Well there are a couple sides to the coin here. hmm accidental pun
is it possible to prove income that was not reported? Sometimes yes, Many timers have coin counters in them, some are resetable some are non resetable. This can be used to substantiate income sometimes; for example one client had replaced all timers 14 months prior, by totaling up the coin counts we had a good idea of the volume in the bays. Not flawless but sometimes it will work.
Should you declare all income? according to the IRS, yes of course, to each his own though. BUT, if you are planning on selling within 2-3 years then absolutely YES. A typical wash with land will sell for around 4x gross income. If you report another $10,000 gross this may cause say $3,000 in taxes but will increase the value of the wash by around $40,000. Even though the buyer may want to believe your figures he will not pay full price for anything that cannot be substantiated. Would you? compare it to an apartment building claiming 3% vacancy…can they prove it? If not, you use your own figure of 10% or whatever to calculate with. Same thing.
I am just just a lurker on the board here but you happened to ask a question about my industry. I am a partner in a car wash equipment & supply distributor in the Southeast.
Car washes can be an excellent investment if done properly. Especially for an owner/operator. Non-participating owners however are likely to have theft problems as mentioned. If you won’t be able to visit the wash at least 2 or 3 times a week then it probably is not a good idea. If you can visit it daily that is best.
Like any other business, if it is done properly it can be quite profitable, if done incorrectly it can be a poor investment.
If you would like some more info, feel free to email me or call me at 1-888-WASH-BY-U. I have some “new investor” info that may help you. If you (or anyone else) is in my area I’d be glad to work with you. If not, I may be able to recommend someone fairly local to you.
Posted by PBoone on February 29, 2000 at 15:12:59:
Upside - all cash=claim the profit you want
downside - all cash = difficult to find a trustworthy person to collect the money therefore you are tied to the change machine for replenishment.
We purchase these types of businesess for rehab and flipping after a period time.
Posted by RobertR CO on February 29, 2000 at 21:20:12:
PBoone,
Would you expand on the following statement: “therefore you are tied to the change machine for replenishment.” How does that solve the problem of cashiers stealing cash?
I would think that a second challenge would be finding and retaining reliable employees in a relatively low paying job (wiping cars). Our unemployment rate is at a record low.
Congratulations on you business turnaround successes.
In a self-service car wash there are no cashiers, and also no “hand dryers” there are only one or two attendants on the payroll. What you are refering to is a "full-service " car wash where you pull up, get out of your car and get it back cleaned up 10-30 minutes later.
A typical employee in a self-service car wash is an elderly retired gentleman who is bored or needs a little more income. He is generally paid a small salary or $5-8/ hour (highly dependant on area) and normally “off the books” so you don’t mess up his social security.
The number one key to prevent theft is to handle all money yourself! I know of some cases where even relatives (brothers, nephews, etc) have stolen from owners. If it is necessary to give others access to money, normally to refill the change machine, have a non-resetable counter on it so you can double check the numbers (some come with this standard).
As for the change machine statement, I am going to guess that he is refering to the fact that most money deposited comes out of the change machine (the bills that is) a lot of the quarters from the bays are just recycled through the changer.
Shrug, just thought I’d try to help to clarify this.
