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Strategic Planning Information |
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Parking Business, the Details on Increasing Lot Revenue
If you are in the parking business and own or manage parking lots you may want to think on some additional concepts to increase lot revenues. Whether you are looking to add value for your customers, expand your customer base, or simply increase your revenue, the addition of a car wash and/or detailing service to your parking facility may be the answer. There are many options available to you if you want to provide these services. You can contract with a local independent company in your area with a good reputation, co-market with a detail shop nearby who will service your lot, buy your own unit and run it in-house or purchase a franchise name and equipment from a national company. INCREASED REVENUE Whichever route you choose, it is possible to increase daily income, if you hire the labor or contract out. "Car washing and detailing not only provide value for your customers, but also maximize the per space value of your lot," commented Philip Hutcheson, owner of The Car Wash Guys franchise in Nashville, Tennessee, who currently had Central Parking in Nashville as a client. "It's all about convenience and saving customers time. We're only washing their cars, but that can give them time to do other things they want to do," said Hutcheson. HIRING A CONTRACTOR If you choose to hire a local company to handle the job, then try to be respectful of their time. You may wish to start out one day a week. For example - Wednesday is car wash day. You collect the money and park the cars in car wash row. The local company arrives at the desired time and washes, waxes and details the cars and returns the keys to you. Make sure the mobile operator is licensed, insured, maintains quality employees, shows up on time and has some sort of re-claim device for wastewater. To reach your revenue goal, increase services to more days and more hours a day as the work catches on. It will build slowly, but will give you an edge and higher average ticket charge per car. A typical financial arrangement with a detail service can net you $2 to $5 per car for a wash and wax and as high as $15 per car for a full detail. A WIN-WIN-WIN Here's an example of how a parking facility can partner with a detail service. Tim Morse, co-owner of The Car Wash Guys franchise in Oklahoma City, washed and detailed cars for SunPark, a private parking facility near Oklahoma International Airport. He washed their shuttle buses for free in exchange for use of a storage room to keep supplies in for his mobile detailing service. SunPark receives a percentage of each car washed and detailed. This relationship provides a win-win-win - for the customers and both businesses involved. SunPark was bought by new owners in 1998. The previous owners had offered a basic wash and wax as an added service, explained Manager Larry DeLuca. "We took it a step further. We now also offer car detailing and oil change which have been well received by our customers. Our agreement with The Car Wash Guys allows us to offer detailing at a competitive rate to what our customers could find elsewhere in the city, just with the convenience of having it done while they're away," he explained. When travelers arrive, they are given a card inviting them to select additional services besides parking during their trip. They indicate their return date and if they desire a detail or car wash. Their cars are prepared the day before they return, waiting for them all shiny and clean. "The word of mouth about the additional services that you don't receive at the airport has helped increase our business as a parking option of choice," commented DeLuca. With Hutcheson's work in Nashville, for the monthly tenants, the cost of a wash or detail is added to their monthly fee as an ongoing service. Washes can also be used as an incentive to customers, i.e. two free car washes a month. A lot owner can mark up contracted services for additional profit or add them as an incentive to retain long-term customers. For a parking company in Tucson, Arizona, The Car Wash Guys team washed every car in the structure once a month and extends a special group rate of $4.00 per car to the lot owner. The customers were so happy to have the added "free" service that when the lot owner recently raised monthly rates there was only one complaint about the free increase. BUYING A FRANCHISE You can also buy a franchise if you're serious about adding detailing as a permanent source of revenue. One type of company which lends itself well to a model for your operations is the Detail Guys based in Reno, Nevada offers mobile detail units, training, marketing and computerized software in one complete package. Each unit has a re-claim device, central vacuum system and enclosed lockable trailer. Visit their web site at; www.detailguys.com. The Detail Guys and "brother" company The Car Wash Guys set up franchises in 23 states to serve 110 markets nationwide. DOING IT YOURSELF If you opt for the do-it-yourself route, following are some suggestions regarding equipment. You'll need a pressure washer with cold and hot water, hot if you also want to occasionally wash down the lot or parking structure. For cars you need 1800 psi that will take an 8hp motor with a belt driven pump. (We do not recommend direct drive.) Ask for a cat pump, operators say they have nine lives. You'll also need at least 50 feet of non-maring 3000 psi single braided hose or a reel and a wand. Always operate a wand of less than 24 inches - less chance to ding a car, which is parked too close or over spray cars already washed or cars you are not washing. You need a 200-gallon water tank. All this can be mounted on an industrial Cushman cart. Make sure the cart has four wheels, since water moves and weights 8.2 pounds per gallon. That's 1,640 lbs! Insurance is not only an important factor to look at when hiring a contractor, it's essential if you plan to run the operation yourself. You'll want to get a liability policy of at least $1 to $2 million. HIRING EMPLOYEES You will need to hire experienced labor or your employees will need some type of formal training. A company called Detail Plus in Portland, Oregon offers training courses at your place of business and videotapes and manuals. For more information, visit www.detailplus.com. With professional training and profit incentive bonuses of 10-15% for employees, you may be able to put together an excellent crew. ENVIRONMENTAL ISSUES You'll also need to learn a little about car wash wastewater. Even if you are hiring a company on contract, you should at least be aware of the environmental laws pertaining to waste water. The basic law is this: do not allow wash water run-off to enter a storm drain. Block off storm drains and vacuum unevaporated water into a holding tank for proper discharge into the sanitary sewer. You or your contractor will need to locate a drain which is connected to the sewer treatment plan within your property or drive the waste to a nearby gas station, for example, to put in their R.V. dump. This BMP-Best Management Practice is consistent with nearly all NPDES-National Pollution Discharge Elimination Systems permits. For additional information, visit www.epa.gov and search under water pollution. CO-MARKETING/NETWORK OF SERVICES If you utilize the services of a gas station, this will also be an excellent opportunity to co-market with another business, perhaps even help send them business. It pays to have a network of local businesses such as lock-out specialists, tow companies, or maintenance services. Remember you are in the automotive business even though you just park them. A NATIONWIDE RESOURCE The Car Wash Guys is currently working with numerous parking garages around the country. We'd be happy to talk with you if you are interested in adding services to your facility. We can also serve as a resource to help locate an independent detailing contractor or a franchisee if one is located in your area. The Car Wash Guys set up training centers for their franchisees in Columbus, OH; Nashville, TN; Orlando, FL; San Antonio, TX; Oklahoma City, OK; Overland Park, KS; Denver, CO; Palm Desert, CA; Sacramento, CA; Bozeman, MT; Portland, OR; Lewiston, ID; Reno, NV; and Scottsdale, AZ. The Car Wash Guys was founded in 1979 and now washes just about everything from cars, trucks, boats and aircraft to windows, buildings, graffiti removal and more. Best wishes on your plans to maximize revenue as a parking professional. Just remember, success can be found in the details! Think on this. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
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