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Truck Detailing Shop Business Case Study
As an entrepreneur you can learn a lot by following the real life case studies of other entrepreneurs. Often the text books in school leave out the beginning details and the juicy part of how it all comes together and is created out of nothing but a thought. I have an interesting case study for you and it explains how my company got into the truck detailing business. This is a funny story.
We had a franchisee in Colorado who had a contract to wash for several Used Truck Dealers and cleaned all the trucks for sale. He owned one of our Fleet Truck Washing Franchises; www.truckwashguy.com . The truck sales company offered us work to detail trucks because his detailers could not keep up the volume. Trucking and used truck sales in 98 was up 22% and up 23% in 99. The companies servicing these companies had labor problems, which we have figured out already. In this market we must compete like barracudas for good labor. We took the business offered and immediately were able to improve quality and handle their overflow. Soon we were detailing and washing everything. Similar Stories have happened in Nashville, and OH with our expanding tuck washing services in those markets. We started a full-service refurbishing center charging $1,000.00 to de-identify, re-stripe and detail Semi trailers and we started detailing trucks for $500.00 each. Soon we had 2-3 per day and trailers too. First month the business did $23,000.00 at the Truck Detail Shop. Second month same thing.
Then we had to figure out how to keep margins up with the mobile truck washing, with no shop, no lease , no building. But our margins were under 30%. Totally frustrated and trying to convert labor to commission instead of salary or hourly helped, but it was not good enough. Our franchisees brought in a Manager of a Detail Shop in another area for 8 years and we got it u-p to 35%. We did not have time to perfect our prototype before a few nationwide companies asked us to do all their offices. So we began other offices before we had our prototype is perfected.
It is a good business, but we are not satisfied and we must push forward until we perfect it. Our customers are driving us forward and we need to franchise just to keep up with the new business. We need to work on this business it is not ready yet. So we will offer it to current team members who understand that and hopefully we can make this work. Meanwhile there is tons of work out there and we do not want to miss our share of it. In OH we detailed ALL the trucks for the Penske Challenge 2000. They requested us by name. We were ready in January 2001 to franchise this and roll out the First Truck Detailing franchise ever created. Our biggest problem then was there is no way to know what this business will do in different areas, due labor differences, going price in that market, and Independent competition. We only know there is work for our team. We will not sell a franchise until we fill confident that it is a good business. Every trucking company, independent trucker, trailer leasing company would be our customer. Paint frames, polish tanks, buff, wax, interiordetailing of trucks. We had to please our customer so we started this company. It has been a challenge to us; we are working through this.
Sometimes it is the trial and tribulations along the way, which makes the victory so sweet when it is achieved. For our team it is about winning. But in franchising, everyone must win. So far in this potential franchise system The Customer is Winning, WashGuy.com wins by using this service as a chance to strengthen our market dominance in the trucking industry. Now all we must do is make sure the franchisee can win. If and when we do that we will be ready to go for it.
It is a damn good thing we did not franchise in 2001, because the used truck market fell to pieces and we were down to 1-2 details per used truck dealer in Denver per week. Some weeks nothing, so we closed the shop. Trucking is back up to speed but with high fuel prices used trucks are not as hot a new ones. One thing this case study shows is that even if you have the world by the balls you still must deal in reality and be ready for a market sector to fall out. We were smart to have waited and luckily we did. In franchising having 10 or 12 franchisees all brand new out there and have the market change on you could wind you up in lawsuits and failed franchisees.
Examples of markets changing recently are some of the fast food type franchises with fattening foods when everyone changed to low carb diets. Krispy Kreme got creamed, Schlotski's deli filed bankruptsy and all the fast food franchise took a hit for a couple of intense quarters as the Atkins Diet and South Beach Diet books rocked the best seller list.
I do not care how smart you are, what business degree you have or where your family name came from. You must pay attention to the market sector, economic factors and above all watch the details; even in the detailing business. Think on this. I hope you have enjoyed today's real life case study.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
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