You have an car wash that you’ve built from the ground up, it has been your baby since the very beginning. You’ve taken the correct steps to make your car wash work efficiently and superior to all other washes in the area, by continuing to train your staff, carrying the best products, keeping your facility in tip top shape and keeping your clientele happy. And at the end of the day, you sit down after all the work is done and ask yourself, What is my car wash worth? Your objective would be to receive the maximum value for it, and to make sure that your car wash is well taken care of after it’s sold. There are many variables to consider when looking at the possibility of selling your car wash and taking it one step at a time puts you on the road to success.
In the last year, there has been 14 car washes sold and purchased in the United States, that met our criteria. Car washes, are a lot like spas for the car lovers of the county. And much like other businesses, car washes have stuck around and some are gone forever, but of the car washes, that have stuck around in the last ten years, we compiled and have broken down the data for you to have the knowledge needed or you to make a solid decision to sell.
What is your Car Wash worth?
The value of your Car Wash is correlative to your individual business, the market and what potential buyers are willing to pay. Larger carwashes that provide a more extensive set of services, such as detailing or light body work will sell for a higher amount than a car wash that does just car washes. Both of these car washes are great in their own way, but when trying to figure out what your business is worth, there are some questions to consider, including:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Car Wash worth more?
Your Car Wash has been a top priority since you signed your name to the paperwork and you believe that it is worth top dollar. However, not all buyers will agree unless you are able to show your buyer, that their return on investment (ROI) will be high, their relative risk will be low and have the following characteristics associated with your car wash.
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average Car Wash sell for?
The graphic above, has broken down the data that we analyzed from the last year, which consisted of businesses that range in the $50 thousand to the $10 million valuation range. And these businesses can sell for as much as billions of dollars or as little as a few thousand. You can clearly see the average of car washes sold in the last decade in the United States is around the 4.40 times earnings, with the average sale price coming in at $1,017,214.29. However, to have a clear understanding you also have to look at the median sale at $512,000 as well as the most frequent sale at $300,000. All this information is a bit overwhelming without being broken down, so later in this article, we will break down these numbers and give you the information needed to be able to start the selling process.
What is the most frequent deal size?
The most frequently sized deal, when selling your car wash, is the valuation range of $250k-$500k. This range has dominated the number of sales. For example in 2015 there were 14 sales of car washes, and of those, 6 of the businesses were valued at between $250k-$500k. While the market for car washes, will fluctuate depending on things such as weather, season and the economy, you can be rest assured that cars will always need to be washed, and the car lover crowd in our great country will always seek out the best place to do that which can drive the sale of car washes.
Is the Car Wash market getting bigger?
In 2015 the total yearly transaction was well over $14 million dollars and while there will always be fluctuations in the markets and trends, being able to keep your salon a float in a time of the market fluctuations will give future buyers the knowledge will give future buyers the knowledge that your business is safe to purchase and is less risk than other carwashes for sale.
Are bigger businesses worth more?
As a general rule of thumb, yes, the bigger your business is, the more that is is worth. As you look at the images below, you can see that as your revenue becomes larger, so does your multiple, which in turn helps you as the business owner generate a better return on your investment. To help you understand the graph a little better, look at the multiple from 2015 for the valuation price range of 0-$250k, here the average multiple lands right at .96, with a total of 1 car washes sold, however when your business’ valuation is in the $2-$10 million range the multiple jumps to 8.09, with 2 car washes sold. So, remember the higher the multiple the more you are able to ask for your business.
What states have the most business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? New York and Illinois had the largest amount of car washes sold last year, but still doesn’t mean that someone is not looking to start a business venture in your area. Having a broker to helpyou find a buyer for your car wash no matter what state you are in, can help you successfully sell your business.
Why would you sell in the first place?
When deciding to sell your business, it can become an overwhelming and difficult decision. Your reasons will always be different from the car wash owner next door. Maybe you need a change, or you are ready to retire. Whatever your reason is, be sure that you have the necessary knowledge and tools to get the value out of your business that you are looking for.
How long will it take to sell your Car Wash?
There is not one set timeline for the sale of any business. The variables of the individual business and terms of the sale will define how long it will take to sell. Do keep in mind that generally speaking, the larger the deal (over $1 million) take longer to sell, over the smaller deal (under $200k) because of the complexity of the business, in addition to the risk of purchasing a company that large for the buyer. And try to remember, that your individual business will always sell at a different pace than other car washes, and being patient is an essential part in selling.
What is the process of selling your Car Wash?
Our step by step process will help you become more confident, when you decide to sell your car wash. Many business owners forget or overlook essential steps in the selling process and sometimes become confused and lost throughout the process. Doing each and everyone one of these steps will help guide you to the maximum profit of the sale of your business. If you have questions or concerns about your car wash’s value or the process in itself please contact us and we will be happy to help.
Who will buy your business?
Buyers are essential for the sale of your business, but have no fear because there are many options and possibilities. These buyers can be first time buyers, experienced entrepreneurs, or private equity companies. No matter what the size or maturity of your business there is a buyer for your business, and we can help you find them.
After reading this article and understanding the necessary steps and processes that come along with the sale of your car wash, and you’ve decided that selling your business is the right decision, we encourage you to have your car wash valuated by a professional broker, this will ensure that you are receiving maximum value for your business. And remember that your car wash is like no other and is unique, so comparing it to the shop in the next town over, will not get you the exact answers you seek, but we are more than happy to start you with the right steps to finding the true value of your car wash. We can help accelerate the sale, by helping you find the right buyer as well. Feel free to fill out our valuation form and get started right away.