Instead of complaining:)

[Waxman]

Amen to that! I work hard every day at my car wash and detail shop; I keep service and value high. I understand full well the challenges that face many businesses today and I greet them with as little fear and as much positivity as I can manage. Period.

For those who only complain about car washing, maybe it's time to try something else. For me, the thought of sitting in an office or taking orders from a boss keeps me grounded and moving forward within my chosen field; car washing and detailing.

[Jim Caudill]

Waxman, my gut instinct tells me you haven't been in this business all that long (forgive me if I'm wrong). The idea that simply "doing a good job" or even being "the best in town" means that you will have a successful and profitable business just doesn't hold water. I'm glad that your region of Massachusetts is still doing well economically. It is possible to have 100% of the car wash customers and still not have a viable business! People don't have to wash their cars, it is highly discretionary. When times turn tough, people make choices about where to spend their diminishing dollar. Ohio has LOST 158,000 net jobs since 2001. Although that may not sound like much, there are many thousands of jobs that must be created every year to absorb new folks entering the work force. So, not only have we not created new jobs for all those high school and college graduates, we have actually gone backwards. I could go on, but I won't. Actually, I will, but not about this specific area. See the following post, I typed it all, but it was too long (2,000 characters max)

[Jim Caudill]

The Sept issue of PC&D in an article about "Save the IBA" on page 72 refers to the years from 1993-2001 as the "Golden Age" of IBA's. I remember posting about 6 years ago how the whole IBA thing looked like a "house of cards". I didn't think most operators were truly getting the whole picture on the true cost of providing an auto wash. I also said that I wonder how many operators would replace their wash when the one they had degenerated into a heap of rust and corrosion. Later on in the same article, the author looks at the state of Georgia and writes "of the 1,000 IBA automatics which are now in the field, only about 700 of these will be replaced in the future." Think of that, 30% of newly installed IBA's do not economically justify their replacement. Chance are, they didn't justify their initial installation either.

Lastly, the article states that the last five years have been lean (see "lessons learned" page 74) with washes that once grossed $6,000 to $8,000 per month struggling to reach $3,000 to $4,000 per month. How much do you think gas will be selling for next year? Do you think it will be more or less? Do you think real wages will increase or decrease? Some of this is a glass "half full" or "half empty" for sure; but, you also had better temper your unbridled optimism with a little cautiousness. If you are doing well, congratulations! Just keep your head low, keep on doing the best you can, and hope that what is happening in Ohio and other parts of the country doesn't repeat itself in your neighborhood.

The downturn that I have been seeing is shared by all the other operators that I have contact with in my area and is confirmed by some of my suppliers. What I think we are ALL trying to do is figure out some way of attracting customers back into the washing program, but it is tough to get them to spend $ on washes when they still want to eat out, or buy gas to get to work.

[Ben's Car Wash]

Jim,

Save your time, many just won't believe your FACTS. A co-worker of mine recently returned from Ohio.... she said nearly whole neighborhood were boarded up... a ghost town of sorts.

A headline article on AOL yesterday about the NURSING SHORTAGE (I know your wife is a nurse) said that this shortage will continue to get worse, yet SALARIES ONLY ROSE 1.3% last year for Nurses..... 3% or more BELOW THE INFLATION RATE! That equals a net loss of income NATIONALLY in a SHORTAGE of skill persons...... a fatal trend!

Today I got my letter from my Hospital that I work at. I'm been a critical care nurse for 22 years now..... I got a 25 cent raise! My hourly salary is $31.50 (I have a special area of knowledge in the Cardiac Cath lab). Yet that "raise" only represents a 0.8% increase in my salary! Now I'm extremely thankful for my profession that I chose to work in.... I have assured job security, but at that rate of "raises" I'll have to quit in a few years and rehire again at a new pay scale just increase my salary (most of your won't understand this... but we cap out at a lower rate then "new grads" who come into the market).

[Ben's Car Wash]

Cont.



This trend encompasses all professions and "blue collar" jobs. Real wages are down NATIONALLY. Foreclosures are now the largest in US HISTORY NATIONALLY. And more business are competing for that same "discreationary dollar", business that are much better at marketing for that $! Like that STARBUCKS chain, walmart, BEST BUYS... all spend millions just to figure out what triggers spending not on what is necessary.... but what is impulse. Bud Abraham alway posted about advertising or "what bring customers into a car wash". His answer is always the same "84% said they happen to drive by" which means its IMPULSE DRIVEN. Multinational corporations hold the key to IMPULSE BUYING and market speciifically to that. When discreationary spending DECREASES because a NET LOSS OF INCOME (record high personal debt) we as CAR WASHERS are at a severe disadvantage to compete for those decreasing dollars.

Real wages have to rise. Monday (LABOR DAY) a report of American income came out...... look it up. The Average CEO make 364% MORE that the average American Worker! I'm not sugesting SOCIALISM... I'm sugesting that American begin to care about eachother enough to define what is socially good for us.

[Ben's Car Wash]

cont.



A story about gun powder: Over 1000 years befor the invention of guns, the Japeneese (borrowed from China) made a bulistic weapon... basically a rifle. They saw no benifit to their "culture" for this weapon becasue for centuries swords became there main weapon.... as a symbol of the values.

When our "values" embrase RAP artist, Sports figures, movie stars and corporate excutives as more worthy of capital advance then nurses, doctors or teachers.... we've disguarded or "cultural values" of what is important... that emphesis being on a "super star" instead of the ordnary guy next door. This is not "wealth distribution" that I am speaking of (so please don't go there), but of realizing that no one person should make an obsene amout of money, while others are scraping the bottom. This is cultural as it was for Greek to accept pediphelia, Jericho resident to practice infanticide (burried fetuses in the lental of their door) or Oriental woman to wrap their feet. Super stars and CEO's do not offer the SOCIETY a benifit 354% higher than you, your wife or your neighbor.

That is my opinion. That is why Ohio is suffering. Compassion has been removed for profit in the obsene. Hell the Adult movie business is like the largest, most profitable business in the US... if not the World! Maybe you should just tear down the car wash and build an Adult video store!

I all seriousness.... good luck. My area is reporting a 50% decline in the past 2 years. Yet I'm holding my own. So far I'm up about 15% (without adding the self service) in gross $ but my car count is down slightly (about 2% YTD stems from last November 2006 - February 2007 as a decline was noted). Housing is very slow now but Commerical building is strong. Tampa is still a growth area even with housing flat.

Ohio need serious leadership now. I hear that over 10% of the housing is for sale in Ohio. Is that true?

[Greg Pack]

Jim there can be life after recession. Birmingham was a big steel town until the late 70's. I was a teenager but I remember major shutdowns of the plants, all related support industries, and super high unemployment rates. One local town had a 30% unemployment rate for a while. Over the past couple of decades, the focus has shifted to healthcare and financial services. I won't get into mfg vs. service economy but it seems everyone who wants a job has one in my area. Unemployment is low. Some of the old industrial communities suffered from white flight and have still floundered around, but overall the metro area seems pretty healthy.

Although my business is picking up, I've grown cautious lately. I think the big wildcards are gasoline prices and the middle east. And I don't think either political party has the answers. I really have the urge to pay down all my business debt as quickly as possible. When you're debt-free, there aren't too many storms you can't weather.

[Red Baron]

Not to get off topic, but we solved our expensive Starbucks habit buy buying a $200 Gaggia espresso machine. We figure it paid for itself in about 2 months, including fuel costs.

[pitzerwm]

Well said Greg, in the early 80's right after I had bought my wash, paying 50% more than I should have. They shut down 4 nuke plant construction projects, we lost probably 30K jobs, over a period of years 100K people left. Many of the smart people in town went BK, some of them my friends. Lucky, I survived with some blood loss, We had never had an economic slowdown here because of the nuke stuff, so a lot of people had no clue how to deal with it. They were sure that it would correct in 2 years, I figured 5 years but it took 7 years. Building lots that had cost $30K were $3K, do you think that I could bring myself to buy some, no way, I was as freaked as the rest of them.

Greg, is totally right, the less your debt service, the safer you are no matter what happens.

[Waxman]

Listen, Guys. I am a new car wash owner, but I have had a free standing detail shop for 12 + years. You wanna talk about a challenging business? Try detailing for your sole source of income.

I know times are tough in some regions and economic forecasts are bleak. My point is that I do not focus my thoughts on that stuff and instead look at positives. That's just me and if it seems like I'm very 'green' in this industry when I talk like this, so be it. I'll be the green one, no problem.

There are choices in life; every day we make a choice with what to do, what not to do, what to think about, and what to let go of. It doesn't change the fact that what we think about is what expands, so when you talk about scarcity, you get more of it. Think about all you need and the universe sends more need your way. Likewise, count your blessings, be in a state of gratitude, do what you love to do, serve others, and let success chase after you, as it most assuredly will. The glass must be half full to be half empty!;)

[JK Xpress]

Stop w/ the doom and gloom.

The inflation rate is no where near 4.3% as posted by another member.

Per post from another member (nurse raise of 1.3% + claim that it lags inflation by 3.0%) = 4.3%

According to the US Department of Labor (release date = 8/15/07), the Rate of Inflation is 2.36% (CPI-U 1982-84).

Things are not great w/ the US Economy but we are not near a recession either.

As far as the price per gallon of gas, I am trying to find what a gallon cost back in 1973-74 when the US Economy was challenged w/ a recession and an oil embargo. I am somewhat confident that if one indexed 1973-74 gas for inflation, we would discover that gas is cheaper today.

Does anyone remember what a gallon of gas cost in 1973-74?

I'll run the numbers and post back.

[pitzerwm]

Bottom line is that if you think the sky is falling or you don't think that the sky is falling, you are right.

JK, you are right adjusted for inflation, gas is still cheaper. When gas was .35 in the 60s, I made less than $2 an hour.

Old but a good reminder: http://www.harveymackay.com/columns/column_this_week.cfm

[Ben's Car Wash]

Ok, if by that same report that says inflation is 2.3% and wage earning actually fell for men -1.6% and woman -1.3 %1n 2006 whats the differance? the net loss is still near 4% of earnings adjusted for inflation!

We have regional issues... same for years. Yes my family lost income in the 70's when carpet mills/textile headed South. But the US had a manufacturaing base.... that has been off shored now or illegal labor is bening used to further reduce expense. Yet again CEO wages and corporate profits are at an all time high (in many sectors).

Some areas will take a long time to recover... some might never (New England has little industry compare to what it had in the 1940's -1960's).

Florida did benifit over the past 5-6 years, IMO because of it's governor relations with other political leaders. Yet our growth is lacking behind Arizona's in new residents. That's what I mean about leadership, what Ohio needs is a draw to business that will increase income and stop the bleeding of more jobs.

Reguardless, real wages are down 5 years in a row NATIONALLY. Debt is at an all time high. Where is the discreationary spending coming from?

[scout]

The problem to solve is systemic. High gas prices have moved the feelings and emotions people have for their cars. Their exists now a disconnect from the car as a source of pride and joy, to a tool or appliance that does the same duty as before, except the joy is removed.The utter dismay of long term high gas prices, has been transferred to the item that consumes our cash.
The problem is not just our washes--we are market share leaders. Our regular customers are rare now. If you had told me that carwashing would actually go down by 25-30+% in 2003,for 2004,-2007, What reason would I say that would propel this theory?
The objective facts are their for all to see-

[Washmee]

The problem to solve is systemic. High gas prices have moved the feelings and emotions people have for their cars. Their exists now a disconnect from the car as a source of pride and joy, to a tool or appliance that does the same duty as before, except the joy is removed.The utter dismay of long term high gas prices, has been transferred to the item that consumes our cash.
The problem is not just our washes--we are market share leaders. Our regular customers are rare now. If you had told me that carwashing would actually go down by 25-30+% in 2003,for 2004,-2007, What reason would I say that would propel this theory?
The objective facts are their for all to see-

I agree Scout, people hate their car now. Every time they have to fill up the tank it causes them pain. No love= No wash

[BillClinton]

At the risk of sounding like an optimist, you should look on the other side. If people hate their cars right now because of gas prices, then as hybrids and eventually plug-in cars become common, they will be spending less on fuel and love their cars even more than ever. (I recognize this may be a few years away.)

[Ben's Car Wash]

markets have cycles, recessions & depressions don't last forever. And even good stable business and industry cease to exist (Ice houses, milk men). If we truely believe in a free market, then the market will choose who survives.... those who adapt and change make it (durring WWII GM switched to making aircraft).

Are the structures of our FED working... I think they are. But some policy, that refocuses or unfairly motivate others, has effected our industry:

1. Cheap labor available in immigrant (legal or illegal) increasing our NET
2. DEP, EPA standards
3. CLEAN WATER ACT

These are example that policy effect industry. Yesterday thousands of truck drivers voiced their concern that MEXICAN truckers now can use our roads. They blame NAFTA and say that Mexican truckers work for half the wages (25 cents a mile over 45 cents). This is how policy acts on free markets.

[ted mcmeekin]

I just read an article about best states in which to retire . It rated Pa. and Wi very high because of the retirement tax advantages they now offer. They are taking some innovative steps to lure some back without taxing them to death (eg no tax on SS and no estate tax)--then they have the advantage of all that retirement spending to help the economy. They are no sitting back and watch the "no income tax" states continue to erode their economy. Tax breaks always impove the economy.

Ted

[Waxman]

I'm just going by my own feelings, but BOY OH BOY do I love a clean car! It just makes me feel better. When I'm inside my nice, clean Honda CR-V, with vacuumed floors and crystal clear windows and the inside is organized and neat, my world is a better place. I'm certain other people feel the same way as I do. A clean car is a sanctuary!:D

[Red Baron]

I would guess that 75% of my customers are blue collar, with a high percentage of them being near the poverty level. My business hasn't slowed a bit, not counting the effects of the wet spring we had. It bounced right back when it dried out.

I'm spending more than I should on marketing - around 6% - but maybe that's the reason we're not down.

I think it makes a difference to make yours a fun place to be. Things going on all the time. Last week we did our 3rd annual "Token Hunt," which always drives a lot of eyeballs to my website, where I can educate them and tell them about new things going on. My clues are still up at: www.redbaroncarwash.com

Twenty eight years ago when my dad was teaching me to sell roofs, he taught me that differentiation is critical. If your business looks just like the other guy's, price becomes more important than it needs to be. I think some of that works with car washes, too.

[Waxman]

I like your ideas, Red Baron. I'll look at your clues for the token hunt later today!

[MEP001]

It's been over a year since I've seen three cars deep waiting for bays. Our general economy has been stable, and I'd have trouble blaming anything but high gas prices. Hopefully when they remain at the $3-ish level for a while people will become accustomed to it and things will pick back up.

[Red Baron]

I like your ideas, Red Baron. I'll look at your clues for the token hunt later today!

Well you may need to wait 12 hours!!! With no notice whatesoever, my domain name expired. Renewed this morning but will take up to 12 hours to reactivate. I chewed out the guy at Register.com about it. I told him, sheesh, you guys send me 15 spams a week promoting something or other, you'd think a high tech company like yours could send me an e-mail letting me know my domain is about to expire.

[Ben's Car Wash]

http://www.washingtonmonthly.com/archives/individual/2005_05/006282.php

{snip}

"Under Democratic presidents, every income class did well but the poorest did best. The bottom 20% had average pretax income growth of 2.63% per year while the top 5% showed pretax income growth of 2.11% per year.

Republicans were polar opposites. Not only was their overall performance worse than Democrats, but it was wildly tilted toward the well off. The bottom 20% saw pretax income growth of only .6% per year while the top 5% enjoyed pretax income growth of 2.09% per year. (What's more, the trendline is pretty clear: if the chart were extended to show the really rich ? the top 1% and the top .1% ? the Republican growth numbers for them would be higher than the Democratic numbers.)"

"In other words, Republican presidents produce poor economic performance because they're obsessed with helping the well off. Their focus is on the wealthiest 5%, and the numbers show it. At least 95% of the country does better under Democrats."

[Ben's Car Wash]

I would also like to point out todays JOB NUMBERS. A loss of 4000 last month when an expected 157,000 gain was projected...... not sound economic news. May, June and July's numbers were aslo revised DOWN 84,000 jobs.

[rph9168]

New Forum, same old political bullsh#*.

[Ben's Car Wash]

Well RPH,

Ted pointed out the thing about "tax cuts good for the economy".... a certian view of a certian political party that is not factual. And this thread is about the economic impact of the past 4 years on Jim's car wash and the net loss from 2003 - 2007.

I never bashed Bush on this thread, however when "tax cuts" are mentioned as an economic stimulus.... I want the facts posted about this recovery were are in, or this greater, never been better boon!

It just doesn't add up.... all sectors of car washes are trending down (except in high growth areas). Self service have trended down now for 5 years, Full service for the past 2-3 years. Yet we "top income earners", those of us making over $150,000 who own business are seeing a decline in our businesses because of "tax cuts" stimulating our great economy?

Quick, some one tell Jim C just how fantastic those tax cut were for him before I puke!

Clinton (who I never voted for) had the largest economic expantion in US history... 112 months. A gain of 22 million jobs in eight years. Unemployement hit a record low of 4%. A decrease in poverty from 15% to 11%. A buget surplus of $240 Billion.

Bush, now into the 6th year of "recovery" and expantion is creating jobs at half that of the 1990's. Earnings are down to 2% from Clinton's 4%. And our budjet is now in a $200 Billion deficet. Poverty has risen almost 20% in 6 years from 11% to 13% as of late 2006. We have the largest government in history!

But that has nothing to do with Jim's car wash losses from 2003 - 2006. I wonder what Jim's numbers were in the 1990's?

[asalsy]

Like waxman, I am new to this buisness (3yrs) Im not saying that its easy or anything like that. Just that staying positive, working hard is very important. If you are personly upset or unsure about what you do, then you will not be able to stop subconciously sp? displaying that to your employees, customers ect. Just human nature. Not politics

[Eric H]

"Lord, give me the power to change the things I can and accept the things I cannot, and the knowledge to know the difference" (sorry, I can't remember this quote correctly)


I cannot change the price of gas/oil.
I cannot control tax rates.
I cannot control what my competition does.

I can control my use of gas/oil by being more efficient.
I can control my costs by shopping around and buying in bulk.
I must be the cleanest car wash in town.

I've been able to maintain net in spite of decreasing gross. I do need to work harder to do this, but it is what I need to do to survive.

[Ben's Car Wash]

The Serenity Prayer
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
Living one day at a time;
Enjoying one moment at a time;
Accepting hardships as the pathway to peace;
Taking, as He did, this sinful world
as it is, not as I would have it;
Trusting that He will make all things right
if I surrender to His Will;
That I may be reasonably happy in this life
and supremely happy with Him
Forever in the next.
Amen.

--Reinhold Niebuhr

[scout]

Just as we are looking out from limited point of view-it is very possible and probable that events will cycle back. Their is a silver lining for gas prices in that 2008 may see a slowdown in gas use due to demand being reduced from high cost,ethanol production,and hybred,s. All we need for gas to go down is a trend to begin,then the trader,s will start betting on lower cost,s. Right now it it a sure bet that fuel will stay high. We need the argument and sentiment to be stronger for lower gas price,s.
As for doing my part to change the driver,s mind about their car, we are trying to make them feel guilty-----our sign today say,s " do you really love your car?" "day in day out your ride takes care of you!"
The current mercedes commercials do this by showing how their owners love this car---

[Waxman]

I like Eric's and Doug's posts alot. This is the way I try and live and it has worked for me! Also, 'The Power of Intention" by Wayne Dyer was absolutely instrumental in taking my car wash plans from stalled to actualized. May sound hokey to some, but never the less true. Check it out!

That said, I think those of us on this forum who spend the most time at our washes, doing the work and talking to the customers and chem. suppliers ourselves, stand the best chance of reducing costs, keeping a nice wash and maintaining/growing our businesses.

Sure, alot of my optimism is cause I'm a new operator, but believe me, enough negative experiences have occurred since opening to make me jaded, disillusioned and burned out! And I'm not.

[Red Baron]

Waxman, that's not hokey at all. When I started my sales career 28 years ago, my dad got me some Zig Ziglar tapes and put me through the Dale Carnegie course (6 times). Some of that stuff seems hokey now, but it taught me that salesmanship is involved in just about everything we do. Or, it can be.

We've had an extremely wet spring and summer and it hurt our numbers, but I never saw a situation made better by being negative about it. On the contrary, my experience is that people/customers migrate to where the excitement is - where it looks like things are happening. I never saw anyone do business with a guy because he said business is really slow.

[Waxman]

Yep, absolutely agree. To that end, I'm holding a food drive at my wash this month, in conjunction with the local food pantry. The need is there. I support the community that supports me. My customers literally feed my family and pay my mortgage, so any chance I get to step up and help is my duty. I take this very seriously and feel that by being the place that has the highest level of commitment to the local population can is central to my company's mission. The side benefits are enormous and have a 'ripple effect' that last long after the event takes place. I do it for the community and absolutely enjoy reaping the tremendous payback I get.

[Jim Caudill]

I thought it was appropriate to bring this back to the top. It is kind of interesting to look at what folks were saying 10 months or so ago. Also thought it would be easier for "dusovt" to find it, after his posting about "after the thrill is gone" in the IBA forum.

[Chiefs]

What does your prepless wash process consist of?

[Tom Thumb]

After 30 years of sales I have found this to be true and it has been good for me.

If you always do what you have always done , you will always have what you have.

I have never seen a problem , that did not create an opportunity.

[Chiefs]

So how many of you sent you last tax rebate check back to the government and told them to apply it to the budget deficit? If you're for even high gas prices and don't think you pay enough in taxes either personally or at your business, then by all means vote democrat - er uh socialist.

[Patrick H. Crowe]

Dear Scout:

Of course you are generally right about 2003 being the last good year for many areas. Dah??????? It is mostly true of those fools who bought washes without knowing, in exact detail, what they were worth and how to determine that. The BS of "I'll make it work" or "Buy it and they will come" is now being proven to be a craven hoax - - - as many of us knew all along.

Now, opportunity KNOCKS - - LOUDLY. Once a person knows what washes are REALLY worth then the slow economy offers chances galore to buy right and make money. Many, many washes are on the market and at least in this area, not selling. The current owners base the asking price on what they paid 2, 3, 4, years ago. Totally meaningless.

Once they go back to the bankers who also knew almost nothing about real fair market value for wshes them step in and buy. It takes due dilligence but when stocks are up, go long; down, go short. Forget abou bitc----- about the market. Instead answer the call of opportunity.

Patrick H. Crowe

[mac]

I can't believe I'm saying this, but Patrick, you hit the nail on the head. I just wish you had not told the others about it. Where I'm at there are a lot of washes that banks will own by the end of the year. There is even some poetic justice in it. Two of the people I suspect will get out are owners that I told not to buy automatics. Knew they were in places that would never show a profit.

[Patrick H. Crowe]

Mac:

Amen. amen, amen!

Patrick H. Crowe