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Cityscape: Is car wash industry becoming flooded?

Government and development coverage and analysis

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Take a bow, SRAC!

In the weeks since I posted my first beat page, I had the great pleasure of reading an original poem at the Springfield Regional Arts Council’s Ozzie Awards.

The Oct. 22 event was a return as a live gala after two years away due to the pandemic.

My poem was in honor of award winner Ruth Barnes, a dancer, choreographer, collaborator and teacher of dance. Other honorees included Terry Chase, who creates natural history models for museums throughout the country; Tom Everett, who provides financial strategies for arts organizations; Grupo Latinoamericano, a Hispanic cultural and dance collaborative; Mike Smith, host of KSMU-FM’s “Seldom Heard Music,” which highlights the Ozarks bluegrass genre; and Ashley Paige Romines, artistic director of the Springfield Ballet.

I’m privileged to have an audience for my journalistic writing here in these pages, but it was a special pleasure to share my poetry in such august company. I served as Missouri’s Poet Laureate 2019-21 but the coronavirus pandemic limited my chance to promote poetry during that time, even here locally.

The Ozzies were back – and so was I. It was quite a night.

I heard … 

We’re getting closer and closer to a Springfield City Council discussion and vote on Forward SGF, which, if passed this month, will be the city’s comprehensive plan for the next two decades.

Have you ever wondered why a map of Springfield looks a bit like ”The Blob That Ate Springfield”? It’s because of something called flagpole annexation, where a narrow strip of land, typically along a roadway, connects an outlying parcel with the main part of the city so that all parts are contiguous.

“We don’t do it haphazardly – it takes a lot of analysis and a lot of study,” Springfield Principal Planner Randall Whitman said. “We want to provide something beneficial to the property owners that also benefits the existing city.”

In other words, the comprehensive plan may smooth out some corners of the map.

Is car wash industry becoming flooded?

Springfield's seventh Mister Car Wash, a publicly traded company with over 440 locations, was constructed earlier htis year. SBJ photo by Katelyn Egger.

The Springfield area is seeing a proliferation of new car washes.

This year in my weekly From the Ground Up report, I’ve covered construction of McBee’s Coffee N Carwash at 1212 W. Kearney St. and a seventh Mister Car Wash at U.S. Highway 65 and Mill Street.

Two more Take 5 Car Wash locations are coming, one to 600 S. Glenstone Ave. and the other in the 2800 block of North Kansas Expressway, and the independently owned SB Waterworks LLC is new to Bolivar, at 1100 E. Broadway St.

Local company Blue Iguana Car Wash LLC embarked on three new locations this year, with two now open at 4304 S. Fremont Ave. and 2118 E. Kearney St. Another is coming on West Kearney, with more locations planned. I’m probably missing some.

Why so many car washes?

I called Greg Byler, co-owner of Blue Iguana with wife Robin, to ask if he could explain the explosion in the industry. Byler told me it all comes down to private equity.

Greg Byler: Private equity investors may be overplaying their hand.

“If you understood the amount of money that was behind all of this, it becomes more than just a car wash,” he said. “There are so many zeroes at the back of these numbers. It is insane.”

Byler said private equity firms used to put their money in strip malls. Now, he said, everyone is ordering from Amazon.com, which means investors have turned their attention to services.

“You can’t buy a car wash on Amazon. You can’t buy a self-storage unit on Amazon, at least not yet. They can’t put their money where they used to, so they’re doing this,” he said, also identifying veterinary clinics and dentist’s offices as attractive to private equity.

Byler knows – he’s sold some of his out-of-town car washes to private equity firms.

“I used to have car washes up in St. Louis,” he said. “I got pictures this morning from what was one of my prized possessions, and sure enough, it just doesn’t look good. Nobody’s taking care of it. It’s just atrocious.”

Equipment is broken and there’s only one worker, he said. Byler told me he’d been to all but one of his car washes on the morning we talked.

“You have my cell phone number,” he said. “If you see something not working right or if someone’s not appropriate to you – that means they should be smiling at you – anything that’s not quite right, you let me know.”

Byler said private equity firms aggregate cash from multiple investors, and then they roll up (that’s the term they use) as many car washes as they can for the money. Often, they end up selling their investments multiple times, so a set of car washes is then bought by another private equity firm, always at a profit.

Meanwhile, third-party developers build car washes in cities all over the country.

“These private equity guys are smart guys, but there’s also 2.0 smart and 4.0 stupid,” he said. “This is where they’re overplaying their hand, and I hope they don’t take us all down with them.”

IBISWorld estimates the U.S. market size for the car wash and auto detailing industry at $14.7 billion in 2022. The industry has grown 2.1% per year on average 2017-22 – slower than the economy overall. However, the Berkshire Hathaway-owned Business Wire press service projects the market size will reach $38.6 billion by 2030 with a compound annual growth rate of 3.1% over that period.

Census Bureau figures show 70% of U.S. automobile owners started using car washes instead of washing their cars at home in the last decade, with 8 million vehicles taking to those tunnels every day.

It’s a dirty job, but more and more investors stand ready to do it.

Make It New

My background is in creative writing, which seems several worlds away from business. But we poets tend to share a single driving belief about writing and thinking: Make it new.

The principle should strike a chord for business, as well. The corporate world prizes few things as highly as a new idea – for a product, a process or a fresh approach.

Novelty has worth. Try sitting in a new chair or facing a different direction, and you might find that a different perspective can spur fresh thinking.

I’m lucky to work in a place where creativity is highly prized. Sometimes an idea pans out and sometimes not, but it’s always received with respect and consideration in my workplace.

We at Springfield Business Journal hosted the fifth event in our Economic Growth Series on Oct. 26. People Centric Consulting Group CEO and coach Don Harkey introduced us to the concept of the “sansdemic,” coined from the Latin “sine,” meaning without, and the Greek “demos,” meaning people. We’re heading for a period “without people.” Soon, through boomer retirements and declining birth rates among the rest of us, we will arrive at a time when there just won’t be enough workers.

You can bet good money – and, in fact, you probably are betting money in your retirement accounts – that we will need fresh approaches to deal with the challenges ahead. Undoubtedly, your business will have to take some risks.

Harkey reported that in addition to record low unemployment, we are seeing a record-high quit rate, at 3% per month, and 75% of the workforce is looking for a new job. The challenge employers face is to engage workers and let them solve problems together.

How are you rewarding creativity in your workplace? Are suggestions welcome? What about critiques? And are you prepared to try something new and fail miserably in the attempt? Will you offer your workers the same room for growth?

I offer a test: If there is a person at your workplace who doesn’t have a voice in decision-making, go to them and ask for their best idea. What are they seeing from the cubicle that you’re missing in the boardroom? They might have an insight to save you money, time or increasingly precious people power.

And here’s a bonus test: If there is a person at your workplace who doesn’t have a voice in decision-making, why in the world do you want to operate like that in the first place?

Creativity abounds. The wise employer is open to all it has to offer. And creativity may separate the winners and the losers in business as we work through the coming sansdemic.

Contact Karen Craigo
Phone: 417-340-3224
Email: kcraigo@sbj.net
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