The current lack of industry leaders represents an exceptional opportunity for a large and organized mobile car wash company to achieve regional domination and eventually dominate the Southern California carwash market. The best place to start a regional assault on this market would be to concentrate North and West of Los Angeles; Chatsworth and Simi Valley to Malibu and Tarzana to Santa Barbara. Once these relatively competition free markets are won Los Angeles, San Diego, Riverside and San Bernardino counties could be dominated by a steady city-by-city methodology. From there the company should include neighboring regions and Sun Belt States. By setting up each territory next to an existing territory, they will, brick by brick, build an impenetrable wall to ward off would-be competitors. Utilizing their satellite offices, they can build that wall rapidly by connecting each area. As this occurs, we will have achieved regional and eventually national name recognition and proceed to other long-term goals.
The Company attempting this would need to have satellite offices in three states in the West including operations in Las Vegas, Phoenix, Tucson and Reno. However the company must concentrate most of its efforts in Santa Barbara, Ventura and Los Angeles counties. California should be the mainstay, and rightfully so, with over 30 million registered vehicles. The other state operations would remain quite small but necessary to obtain a Federal Trademark status (interstate commerce is required) and to have a workable launching point for massive rapid roll out when the time comes. In California it would be important to dominate the markets in the following cities.
It is also recommended to have many other cities with operations even if only a few units and one manager stationed there. Although we have little or no competition in these cities, it would be too presumptuous to say that we dominate the areas:
Las Vegas, NV
When setting up crews in new territories, a marketing scout should fly over the city and look for large fleets of vehicles, big industrial centers and expensive residential areas. By initially securing large truck fleets, it will give the new operation a quick customer base. They should then look for retail centers close to expensive housing and offer their services to store owners as a convenience. While washing shopkeepers’ cars, they would make contacts in the parking lot of shoppers and go to their homes to wash additional cars. The word of mouth would spread from there.
Market Size and Trends
California is very large and could presently support between 950-1998 units from San Diego to San Francisco. Eventually, as the idea catches on, there could be five times as many units. It has been our experience in many cities, that once this type of car wash becomes an accepted method, everyone will start using it, very similar to what happened with Domino’s Pizza in the early 1980’s. During the last recession, many small time operators have ceased business while only a few continued to expand. Overall overhead has come down in the industry in the following areas:
Cost of New Equipment
Advertising and Printing Costs
Paging and Dispatch Service
Although a mobile car wash company will experience a 20% drop in gross profits during the next reversionary economic period, a mobile car wash company’s cost will drop 30%. For an average crew, that is only about 10-15% of their daily gross income, or $40-50 per day. During this time, the company would be advised to branch out in their advertising and marketing efforts on a much more grassroots level to compensate for any losses, by doing car wash fundraisers for non-profit organizations and schools. When the economy returns to California following the end of the next business cycle, the strategy of the mobile car wash company should be ready for a quick upward climb. California is home to some of the largest truck fleets in the world, including some of the following fleets:
Vons Grocery Chain (the largest truck fleet in the world, responsible for transporting their own product) – El Monte, CA
Ryder Transportation Systems (the world’s largest truck rental and leasing corporation ) – Five Regional Offices in Southern California
California Highway Patrol (the largest public entity law enforcement fleet in the United States)
USPS (more mail jeeps than anywhere else in the country)
Federal Express (more vans in CA than anywhere else in the world)
Trucking Companies (300+ in the Los Angeles area alone)
Utility Related Companies, such as the telephone companies, gas companies, and cable franchises (50,000 + vehicles alone)
Although while in an economic recession, a mobile car wash operation has an advantage and can experience a phenomenal growth, more than tripling in size. As the economy in California improves after the future drop, so will sales revenues of each outlet, therefore providing the necessary cash flow to expand with the market. The mobile car wash sector leads the local economy by six months because it is dealing with the disposable income of their clients and the amount of cash in their pockets at any given time. As that amount of money increases so does their willingness to spend it. Since the average basic car wash is around $10.00, people are more apt to buy such services when they have less money available than a $200 microwave. As their pocket money (disposable play money) increases they will more freely spend that money; this increases the operational units kill ratio from 40% to 60% to 80%. (Kill ratio = number of people out of ten when asked, choose to get their car washed, 4 out of 10 = 40%.).
Any company considering rolling our a mobile car wash nationwide service needs to be thinking here and looking at the weather and love of cars in California as a starting point.