Tips for Planning for a New Car Wash at your C-Store

The convenience store industry has been evolving rapidly, with business owners constantly seeking new ways to diversify their revenue streams. One of the most effective strategies to enhance profitability is by adding a car wash to your convenience store. A well-managed car wash attracts more customers and encourages repeat business, creating a steady income stream. Integrating a car wash can significantly boost your C-store’s revenue. Here are some tips for planning for a new car wash at your C-store to kick off your strategic planning and budgeting process.

The Revenue Potential of a Car Wash

Adding a car wash to your convenience store can open up a lucrative revenue stream. Car washes have a broad customer base—everyone with a vehicle is a potential customer. According to Car Wash Advisory, self-service car washes can generate 50% to 67% EBITDA, or adjusted cash flow margins, for the owner.

At H&S Energy, we recommend Washworld car washes. Washworld has over 20 years of experience in the car wash industry and provides cutting-edge technological advances in car wash equipment and systems. With Washworld, C-stores can offer Touch-Free (touchless) or Soft-Touch (friction) in-bay automatic brush systems.

Here’s how a car wash can contribute to your store’s bottom line:

1. Increased Foot Traffic: A car wash attracts new customers to your convenience store, many of whom may not have visited otherwise. This increase in foot traffic can lead to higher fuel sales, snacks, drinks, and other products.

2. Cross-Selling Opportunities: Customers waiting to wash their cars often spend time inside your store. This presents an excellent opportunity for cross-selling, whether promoting a coffee deal, snacks, or car-related products like air fresheners or windshield wiper fluid.

3. Membership and Loyalty Programs: Offering a membership or loyalty program for your car wash can encourage repeat business. Customers are more likely to return if they know they can get discounts or free washes after a certain number of visits. This not only boosts car wash sales but also increases store loyalty.

4. Higher Profit Margins: Car washes, especially automated ones, typically have higher profit margins than other convenience store products. After the initial setup and equipment costs, the ongoing expenses are relatively low, particularly if the car wash is self-service or automated.

5. Bundling Services: Consider bundling services by offering discounts on car washes with a fuel purchase. This encourages customers to fill up at your station instead of a competitor’s, driving up fuel sales along with car wash revenue.

Key Considerations for Planning for a New Car Wash at Your Location

Thorough research and planning are essential before entering the car wash business. Below are some critical factors to evaluate as you prepare a budget and plan to expand your convenience store with a new car wash.

1. Market Research and Feasibility Study

Conducting a market analysis is the first step in determining whether adding a car wash is a viable option for your business. This includes evaluating the demand for car wash services in your area, understanding your competition, and identifying your target market. Consider the following:

• Demographics: Who are your potential customers? Are they likely to use a car wash regularly?
• Competition: How many car washes are already operating in your area? What are their strengths and weaknesses?
• Location: Is your convenience store located in a high-traffic area? Is it easily accessible for vehicles?

A feasibility study can help you determine if the potential revenue from a car wash justifies the investment. Our team at H&S Energy can help you with this process.

2. Cost Considerations

The cost of adding a car wash to your convenience store can vary widely depending on the type of car wash you choose, the size of your store, and the local market. Key cost considerations include:

• Initial Investment: This includes the cost of equipment, installation, and any necessary renovations to your existing property. Automatic car washes, for instance, can cost between $100,000 to $300,000 or more, depending on the size and features.
• Operating Costs: Consider ongoing expenses such as water, electricity, cleaning supplies, and maintenance. Automated car washes have lower labor costs but may have higher utility costs.
• Permits and Regulations: Ensure you are aware of local zoning laws, environmental regulations, and necessary permits. Non-compliance can lead to fines or even force you to shut down the car wash.

After working with you on a feasibility study, our team at H&S Energy will work with you to understand your options and outline the cost considerations related to the project.

3. Space and Infrastructure

Adding a car wash to your convenience store requires adequate space and proper infrastructure. Assess whether your existing property can accommodate the type of car wash you plan to install. Key considerations include:

• Space Requirements: Depending on the type of car wash, you’ll need sufficient space for the equipment, vehicle lanes, and waiting areas.
• Utility Access: Ensure you have adequate access to water, electricity, and drainage systems. Some car washes, especially those with water recycling systems, require specific plumbing and electrical setups.
• Parking and Traffic Flow: Consider how adding a car wash will impact your store’s parking and traffic flow. You want to ensure the car wash does not cause congestion or deter customers from accessing the convenience store.

Our team at H&S Energy will walk you through all the details you need to consider about your site.

4. Marketing and Promotion

Once your car wash is up and running, effective marketing is crucial to driving traffic and ensuring profitability. Consider the following strategies:

• Local Advertising: Announce the launch of your car wash in local newspapers, radio, and online ads. Highlight any special offers or grand opening deals.
• Social Media: Promote your car wash on social media platforms, showcasing before-and-after photos, customer testimonials, and ongoing promotions.
• In-Store Promotions: Use in-store signage and promotions to encourage convenience store customers to try the car wash. Bundling car washes with fuel or store purchases can be particularly effective.

At H&S Energy, we have marketing expertise and resources available to help you promote your new car wash to your community.

Preparing Your Budget and Financial Plan

Creating a detailed budget and financial plan is essential for successfully integrating a car wash into your convenience store. Here’s what to consider:

• Revenue Projections: Estimate your potential revenue based on expected customer traffic, average ticket size, and the type of car wash you choose.
• Expense Forecasting: Include one-time setup and ongoing operating expenses in your budget. Be realistic about potential maintenance and repair costs.
• Financing Options: Determine how you will finance the project. Options include bank loans, small business loans, or car wash equipment leasing. Evaluate interest rates and repayment terms carefully.
• ROI Calculation: Finally, calculate your return on investment (ROI) to ensure the car wash will be profitable. A good ROI analysis will help you determine whether the initial investment and ongoing costs will pay off in the long run.

H&S Energy can help you expand your C-store and achieve new goals.

Adding a car wash to your convenience store can be a game-changer for your business, driving additional revenue, increasing customer loyalty, and maximizing the use of your property. However, success depends on careful planning, thorough market research, and realistic budgeting. By considering these factors, you can make an informed decision and set your business up for long-term success with this new venture.

H&S Energy Group works with convenience store owners and managers like you to implement revenue-generating programs to help them reach their business goals. Contact us today to learn more about our car wash program. From planning for a new car wash to the ribbon-cutting celebration, we’ll be at your side to help you through every stage of the project.