Not long ago, someone asked me if they ought to buy a mobile car washing business. The company they were looking into buying had quite a large number of car dealership accounts, where they cleaned all the cars two times per week. We are in a recession, so it makes sense to be in a sector of our economy that is still working. The reality is that the service sector is probably the safest place in our economy at the current time.
Now then, “is this a good time at the bottom of the market, with a nearly collapsed auto industry to get into the mobile car washing business, one which specializes in cleaning auto dealership car lots?”
As far as being skeptical, let me discuss with you the reality that once you buy the business, if you do, you will find 25-35% of those accounts will cancel – using the change as an excuse to migrate to another company. Often the sales managers, etc. are loyal due to personal relationships with the company’s owner who is washing their vehicles, thus, they put up with somewhat less than stellar service or quality.
Also realize that even if you don’t buy the business, you can get that migration loss away from the new owner during the chaos associated with the transition, it’s a lot like taking advantage of a corporation going through “change management” or a shake-up of the board, that’s a good time to strike with a quality sales team. Think on that option as well.
You also need to understand that a large number of auto-dealership accounts right now are going to be a challenge to you accounts receivables, they are going to be paying slowly and some may even go out of business unable to get financing if our nation double-dips, and remember in 2-3 years we will be swamped with low-priced electric hybrids from BYD Motors, Warren Buffet’s baby and hedge in China, I think he owns 20% or more now, they are coming, and within five-years so too is Tata Motors from India.
Perhaps a positive in all this, is that in the future this could bring in more business, for a mobile car washing company. Meanwhile GM is re-installing 900 dealerships previously cut in haste during their “Bankruptcy” by-pass via Federal Government intervention in franchise and bankruptcy laws. Those 900 dealerships, well, there will be some of those in your area for sure. So with all that said, maybe this could be a good business to get into going forward. Please consider all this.
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