Did you know in Malaysia, car wash and detailing centers are one of the least hands-on business in terms of involvement in managing an invested business by owner(s)? Like every other businesses, proper management system and control is vital for smooth daily operation and problem solving.
In this blog, we are going to discuss about the top 5 common operation problems and risks commonly found in car wash and detailing centers faced by many business owners.
The first rule of thumb in any investment is that you understand the risk and return of the subject before investing your hard earned money. Be sure to read more about the preparation required before starting up a car wash or detailing center in our previous blog.
If you are currently or soon-to-be running a car wash or detailing business, this article will definitely benefit you to improve, protect and circumvent several common risk and issues faced by this industry.
1) Improper handling and processing of your client’s car
Imagine polishing a car into its best condition, with sweat pouring non-stop for over 6 hours, and your hardworking staffs took minimum break time so that the car can be delivered in time. All these, only to meet with the owner who is extremely dissatisfied with your service and insisted that your staffs damaged his/her car with all the sudden defects spotted by him/her.
The slightest existing defect on the car turns highly visible once it undergoes a proper paint restoration process; much like how it is easier to spot a stain on a clean and plain white shirt. Swirls, defects and embedded dirt can often mask the surface of a paint and standout more when the car has been detailed.
At times, there will be patrons who would claim that items are missing from their vehicle too.
This eats into your business reputation and profit, and possibly a bad rating that would stick permanently on your business site as well.
Recommendation: To avoid this from happening, proper inspection of vehicle is suggested. Inspect the vehicle upon receiving, and after washing it. The good news is that we have prepared a preemptive checklist to help avoid cases such as this. Make sure owner signs it to prevent any dispute during collection.
CLICK HERE to download the checklist.
2) Loss of profits and stocks
Lost of businesses and profit may come in various form, the most prevalent loss in this industry that many business owners are facing includes:
a) Unrecorded business sales
b) Lost of chemicals (consumable goods)
c) Jacked up prices of consumable goods.
Earlier this year, we found out that one of our customer who runs a shop based detailing business noticed the higher operational cost and drop in his business. A quick investigation exposed that his employees have been pocketing money by acting as a middlemen.
His dishonest employees managed to profit from jacking up the price of the goods by claiming a higher price of product prices. The usage of the products and the business also had a huge mismatch. Later on, he discovered that his employees was selling a few products by siphoning the products out from the packaging. In addition, many sales were suspected to be not recorded as many transactions were made in cash. All these happened despite having security cameras installed at his premise.
The estimated loss of profit and goods were estimated at RM1,600.00 monthly. He believed this fraudulency has been going for more than 9 months.
Recommendation: While hiring a trustworthy person to look after your business may reduce chances of fraud and embezzlement, the only way to truly eradicate such event from happening is to have cashless based payment. With the growing trend of cashless based payment, many platforms can be utilised to incentivize and encourage customers to migrate into this platform.
To combat lost of products and stocks, we recommend establishing a guideline for products’ usage. For example, a litre of OSREN Paint Restorer 51 is sufficient for approximately 10+/- cars for a quick “polish and wax” approach. While different product may suggest different amount of usage, the idea is to be familiar with the average usage of product to make a calculated guess to monitor the goods of the company. It is not always the case of x=y. However, the usage of product can be a good indication on inflow of cars.
To stamp out “middlemen” cost, always insist on official receipt from the company or supplier and ensure that is kept and well documented for accounting purposes.
3) Human Resource, Skills and Experience
Like every other businesses which are not spared from taking competitive approaches to stay relevant in rendering bang-for-buck services, hiring an employee in this industry can prove to be challenging. In aspect to skills and workmanship, the correlation between wages and skills grow in tandem. In this particular industry, quality of service is determined by the ability to restore car to its best condition, and the struggle is always in reaching an equilibrium that is cost effective for business.
Good candidates can be limited in this industry, and the ability to be able to deliver certain services relies on employees’ knowledge and experience.
Paint restoration process can be complicated for some, for others, it takes time and patience to truly master the necessary skill to be considered as a professional.
Recommendation: The most valuable capital in a company is always human capital. It does not reflect productivity or determine the quality of service, but can be achieved later through training, capital equipment and motivation.
Investing in training employees on the long run benefits and strengthens the company performance and image.
4) Disorganised workflow and overlapping roles (or the lack thereof)
It’s popular that in our culture, everyone is expected to adopt the “one leg kick” method (a job that requires someone to do everything) in a startup company. Many struggles and juggles between different roles and often find that completing a specific task takes forever. Even for cooks, is it necessary for one or more kitchen helpers who does the non-cooking tasks.
For example, not having a sales representative in the premise to handle and manage customer’s expectations – The lifeline of a business depends on sales, and the absence of an individual attending to prospects is a recipe for disaster.
It is also recommended to exclude hands-on employees to manage customer’s request or enquiry as it would consume their time allocated to complete their job. Think of your hands-on guys as kitchen crew while the manager as a captain or waiter attending the front. It requires equal delegation and non-overlapping of task to specific department/individuals to ensure smooth customer experience.
Recommendation: We suggest having a local manager to manage several delicate task that requires people’s skill and familiar with the local’s culture.
The manager or supervisor should be able to perform and deliver the following:
•Able to upsell and cross-sell detailing packages
•Communicate and connect well between employees and customers
•Manage schedules and appointment of incoming vehicles
•Has sufficient detailing skills to troubleshoot detailing problems
By segmentising different roles and responsibilities to different individuals, it will also help in narrowing down which area can be further improved or where problem arises.
5) Wellbeing And Safety Of Working Environment
This is often overlooked in this industry; often recognised, but neglected. The constant exposure to volatile compounds throughout long hours and weeks is hazardous to handlers. On long term exposure, this can lead to respiratory issues or skin inflammation which require medical attention.
There has also been cases where improper upkeep of premise have lead to customers slipping and sustaining injury. Definitely a major drop down (pun intended) on customer’s experience. Needless to say, the injury would not only be upon the person who felt, so will the business too.
Safety of the working environment and the wellbeing of the employee also have direct impact on the company’s image and branding impression. Well taken care employees are happier (more willing to contribute positively), more productive, loyal and are more engaged. A well maintained premise also means that more confidence can be instilled among customers.
Recommendations: Ensure safety and wellbeing of employees are taken care of, including providing gloves, mask, safety rubber boots and first aid kit. The working environment should also prioritise on safety of people who will be patronising the premise.
Using the right products also means that there is minimisation of health risk at play.
A good management and operation flow is vital in a car wash and detailing centers to grow their businesses successfully. It allows for more resources and efforts to be spent on focusing and convincing customers.
A poorly managed center would lead to more frustration and diverted focus of effort and energy.
As the chinese proverb goes: “The marketplace is a battlefield”.
It is wiser to compete in the battlefield than to struggle with a battle within ourselves.