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Columbia Firm Cleaning up in the Car Wash Business, Thanks to SBA Financing and Owner’s Keen Business Acumen
Drivers in Columbia looking to turn their ride from grimy to sparkling often turn to Tiger Express Wash for a quick, quality wash-down. And when the owner of Tiger Express Wash needed financing to weather a buy-out and expand its offerings, he turned to the SBA 504 Loan Program for help.
A discussion with Roland Bartels of Tiger Express Wash is like observing every business course taught in college applied to a real world situation. His research into profit optimization in the car wash industry is truly impressive—he exemplifies everything SBA and its resource partners tell clients about running a business.
While this level of research might not be what you would expect from the owner of a chain of local car washes, it is clearly a winning formula. In June 2012 Bartels and his previous partner divided their business. Bartels wanted the flex service and exterior service car washes and his partner wanted the self-serve car washes. Bartels planned to go to primarily a membership system because his research showed the profits would increase and his partner just wasn’t interested.
Bartels needed financing to buy out his partner, form a new LLC, and to expand. He turned to Donna Hamilton of Enterprise Development Corporation for a loan through SBA’s 504 loan program. This particular loan was very complicated (Bartels said it was like “drilling through knotholes”) since a new LLC was being formed and required additional paperwork and time, but the results were worth the effort. He is looking to build his fifth car wash with another 504 loan—he had two facilities when he received the loan. In just 15 months he went from 45 to 75 employees and his revenues went from $1.6 million to $2 million.
Bartels reaps 20 new memberships a day—400 in June 2012 to a current total of 6000! He originally set his price point too high and customers were over-utilizing the memberships. When he dropped the membership prices volume went down 10% and revenue went up 13%. He cited a Cornell study during the interview in explaining his pricing—a monthly basic membership is a little over double the price of a basic wash. He offers specials on Pandora and special offers for MIZZOU students.
Bartels’ strategy includes reducing the number of employees tied up in taking payments diverting as many personnel as possible to the actual wash process. Members have an RFID chip on their cars so they can just drive through the gate and proceed to the wash. His employees wash 135,000 cars per year which equates to 12 cars per man hour. It takes about five minutes for a car to go through an exterior wash process. A full service washes it takes about 10 minutes for a full interior and exterior cleaning. His cashiers are expected to help with the washes when they are not ringing up customers.
Bartels expects high levels of customer service from his employees. They are expected to be clean cut with no visible tattoos. They are not allowed to smoke or chew tobacco within sight of customers. Their shirts are to be tucked in. They must acknowledge the customers and use basic manners we wish were still in play everywhere. They have to be able to deal with issues like cars with keypads that automatically lock when they go through the car wash—and the owner doesn’t know the code to unlock it. In one instance a car overheated in the wash last summer blocking the wash. The manager had to deal with getting the car out of the wash. As Bartels said, “Nit-noid stuff. The job is hard as working concrete (construction work). It’s a career option for my managers, though.”
He also treats his employees well. His managers are young and are eligible for health insurance. He plans to create an ESOP (Employee Stock Ownership Plan) for his employees in five years as he was part of an ESOP in his previous 25-year career in construction.
Bartels also supports his community—he’ll donate $5 from Black and Gold washes to a cancer victim, sponsor golf tournaments, or donate free car washes to a new high school.
When asked about advice for prospective small business owners, Bartels said with a wry grin, “Don’t. You’ll work 16 hour days seven days a week. It’s hard.” He added, “I love the camaraderie. I love the growing process. I love what I do.”
He said about the 504 loan process, “Banks didn’t know how to handle unusual businesses like car washes, especially after the recession. SBA took a lot of risk out of the process.”
Tiger Express Wash has three locations in Columbia and one in Jefferson City. (Bartels noted that Jefferson City has a very different business environment than Columbia.) The flex service washes offer exterior services and the option of interior service. The other washes only offer exterior services but they have self-serve vacuums on site. Visit Tiger Express Wash online at http://www.tigerexpresswash.com/ for locations and pricing information.
Enterprise Development Corporation can be reached at www.entdevcorp.org or at 573-875-8117.
To find out more about the 504 loan program or other SBA services, contact the SBA St. Louis District Office at 314-539-6600 or visit www.sba.gov/mo/stlouis. SBA St. Louis also maintains offices in Columbia and Cape Girardeau. (Contact information is on the web site.)
After a disheartening experience in commercial real estate in California, Michael Norwich Jr. moved to El Paso, Texas to work with his father who owned several Jack in the Box restaurant franchises.
He began with the restaurant by learning the basics – making hamburgers and French fries, working the drive-thru and cleaning the restrooms. Within six months, he was given his own store to manage.
Shortly after Michael had begun with Jack in the Box, a Seattle affiliate was linked to an e-coli outbreak that sickened over 500 people. News of the outbreak was so wide spread that the chain experienced revenue declines in excess of fifty percent within a week. The restaurant Michael was managing had its weekly revenues drop dramatically and in order to survive he worked with only one other employee.
The first year loss after the Seattle incident was overcome through assistance from the corporate Jack in the Box and a local lender who agreed to convert the business notes to interest only.
Michael was slowly able to pull the business out of debt. Throughout these difficult years, Michael continued to maintain the image of the restaurants, ensured that he kept the best people on staff, focused on customer service and improved profit margins.
Michael acquired the operation of the business in 1993; he worked to boost revenues by trimming costs and staying lean as sales volume increased and when it came time to expand he turned to the U.S. Small Business Administration (SBA). With the help of an SBA 504 loan Michael was able to purchase land to construct a new building and acquire equipment. Since that first SBA 504 loan, Michael continues to benefit from the support and assistance from the SBA 504 loan program.
He’s a strong believer in reinventing his business to keep his customers interested and to attract new customers. He now operates 11 restaurants in El Paso and two in Las Cruces, New Mexico with an overall employment of 350 people.
His hard work and determination to maintain his business even through the difficult years and his ability to bounce back and increase sales and employment led to his selection as 2007 State of Texas Small Business Person of the Year.
Young entrepreneur Masroor Fatany started Sears Garage Solutions of Houston in 2009 at the age of 22. Sears Garage Solutions is a Sears franchise that provides repair and installation services and offers a full line of garage doors, accessories, and entry doors.
Masroor’s exposure to entrepreneurship came at the early age of 10 when he frequently accompanied his father on service calls in his air conditioning business. He later worked in another family business in retail packaging and shipping. While attending college he and his father launched Unlimited Calling, Inc. selling pre-paid Cricket wireless products. They expanded the business and now have 6 locations.
After graduating from Texas A&M with a bachelor’s in accounting and a Master’s in Finance, Masroor worked as an Assurance and Advisory Associate at Ernst and Young. In less than a year, he realized he wanted to be a full time entrepreneur and began his search for a business idea. His search took him to Sears where he was chosen among 30+ applicants. He started the business with the help of a loan from the U.S. Small Business Administration (SBA). Masroor also utilized the services of the University of Houston Small Business Development Center (SBDC), a resource partner of the SBA, that provides assistance to small businesses. Always looking for ways to improve and grow his business, he took advantage of all the services the SBDC offered, including research in their library, training classes, counseling, procurement and technical assistance, and the Professional Services Network of providers.
Upon completion of the Sears franchise training, Masroor hired one technician and committed himself to learn every aspect of the business. He launched an aggressive on-line marketing plan, and implemented an innovative customer service and scheduling system. His business covers 4 territories in Houston with a recent addition in San Antonio, where he turned the struggling location around increasing sales to over 500% in less than a year. Masroor hired an additional 6 technicians to accommodate his rapid growth rate and after his first full year in operation, was recognized by Sears Home Services Garage Solutions as the fastest growing franchise in 2010 and the 4th largest franchise (out of 45 Sears franchises) in the network. He was distinguished as the youngest owner to run the fastest growing franchise across the entire Sears franchise network covering carpet cleaning, garage solutions and home services.
Today, Masroor’s business continues to grow and expand with a new location, a staff of 20 employees, and a new product line. They now offer a vast selection of customizable storm, patio, and front entry doors.
Masroor continues to develop his mentoring skills and keeps active in business organizations. He is a member of the Advisory Board for Sears’ franchises and is a member of the Greater Houston Partnership-Business Leadership Council, Texas State CPAs and Private Equity and Venture Group. He was the 2012 SBA Houston District Young Entrepreneur of the Year.
Sears Garage Solutions of Houston is located at 10122 Long Point Rd, Ste. A, Houston, TX 77043. For more information, visit their website at http://www.searsoverheaddoorhouston.com. For information about SBA and the UH SBDC’s programs and services, visit http://www.sba.gov and http://www.sbdc.uh.edu.