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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.)