Created and Written by Car Wash Advisory Team
Created and Written by Car Wash Advisory Team
If you are looking to determine the value of a car wash business – you’re in the right place. Determining what a car wash is worth, although not rocket science, certainly has multiple layers and nuances. Car Wash Valuation is admittedly a bit more complex than just a single simple equation or calculation.
This quick definitive guide will serve as an abbreviated reference point for those looking to quickly uncover at what prices and valuations carwashes transact. The nuances that exist and accompany car wash valuation cannot be even near fully covered in a single infographic such as this. These more subtle points and nuances, especially those which are more qualitative than quantitative, can impact valuation quite drastically – so please be aware of such.
This is a quick start reference guide for those looking to understand the most basic level of car wash valuation.
For more complete and comprehensive information on car wash valuations, check out our learning center.
Revenue level largely influences the likely buyer type and in-turn impacts valuation multiples.
Some washes may not be high volume and high revenue capable, but would require a conversion or revamp to be such. These washes blend the lines in valuation.
Type of wash is important, even if the wash and site could be a convert to a different wash type. Current wash model has a large impact on valuation levels.
Wash type also influences the likely buyer universe.
Figures in graphic above represent multiple of last twelve months of revenue - i.e.: "2.0X" means (car wash gross sales over last 12 months) X (2.0x) = Valuation - i.e.: A car wash that produced $500k of revenue during the last 12 months and with a "2.0X" valuation multiple has a wash value of $1mm (inclusive of real estate).
If you’re a current car wash owner and operator, know that the process of selling your car wash should include far more in-depth and comprehensive analysis. Despite what method you decide to use to sell your car wash, it’s important that a full valuation analysis be done. If you’re utilizing a third party such as a broker to sell your car wash, it behooves you to ensure that they are well equipped, capable and knowledgeable enough to run full comprehensive valuation analyses. This requires a firm understanding of the quantitative, but also the many qualitative aspects specific to your car wash.
If you’re a multi-site owner, your most likely best served through a traditional M&A Advisory process when selling as opposed to a more standard brokerage approach. Regardless, the same is true. General and naive multiple application is far from the whole story and much more is necessary to get to the true valuation of your carwashes. This type of more detailed and complete valuation is truly the only way to uncover and achieve maximum value for your car washes during a sale process.
If you’re a buyer looking to acquire a car wash, the same applies. This quick definitive guide does not take into account many points which ultimately do go into a true, fair, and prudent valuation and willingness to pay analysis.
With us being on the mission of truly illuminating car wash valuations, and the processes and methodologies which underly such, stay tuned for our upcoming multi-part series “What’s My Car Wash Worth?”. This larger series will cover very in-depth and deep dives into the specific topics of car wash valuation methodologies, applicable buyer universes and the impact of such on valuations, valuation modifiers, and finally a full quantitative analysis of years of car wash valuations over time to show true empirically-backed, adjusted, and normalized carwash transaction valuation multiples.
For now, this quick guide will provide you with a reference point of car wash prices and valuation multiples in today’s market. Please stay tuned for more coming soon.
Several factors work into the valuation of a car wash business. Two of the most important factors regarding the valuation of a car wash business are how much revenue the car wash generates, as well as the type of car wash that it is. There are multiple types of car washes, and some are more valuable to potential buyers than others. In the case of a car wash valuation, these different car wash types are known as wash models.
The typical value of a car wash business can vary greatly depending on machinery, features, real estate, and more. At Car Wash Advisory, our team can help you further understand the value of a car wash business and why it may be listed at the price it is. To learn more about the cost of purchasing a car wash, contact the team at Car Wash Advisory today.
The key reasons using an investment bank to sell your business during economic uncertainty is a strategic decision.
The key reasons using an investment bank to sell your business during economic uncertainty is a strategic decision.
