Value Added: Getting The Car Washed

Here's Tom Heath's latest column on Washington's entrepreneurial set:


David DuGoff loves rainy Tuesdays. He relishes big trees that drop nasty yellow pollen all over cars. He prays for a couple of feet of snow every January and February. Not all at the same time, but enough to throw lots of salt and sand slushing around the roads.

Why the passion for weather? DuGoff is the owner of College Park Car Wash, down the street from the University of Maryland on Route 1 in Prince George's County. He thrives on drivers' pain and hope. The pain is what drivers feel from watching their sleek BMWs or Mercedes - or whatever - get dirty. The hope lies in those drivers' yearn for sunny weather, which makes them come to the car wash.

I have always been curious about the car wash business. A neighbor owned a couple of car washes when I was a kid in Syracuse, N.Y. and I thought he was rich.


Judging from the looks of things, it must be Tuesday

DuGoff takes his business seriously. He is on the premises almost every day at the 24-hour car wash. He preaches a work-ethic that would make any small-business owner proud: do the fundamentals right and profits will follow.

"If we keep the lot clean and everything running, if we do the fundamentals, the blocking, tackling, running and catching, we will have a good business and make a nice living," said DuGoff, who has kept it simple by concentrating on only one car wash and making it the best one he can. "That was my goal in coming into this."

He can reel off the names and alkalinity levels of soap. He can riff on clearcoat, brake dust and car paint. When I tell him that the pre-wash, tire wash and dropless rinse are gimmicks to make customers spend more, he instantly responds with a litany of facts about soap levels and water pressure per square inch.


A clean car is a happy car.

"I built this," said DuGoff, whose family ran a string of nine local service stations - called the Homes Oil Co. - for decades. The DuGoffs sold out around 1990. Before they sold, David noticed something. Self-serve car washes at a couple of the family stations made more money than gasoline sales. So when the family sold, David kept the College Park site.

"We looked at College Park, and thought maybe it's not a good gas station site," he said. "But maybe we just build as big a car wash as possible and just go with that."

He has five self-serve bays where people spray the car themselves and three automatic bays where you just drive up and the machinery does the rest. It appears the automatic, which costs more up front because of the machinery that tows your car through the tunnel, is the real cash generator. You can wash 10 or more cars an hour in an automatic compared three to four in the self-serve. A car wash in each is about the same, around $10. That equates to around $100 an hour in the automatic compared with a little over half that in the self-serve.

The industry average is 1,800 to 2,000 cars cleaned per month, per bay on a self serve.

"We do substantially better than that," he said, adding that all his metrics are above the national average because of location, the wealth and the population of the Washington region.

The costs are higher too, though.

The cost to build the automatics is about $120,000 each for the equipment alone. The building adds several hundred thousand dollars more. The automatic washes are priced at $6, $8, $10 and $11 per wash. The $11 is most popular.

"We can do over 300 cars in automatics a day," he said, adding "that's a nice day. But the average is closer to 150."

Both self-serve and automatics require hot water to make the soap more effective, so gas and electricity costs are two big expense items. The water bill arrives quarterly, and it's only a couple thousand dollars each time. The automatic recycles its water, which is required by the local water utility, the Washington Suburban Sanitary Commission. Two full-time employees and one part-time are the biggest expense. The fixed costs of electricity, gas to make hot water are next. Chemicals and water softeners to remove calcium are also in the mix. He rolls back a bunch of money into the business every year to buy the latest equipment and repair what he has. I thought insurance would be a big expense, but it's not.

He keeps costs low. He has only two full-time employees, who keep the grounds clean, tend to the machinery, manage the vending machines and make sure everything operates smoothly. There also is one part-time employee and, of course, there is DuGoff.

As I said in a previous Value Added, a key to success in a small business is the owner consistently being on the premises.

"I am pretty much there every day. I like interacting with the customers. I spend time adjusting this or that, attending to stuff. There are a lot of mechanics that go into the back room, such as measuring the strength of the soap."

Here is one big advantage DuGoff enjoys over others. Zero debt. Because his family owned the land, he didn't have that huge cost - which today easily runs to $1 million for an acre that's commercially zoned.

He leaves no revenue source unmined. For example, DuGoff makes sure his vending machines are always full and operating, so customers can buy microfiber cloth, wax, soap or air freshener. And DuGoff adds his own little touch: he slips an occasional envelope with a couple of tickets and a parking pass to either the Washington Nationals, or to the University of Maryland basketball or football games. It keeps customers coming back and is cheaper than advertising.

The key is weather. And January and February are to the College Park Car Wash what the Christmas Season is to retailers.

"What we like is a very simple request from Mother Nature," said DuGoff. "We want a little bit of snow or rain on Tuesday. Tuesday is a slow day for retail generally, and we follow the same pattern. We can give up the business on Tuesday and not lose anything. So if there is snow on Tuesday and a little salt goes down and a little sand goes down, so by Friday, you are thinking, 'I should wash my car.' So on Friday or Saturday, we want sunny weather in the winter. It doesn't have to be warm. It doesn't matter how cold. Just sunny."

Bad weather kills about a third of the days, leaving 265 good business days a year. Saturdays are packed.

DuGoff said June is not a good month and September tends to be too rainy. Spring is usually good because of the messy pollen. "I live for the yellow stuff," he says.

The rest of the year rocks along at average or below average. DuGoff said the sight that makes him most happy is every bay full and running, with one or two cars waiting. I figure he grosses more than $500,000 and clears nearly half of that after expenses. He didn't yell at me when I ran that by him. He built a nice, Frank Lloyd Wright-style home in Chevy Chase. He also owns a Mercedes convertible and Ford Hybrid Escape.

He tried to buy stocks, but now leaves that up to his broker at Wachovia. He also owns mutual funds and other securities.

"We make a good living. We are not becoming millionaires. I know if I work hard and if I maintain the operations, people will come. It's very satisfying to me in that way. I see the results of my effort."

By Dan Beyers  |  May 20, 2008; 7:16 PM ET  | Category:  Value Added
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Comments

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Having seen the movie Car Wash from the 70's and having used self service car wash bays for decades, I never gave any thought to how complex running a car wash can be. From now on, I won't take the business for granted. A far cry from last week's feature on Fannie Mae, yet another insightful analysis of what makes a successful entrepreneur. And I guess I need to upgrade to the $11 wash from now on.

Posted by: Cooper | May 20, 2008 10:20 PM

Tom,

Love the details in your stories. Keep them coming.

Posted by: Morris | May 21, 2008 12:04 PM

Tommy,

As usual, you give the readers the benefit of your experience and access. Thanks for this story. But I got to tell you, the presentation of "Value Added" leaves a lot to be desired. First, it's hard to find these columns. There is little or nothing on the Business section front door to indicate they exist. And who is Dan Byers? It should be your name and face across the top. Second, and I'll be frank, the photo in this story is lame. Why not give me a shot of DuGoff filling up his soap machines or chatting up customers or at least show me the inside of the car wash. And while you're at it, stick a picture of yourself on these pages. We're getting to know you. It might not be a bad idea to add a mug and a little background at the bottom of the columns that show your credentials and biz background. In any case, I love reading your stories. Thanks.

Posted by: Greg | May 21, 2008 12:26 PM

thanks cooper. as usual, you have some trenchant observations.

Posted by: tom heath | May 21, 2008 3:01 PM

Greg is right. It takes too many clicks to find Value Added each week. I am sure there would be many more posts if it was specifically listed in the sidebar under columns. Given that it is a column of general interest, and almost always both interesting and fun, I would hope the editors would make that change.

Posted by: Cooper | May 21, 2008 6:43 PM

I would agree with the comments about the difficulty in finding this - I think the IT people could make it a lot easier without any real effort. Regarding the article, it is always a pleasure to read about people who have made a success of their business because they provide first rate customer service and take doing so seriously. In DC many will look down on persons whose business involves getting their hands a bit dirty, but to me the key is whether you are taking real pride in what you do - thanks for the story and hopefully it will inspire others.

Posted by: David | May 21, 2008 6:59 PM

Hi gang. I'm the local business editor, and one of the folks who helps put the WashBiz Blog together every day. "Value Added" is a little experiment of ours to do a blog in a blog. We've been very happy with the response (and Tom's posts!)and we are eager to hear your thoughts on how we can improve the operation.

For starters, how do you find Tom's column each week? Some of you have said it takes too many clicks; what route are you taking?

Your answers will help us improve. Our goal is to publish Tom's column online every Tuesday and reprise it in the newspaper the following Monday. We also have been tinkering with ways to make it easier to discover.

Here's what we have done so far: We recently added a link on the sidebar of the WashBlog here (under Archives) to all of Tom's columns, so you don't have to wade through the daily postings to find his latest. It's also possible to subscribe to his column through RSS, so each column gets sent to you as soon as it is filed. Or you could simply add the Archive link to your bookmarks, and get there with one click.

Our experience tells us that there are many different ways people "find" content on the Web. If we haven't perfected your way, let us know.

In the meantime, we really appreciate the efforts you've taken so far to find Tom's columns.

(And yes, we plan to include another photo in his latest post!)

Posted by: Dan Beyers | May 22, 2008 8:15 AM

Comments from a PR person's perspective:

Thanks, Dan for making Tom's columns more accessible! By the time I start looking for them, they are buried in the Post's blosophere. I've just signed up for the RSS feed. I'm not sure what an RSS feed is, but I'll look forward to finding out and to receiving the columns on a regular basis.

You need to do more promotion of Tom and his columns!

Posted by: Polly | May 22, 2008 9:55 AM

I posted a comment earlier this morning. I need to clarify that I am not Tom's wife Polly!

Posted by: Polly | May 22, 2008 10:38 AM

Dan,

Thanks for responding and addressing our concerns.

My route is Home page/News/Business/WashBizBlog and then finding it generally in the left sidebar. I will try the RSS route.

Thanks. This blog is a real service and great read week after week.

Posted by: Cooper | May 22, 2008 10:41 AM

Tom,

Greg makes a number of good points. For a columnist to gain a loyal readership there has to be a personal bond...a photo and bio would be good. Who the editor is is irrelevant.

I love all the detail you include. It's also nice to see that the press is covering off-the-beaten-track-stories that aren't scandals.

Glad you didn't take the buyout!

Keep it up!

Posted by: Aja | May 24, 2008 6:44 AM

I like how this column delves into 1) how a business person got started in their line of business, 2) what type of knowledge and experience the business owner possesses, 3) what it's like to operate the biz from a lifestyle perspective, and 4) how the business cash flows. I'm sure the business owners aren't overly excited about giving out their earnings, but the numbers are an essential part of what makes this column so interesting. I think a lot of talented executives in the Washington Metropolitan area look at businesses, at franchises, and say to themselves, "I might be doing a whole lot better financially if I just bought my own business." As a business consultant, I've worked with a number of small and medium-sized business owners who were formerly executives for big-name companies. This column, in effect, helps people shop the possibility of owning different types of businesses.

Most people in the Washington Metro area are driven to achieve some type of success. There's an endless wellspring of curiosity about how others have done it and are doing it.

Posted by: David Sutton | May 27, 2008 4:00 PM

david. very trenchant observations. thanks for the input.

Posted by: tom heath | May 27, 2008 4:34 PM

david. very trenchant observations. thanks for the input.

Posted by: tom heath | May 27, 2008 4:42 PM

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