Surviving Today – Thriving Tomorrow
As is the case in an election year even during the worst of times in our history, the economy is showing signs of a recovery even if it is a slow one. Most economists, even those that tend to be pessimistic, would agree that the worst is probably behind us. With this in mind, what should operators be doing to continue to survive in today's market and thrive as the recovery continues to improve?
The reality is that our industry right now is not in good shape as are many other industries. Manufacturers have been forced to cut back on employees, services and field support in an effort to stay open for business. Distributors have scaled back their operations limiting their ability to sell and service equipment by reducing staff, parts and products, equipment inventories and in some cases even hours of operation. Operators have gone to limiting maintenance on the equipment to the bare necessities and repairing only what is essential to keep their washes open. While it is hard to criticize these moves, in many cases they have set the stage for future problems and even failure as we pull out of our current situation.
With this in mind, what should you be doing now to insure survival and prepare for future success?
The first order of business is to make sure your operation is in good shape physically and financially. When is the last time you evaluated all the companies and individuals you are doing business with? I know many have become "friends" or may have helped you out in the past but that does not put money in the bank today. While that may sound heartless and a bit cutthroat it does not make good business sense to fail to evaluate everything you spend money on and your business relationships to make sure you are getting the best bang for your buck.
Could you add new profit centers or products to your current offerings? If you have vending could you add more or possibly change offerings. Are those of you vending cold drinks adding flavored waters or energy drinks? How many vending items are really selling? If you are constantly running out of certain items why not remove a non or slow sellers and put more of the good seller in its place so they will always be available. Is there a need to possibly replace some fragrances with new ones or simply removing them altogether? Could you add a new product or service to the wash without significant expense? Many operators offer the new "super sealants" or add automated tire dressing to their equipment. Some have changed their packages to include more popular services. When is the last time you had a price increase? Customers all realize that the cost of goods has gone up and are not likely to complain if you increase pricing especially those that value your service.
If you currently have a maintenance or service agreement is it really working for you? How often is your equipment serviced and has it performed well or had problems in between service calls? A good preventive maintenance program can pay for itself but do you have one that is truly a good preventative maintenance program? How much are you spending over and above your monthly fee? Have you gotten a quick response when you needed a repair? Do techs have to come back several times to fix the problem due to lack of parts or poor workmanship? Are you getting a discount of additional items like service calls not covered in the agreement, parts or chemicals? The money you save here can be useful in other areas.
When is the last time you had your chemical usage and performance looked at? Are you getting competitive pricing for your chemicals and is your use cost in line with what you feel it should be? Sometimes less expensive chemicals actually cost more than those that may seem expensive. The only way to make sure you are not paying too much is to know your use cost. You should know either how to calculate it yourself or work with your chemical supplier to see how they do it. Are you getting the best performance and coverage possible? Are all the nozzles working as they should? In some cases you can cut back on usage without sacrificing performance by changing the spray pattern and reducing the number of nozzles which cuts back on chemical usage. Spending too much money, not making proper usage of or wasting chemicals is truly putting money down the drain.
This may sound contradictory to what I have just discussed but are you getting the best results possible from your chemicals and equipment? Could you improve performance by purchasing better chemicals or equipment? Poor wash performance is a killer. The best marketing you can do is to consistently produce a quality wash at a competitive price. In a tight economy people want to get the most out of what they spend. Cutting back on your chemicals or not having your equipment in good working shape will not product results that will make customers want to return to your wash.
How about the appearance of your wash? Are all the light fixtures working properly? Is the landscaping well maintained? Are the grounds clean and free from trash and clutter? Are the walls showing signs of wear or simply filthy? Is signage up to date and looking good? Is the appearance of your employees an asset to the business? Are their clothes clean and grooming good? Do they treat the customers well?
The most efficient use of marketing dollars are those invested in on-site marketing. Marketing efforts that encourage frequency produce better results than those aimed at gaining new customers. Your signage should be in the best condition possible. Programs that benefit the customer by returning to your wash or using it exclusively could be offered with signage, informational handouts or brochures or on-site employees. Mass media is normally only effective if it does not involve significant expense and often needs to be repeated for a longer period of time to achieve results. In any event, efficient, well conceived marketing plays an important role in survival.
Thus far I have made many recommendations that will help you survive in today's tight economy. Most of what I have suggested involves little or no additional spending and may even have helped to save some money or pay for itself. Now we need to look at how to prepare for future growth and success right now.
Hopefully you have saved some money for a "rainy" day and decreased current expenditures enough that you can look to investing in the future. By investing I mean spending some or all of it to put you wash in position to excel and operate in peak performance when conditions improve.
How old is your equipment? How much longer do you expect it will last before costing more to operate than it should? What will it take to put it in tip top shape or even replace it? Equipment manufacturers are offering some of the best deals ever. Some have gone to reduce the cost by selling direct. Some have given deeper discounts to their distributors to allow them to offer very competitive pricing. Many have included many extras at no additional cost. If there is any way you swing it now there is no better time to consider new equipment than right now. Ask your local distributors for a quote or contact manufacturers to see what works best for you. There is no cost involved and it could save you thousands.
We have discussed the current condition of your wash and the importance of keeping things in order but how will it look like in a few years. What is the overall condition of your site? Does it need some major repairs? Is the lot full of patches or small holes? Is it in need of replacing or resurfacing it? Is the paint on and in your building peeling or cracking or are bricks or panels just dirty or in bad shape? Some of these repairs you may be able to do yourself or contract at very reasonable cost. Just because things may be a little slow for you don't think everyone one else is not in the same boat. Bidding out this work to qualified companies may get you great work at a very reasonable price. Sometimes when in between jobs or during slow periods contractors will take on work to keep busy. Brush up your negotiating skills to get the best deal.
What marketing and long term planning have you done to build the business? Most of the ideas I have already suggested will help improve your business but do you have a long term marketing and business plan? Where do you want to be in five years? Do you have a marketing plan that will help your business grow? Do you have a marketing calendar outlining promotions and activities for this year? Have you considered a wash club or others methods of preselling washes? Have you anticipated future needs for equipment or site development or improvements? If your volume increases can your present set up handle it? Is there a way to add other businesses like detailing or some form of retail sales? Maybe there will not be a need for any of this but to not prepare for it is very shortsighted and could prevent you from taking advantage of potential growth and profitability with your business.
There is much gloom and doom around today. I heard an joke once that might sum that up. “Cheer up things could be worse so I cheered up and sure enough things got worse.” One thing is for sure, if you do not work at successfully surviving your current situation and make plans for the future you cannot expect to thrive when it comes.