3 Tips to Reduce Car Wash Operating Expenses
Being a business owner is an ambitious job. If you’re a car wash owner, you probably lose sleep at night worrying about profitability. Even when business is good, you wonder if there is a trick to earn a little more. Perhaps spending more on advertising, buying up more locations or offering more premium products will do the trick.
But, when you’re doing what you can to capture the highest market share possible, the next place to look is at your costs.
Cutting costs is a tricky strategy. Cutting too much or cutting the wrong costs could spell disaster. You especially want to avoid cutting corners in a way that will erode customer trust. An inferior car wash will cost you more in bad word of mouth than it will save you in pennies pinched.
As a primer in reducing operating expenses, here are three types of operating cost reductions to consider
Reduce Cost of Materials
The first operating expense that falls under the cost of materials is your detergent, waxes and other chemicals. One tip to reduce your cost for detergent is to switch to using hyperconcentrates if you can. These detergents carry less water weight and therefore cost less to ship.
Another tip for reducing the cost of materials is to slow your car wash conveyor whenever you can. A slow conveyor will prolong the time that the soaps sit on the car. This increases their effectiveness without using additional water or soap.
Reduce Waste and Loss
Your car wash’s waste and loss is one category of operating expense that is always a good idea to reduce. Losing money unnecessarily doesn’t have the upside of benefitting the customer.
The two highest costs for car wash are water and electricity. These are recurring utility expenses that you will need to pay for even if you have an automatic rollover car wash. Reducing your cost of water may depend on your water reclaim system. Check that it’s working at optimal efficiency (perhaps your car wash pits need cleaning).
Another tip is to look for where crime could be costing you. Start with surveillance and a healthy skepticism. You’ll never know if customers or employees are exploiting a security flaw in your car wash until you start looking. Surveillance at the entrance and exits of your car wash can also provide proof if a customer ever falsely suggests that your equipment damaged their car.
Refunds are another common source of profit loss. The only problem: when a customer asks for a refund, it’s too late to reduce this expense. It’s bad for businesses to be stingy about refunds when you’ve legitimately wronged a customer.
Instead, look for opportunities to improve communication with your customers. Customers often ask for refunds when they feel tricked. If they know what they’re getting upfront and know the risks of your bargain barrel products, they may feel less tricked if something doesn’t turn out well. Also, if you have a clear policy on when you will and will not issue refunds and for how much, you can plug loopholes and deter people trying to exploit your generosity.
Reduce Labor Costs
The final and potentially biggest cost to cut is labor. Your employees are your most versatile asset. A well-trained staff could assist you in looking for costs to cut but unmotivated employees will actively cost you too much.
The first area to start is operations that could be automated. Improvements in automation may require some initial investment but can permanently save you money from then on. This could be an obvious opportunity for automation like an automated point-of-sale system. Or it could be a less obvious improvement like using signs to fix traffic bottlenecks that continually distract employees from their work.
The second optimization in labor costs comes from using downtime efficiently. If your employees understand that their responsibilities extend beyond washing cars, they may help you with other tasks.
Finally, think ahead to busy days. If Saturdays tend to be the busiest day of the week, start the payroll work week on Thursday to reign in overtime costs. If you put the busiest day midway through the work week rather than at the end, you will avoid calling on staff to cover shifts when they’ve already put in a full week of work. You can also plan better for busy days by hiring staff proactively to keep up with turnover. Anything that reduces overtime does a lot for your labor costs.
Bonus Tip: Hire a Professional Car Wash Pit Cleaner
Our final tip for cutting costs is to hire a Pit Crew as your professional car wash pit cleaner.
Because we’re fast and have all the right equipment for quality work, we could save you on labor costs, especially if you’ve been paying your employees to clean your car wash pits.
Since we already have professional equipment for pit cleaning, you don’t need to spend on rarely-used car wash pit cleaning equipment.
We’re not a free service, but we believe that our efficiency and quality service are our contribution to helping you cut costs and run a profitable car wash—especially by increasing productive business from fixing inefficient car wash pits that can cause customer backups.
*Pit Crew Car Wash Pit Cleaning is not a business consultant and provides car wash operating advice based on thorough research and years of industry knowledge. Operation expenses will vary greatly from business to business. We encourage you to do your own research and work with what helps your business thrive the most.
