Today, as I write this article, as a Certified M&E Appraiser (Machinery and Equipment) and also as a Certified Business Valuation and Appraiser, as many as 95% of self service car washes ( Coin Operated) will have a combination of self service and automatic bays.
Further, the Valuation or Pricing is not done, at least professionally – and by that I mean by someone like me, and as required by the SBA or Bank – based on Multiples. Multiple of Earnings is, of course critical when making a buying decision and it’s the first thing the Lender also needs to know – can the cash flow support the debt load of a new loan AND still pay the owner a reasonable salary to operate it?
But the Valuation of a self-service combined with automatic car wash is sold with real estate, equipment and assets. The appraised value of these items is between 90 and 98% of the Asking Price or the Offering Price, at least as far as a bank or the SBA is going to be friendly towards. Also, the cost of building these is so high, it is generally unwise to build on a leased property. So most will be real estate heavy.
Finally, it is nearly impossible to sell a self-service combined with automatic car wash without also selling the real estate.
This should be helpful to anyone who owns a self-service combined with automatic car wash and wants to refinance or sell the business. If you want to buy such a business, be sure to compare this to the cost of building a brand new location.
More on that on another BLOG.