World is changing
Good Morning Everyone,
I hope that you all had a good Christmas and New Year.
I have been involved in the hand valeting industry for the past 18 years and have enjoyed this time in the business. I have tried very hard within the business to add my knowledge and experience to the industry and I can see that the industry has been rapidly changing over the past two years.
I am very sure that everyone involved within the valeting industry already understands these changes and as car wash owners we have to accept these changes and adapt to this evolving industry.
Most of the changes cannot be revised and the sooner we understand these changes then the easier this will be for our future.
In order to have a successful business, a profit must be made and running a car valeting business at this present time is really hard work. Why?
• As with all customer serving roles, unfortunately not everyone will be pleased with the service provided.
• Whilst as a whole, most customers are very polite and welcoming to car wash staff, there are others who can be extremely rude.
• Claims of damages to cars after valets
• Customers unsatisfied with the end result and refusal of payment due to things being missed.
• Staff issues, high turnover and employees not continuing with the job as it isn’t a career, typically a first job until something better comes along
• Other issues with staff and lack of respect, complaints of working outside, although this is the nature of the business.
Keeping track of a business isn’t straight forward. As business owners we have to ensure we are abiding by ever changing rules and regulations. The more successful the business, the more challenges are faced.
• Local Authorities ie. Planning permissions for car wash sites, noise, access issues.
• Health and Safety (Always ensure your business has public and employer liability cover)
• Water companies. Having a car valeting business comes with the responsibility of a trade effluent licence as the waste water should be connected to the main sewage.
• Employment law and making sure all staff are paid at the minimum wage per hour rate, recording start/break and finish times for staff. Making sure appropriate breaks are given to staff. It can be difficult because the car wash isn’t always busy and even if no cars are being washed, staff are still entitled by law to designated breaks...... check with your accountants for advice.
• Records of sales must be kept and VAT must be paid if your business qualifies (Your accountant can advise you)
The most important issue is making a profit for your business and to do this and to continue making a profit then your prices must be increased. This is only way to ensure a profitable business and better future. Times have changed and we need to change the way we work in the car valeting industry because it is the only thing we actually know and have worked so hard for so many years in the industry. We love our industry, we talk about it all day, night, dream of it, live and breathe it and we voice our opinions when we are upset , not only when we are happy. Putting the prices up will not make you lose business. The customers will understand that this is the only way you can continue to serve them.
For example, if you have an average sized car wash in an area with many other car washes around, you should not be afraid to put up the prices. If you think about when you go out for dinner with your family and you want to have pizza for dinner, you see most pizza restaurants selling the pizza for £2.50 and one restaurant for £5.50 where will you eat the pizza? Yes I agree in some areas lots of customers may not have lots of money and they cannot afford higher prices but we must understand there will be people willing to pay a higher price for a better service and other benefits such as avoiding long queues.
If you keep the price the same or lower than other car washes in the area, you are putting yourselves in the same category, like all of your competition around you.
If your services are a little more expensive than others around you, it will allow you to offer a better service and offer the customers who are willing to pay that extra the opportunity to support their local car wash.
If you have a medium sized car wash and you are positioned in a good location, not many other car washes around but you have issues such as limited space to work, problems with queues or staff issues, you should consider raising your prices for the following reason.
Give the customers the chance who can afford to pay extra, a better service. In my experience, very good car wash customers are those who love their cars, you will have a better chance of making profit with these customers rather than customers who don’t get their car washed so often. You have the opportunity to build a rapport with customers who have their car washed regularly, these customers will keep coming back to you. Sometimes, in my experience, customers who do not always get their car cleaned are more likely to complain about the service, refusal to pay, even claims of damage that was already on the car.
Unfortunately, this is the world that we live in and the car wash workers take the brunt of this as they are easy to blame.
If you have a larger car wash in a good location, have plenty of room to operate you will most likely be faced with issues such as complaints from neighbours and the larger the car wash, the more staff issues.
When you have a larger car wash, bigger operation, good location then the car wash owner will be proud of this. However the reality of a bigger car wash that makes money on busy days comes with its issues and here is where some car washes are making a mistake.
Opening a large car wash from 8am-7pm, 7 days a week is a big problem, as is keeping the prices the same or lower than other local car washes.
Being a big car wash is not by accident and it shows that the car wash management and staff have done a very good job over the years to become so successful and build their great customer base.
However things are changing and changing quickly;
Customers who do not regularly get their car washed will consume more time in the car wash as the cars will be dirtier. More time will need to be spent on these cars to ensure the customer will return and time is money.
If you reduce the opening hours for example, Mon-Thursday 8:30AM-6PM you will have already saved yourself 1.5 hours per day and if you have 23 people working you save total 34.5 hours per day. If you keep record of how many cars you wash Monday-Thursday from between 8am and 8:30am and then between 6 and 7Pm you will see how you will be making a big saving by reducing those hours.
Closing the car wash one day per week (for example choosing a day that is normally quiet) you will end up saving a lot of money.
For example, if you have 23 workers who work every day and you are keeping the car wash open for 7 days you will need 4-6 extra workers to cover the ones who do not turn up or the ones who need a day off, keeping this 4-6 extra workers as stand-by is costing you all, on average £93600 over the year.
If you divide the £93600 by 52 weeks, you need to ask yourself do you really make £1800 in your quiet day once you have paid your workers, chemicals, water, electricity? Another advantage is that all members of staff will have the same day off and this will reduce the amount of additional leave requests from your employees. It will also give you the opportunity to maintain the car wash site and make any necessary repairs.
By keeping the price low you will be busy and you need lots of staff and having lots of staff is a great thing because you can wash many cars, you can make the customers happy but at the end of the year, you as the boss/owner will have probably had a very difficult year and I’m sure you will agree with me that the last 2 years, especially this last year has been challenging with not too much profit.
Here is the problem. There are 365 days a year. 3-4 days closed throughout the year due to xmas/new year/easter.
If you keep close the business 1 day per week your profit will be much better than keeping it open for 7 days. So, presuming the car wash is open for 6 days per week;
365 days -56 days closed = 309 days.
309 days open in total
180 days that are average days- the business makes £200 per day, breaks even or loses £100. Then for example you have an average of 55 days per year that are heavy rain, snow, strong winds, you lose big money on these days.
This leaves you with 74 days per year (as an example) that are good days and with this 74 good days per year you need to pay for all the bad days, need to pay for maintenance and any equipment updates.
You have paid your 23 staff +6 staff if you do not close one day per week for 365 days per year.... only because you need all thses staff for the 74 days you make profit. I cannot predict what profit you have made in those 74 days because that is dependent on what prices been charged. However, I can confidently assume that you are having many headaches and little to no profit, you ask yourself “why isn’t the business doing so well anymore” I know because I’ve asked that question myself. It’s due to the industry changing and we all need to change with it!!
Increasing the prices will be best and the safest way to maintain our place in this industry. If you increase the prices, your profit will double. How will it double?
You increase the prices you will lose some customers. However by reducing customers you can then reduce staff. Having half of the staff when you lose money or break even only 55 days a year will be counteracted by the fact you are only paying half of the wage bill you were paying previously.
If you do not increase the price you will not be able to find the amount of staff in the nearest future you need for your customer base. If you do not provide the quality you will lose the customers and if you lose the quality, your customers will make it very hard for you to do what I’ve said above.
Due to staff demand, if you put the prices up you can then afford to pay well for your staff and you will be more likely to have a more reliable, committed work force, who in turn, will keep providing good services for your customers.
When the prices increase you will see that most of your customers will agree with the fact that is the right way to run the business and they will be proud being part of your past and supporting the future of your business, social media has been talking about our industry the last 12 months very heavily and it is worrying.
We are very lucky being in this country, where it does not matter what ethnicity, background or faith you have and will always be given the chance and opportunity to work to support your family.
We are all living in this world, a world in which everything keeps going up and we know everyone wants to have a big dream. If you cannot change the world we must accept it as it is. We cannot change the fact that the hand valeting industry has changed and it is time we accept these changes and move on, a business is not a charity.
I do know most of the people who are involved in this industry, already know these things. Please do accept my apologies, if anybody is offended by my views on this matter. I am simply trying to share my thoughts for the industry and the people who have been a big part of my life so far, it is something that I really care about.
Very kind regards
Mr Tony Coveva