How To Value Self Serve Car Washes
Tweet · Jun 27, 2024
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Heard from a Carwash owner today about the ins and outs of his business.
Here’s the 10,000 ft view of the numbers to this business👇
Valuation:
3-5x gross revenue multiple Ex: 100k gross = 300k - 500k valuation
When you start talking the express model, it’s a different ball game. But self serve still fits in the example above.
Self serve is fairly heavy capex, BUT can be written off year one with taxes.
Replacement costs:
It costs about 25k-35k per bay for self serve car washes vs. 150k-250k for automatic car washes.
Capital reserves:
Repairs are about 5-7%, so if you plan for about 10-14% you’d be pretty good.
Self serve doesn’t normally require replacing the equipment. For the most part, you can fix what’s broken.
Is there still opportunity today with self serve car washes?
👉 Yes, but it’s not a growing segment of the car wash industry. It is still a GOOD segment nonetheless.
Why did private equity become interested in car washes?
👉 The subscriptions. As soon as recurring revenue became popular in this industry.
Advice to anyone that wants to get into the industry:
👉 Get involved in an association and go to an industry show. Talk to people and learn as much about the industry as you can.