Do you own a car wash business and want to know how much it is worth? Or are you looking to buy or sell a car wash and need to estimate its value? If you answered yes to any of these questions, then this article is for you.
In this article, we will show you how to value a car wash business using various methods and metrics, such as cap rate, EBITDA multiple, revenue multiple, and SDE multiple. You will also learn the factors that can influence your car wash valuation, the average values and ranges of different types and models of car washes, and some expert tips and insights on how to sell or buy a car wash.
By the end of this article, you will have a better understanding of how to value a car wash and what to expect from the valuation process. Whether you are a seller, a buyer, or a broker, this article will help you make informed and confident decisions about your car wash business.
How to Value a Car Wash
Car wash valuation is the process of estimating the worth of a car wash business based on various factors, such as its size, wash model, membership program, ESG performance, and market conditions. Car wash valuation is important for several reasons, such as:
- It helps you determine the fair market value of your car wash business and set a realistic asking or offer price.
- It helps you negotiate the best deal possible with potential buyers or sellers and avoid overpaying or underselling your car wash business.
- It helps you assess the financial health and performance of your car wash business and identify areas of improvement or growth.
- It helps you plan for the future and set goals and strategies for your car wash business.
There are four main methods and metrics for car wash valuation: cap rate, EBITDA multiple, revenue multiple, and SDE multiple. Each method and metric has its own advantages and disadvantages, and they can be used separately or together to get a more accurate and comprehensive valuation. Let’s take a look at each method and metric in more detail.
Cap Rate
Cap rate, or capitalization rate, is the ratio of the net operating income (NOI) of a car wash business to its value. NOI is the income generated by the car wash business after deducting all operating expenses, such as rent, utilities, wages, supplies, maintenance, taxes, and insurance. Cap rate is expressed as a percentage and can be calculated using the following formula:
$$\text{Cap rate} = \frac{\text{NOI}}{\text{Value}}$$
For example, if a car wash business has an NOI of $300,000 and a value of $3,000,000, then its cap rate is 10%.
Cap rate is a simple and easy way to measure the return on investment (ROI) of a car wash business. It shows how much income a car wash business generates relative to its value. A higher cap rate means a higher ROI and a lower value, while a lower cap rate means a lower ROI and a higher value.
The advantage of using cap rate is that it is easy to calculate and understand, and it can be used to compare different car wash businesses with similar characteristics and market conditions. The disadvantage of using cap rate is that it does not account for the growth potential and profitability of the car wash business, and it can be affected by external factors, such as interest rates, inflation, and demand.
EBITDA Multiple
EBITDA multiple, or earnings before interest, taxes, depreciation, and amortization multiple, is the ratio of the value of a car wash business to its EBITDA. EBITDA is a measure of the earnings of a car wash business before deducting interest, taxes, depreciation, and amortization. EBITDA multiple is expressed as a number and can be calculated using the following formula:
$$\text{EBITDA multiple} = \frac{\text{Value}}{\text{EBITDA}}$$
For example, if a car wash business has a value of $4,000,000 and an EBITDA of $600,000, then its EBITDA multiple is 6.67.
EBITDA multiple is a widely used and popular way to measure the value of a car wash business. It shows how much a car wash business is worth relative to its earnings. A higher EBITDA multiple means a higher value and a lower earnings, while a lower EBITDA multiple means a lower value and a higher earnings.
The advantage of using EBITDA multiple is that it reflects the earnings of a car wash business before deducting interest, taxes, depreciation, and amortization, which can vary depending on the accounting methods and capital structure of the car wash business. The disadvantage of using EBITDA multiple is that it can be manipulated and distorted by adding back or excluding certain expenses or income, and it does not consider the cash flow and debt of the car wash business.
Revenue Multiple
Revenue multiple, or sales multiple, is the ratio of the value of a car wash business to its revenue. Revenue is the income generated by the car wash business from its sales or services. Revenue multiple is expressed as a number and can be calculated using the following formula:
$$\text{Revenue multiple} = \frac{\text{Value}}{\text{Revenue}}$$
For example, if a car wash business has a value of $2,500,000 and a revenue of $1,500,000, then its revenue multiple is 1.67.
Revenue multiple is a simple and consistent way to measure the value of a car wash business. It shows how much a car wash business is worth relative to its revenue. A higher revenue multiple means a higher value and a lower revenue, while a lower revenue multiple means a lower value and a higher revenue.
The advantage of using revenue multiple is that it is simple and consistent, and it can be used to compare different car wash businesses with similar characteristics and market conditions. The disadvantage of using revenue multiple is that it does not consider the expenses and margins of the car wash business, and it can be affected by external factors, such as seasonality, competition, and demand.
SDE Multiple
SDE multiple, or seller’s discretionary earnings multiple, is the ratio of the value of a car wash business to its SDE. SDE is a measure of the earnings of a car wash business after deducting all operating expenses, except for the owner’s salary, benefits, and personal expenses. SDE multiple is expressed as a number and can be calculated using the following formula:
$$\text{SDE multiple} = \frac{\text{Value}}{\text{SDE}}$$
For example, if a car wash business has a value of $3,000,000 and an SDE of $500,000, then its SDE multiple is 6.
SDE multiple is a more accurate and realistic way to measure the value of a car wash business. It shows how much a car wash business is worth relative to its earnings that are available to the owner. A higher SDE multiple means a higher value and a lower earnings, while a lower SDE multiple means a lower value and a higher earnings.
The advantage of using SDE multiple is that it reflects the earnings of a car wash business that are available to the owner, and it can be adjusted for the owner’s salary, benefits, and personal expenses, which can vary depending on the owner’s preferences and lifestyle. The disadvantage of using SDE multiple is that it can be subjective and complex to calculate, and it can be influenced by the owner’s involvement and management style.
Factors That Can Influence Your Car Wash Valuation
The value of a car wash business is not only determined by the methods and metrics discussed above, but also by the factors that can influence its performance and potential. There are 10 factors that can affect your car wash valuation, and they are:
- Size
- Membership Programs
- ESG Performance
- Wash Model
- Profitability
- Location
- Customer Base
- Equipment and Facilities
- Growth Potential
- Capital Structure
Let’s take a look at each factor in more detail.
Size
The size of a car wash business is measured by the land area and the building area that it occupies. The size of a car wash business can affect its value, as it can indicate its capacity, efficiency, and visibility. Generally, larger car wash businesses have higher values and revenues, as they can accommodate more customers, offer more services, and attract more attention. However, larger car wash businesses also have higher costs and maintenance, and they may face more zoning and environmental regulations.
The average size of a car wash is about 1 acre, but the size can vary depending on the type and model of the car wash. For example, full-service car washes tend to have larger sizes, as they require more space for the conveyor, the tunnel, the vacuum area, and the waiting area. Express car washes tend to have smaller sizes, as they only need space for the conveyor and the vacuum area. Flex car washes can have medium sizes, as they can offer both full-service and express options. In-bay and self-service car washes can have the smallest sizes, as they only need space for the bay and the equipment.
Membership Programs
Membership programs are subscription-based services that allow customers to pay a monthly or annual fee to access unlimited or discounted car washes. Membership programs can affect the value of a car wash business, as they can increase the customer loyalty and retention, as well as the recurring revenue and cash flow. Generally, car wash businesses with strong membership programs have higher values and multiples, as they can generate more stable and predictable income, and reduce the dependence on weather and seasonality.
The average membership fee for a car wash is about $20 per month, but the fee can vary depending on the type and level of service and the market demand. For example, full-service car washes can charge higher fees, as they offer more comprehensive and personalized services. Express car washes can charge lower fees, as they offer more convenient and fast services. Flex car washes can offer different tiers of fees, depending on the customer’s preference and budget. In-bay and self-service car washes can also offer membership programs, but they are less common and popular.
ESG Performance
ESG performance, or environmental, social, and governance performance, is a measure of the sustainability and responsibility of a car wash business. ESG performance can affect the value of a car wash business, as it can enhance the reputation and competitiveness of the car wash business, as well as reduce the environmental and social risks and costs. Generally, car wash businesses with high ESG performance have higher values and multiples, as they can attract more customers, investors, and partners, and comply with more regulations and standards.
The average ESG score for a car wash is about 50 out of 100, but the score can vary depending on the criteria and indicators used to measure the ESG performance. For example, some of the criteria and indicators that can be used to measure the ESG performance of a car wash are:
- Environmental: water consumption, water recycling, water quality, energy consumption, energy efficiency, renewable energy, greenhouse gas emissions, waste management, chemical use, noise pollution, etc.
- Social: customer satisfaction, customer safety, customer privacy, employee satisfaction, employee safety, employee training, employee diversity, community engagement, social impact, etc.
- Governance: ownership structure, management structure, board composition, board independence, board diversity, board oversight, ethics and compliance, transparency and disclosure, stakeholder engagement, etc.
Wash Model
Wash model is the type and level of service and customer experience that a car wash business offers. Wash model can affect the value of a car wash business, as it can determine the operational efficiency and profitability of the car wash business, as well as the customer demand and preference. Generally, car wash businesses with more advanced and modern wash models have higher values and multiples, as they can offer more value and convenience to the customers, and reduce the labor and maintenance costs.
The most common wash models for a car wash are:
- Full-Service: A full-service car wash offers a complete and thorough cleaning of the exterior and interior of the car, including the windows, mirrors, dashboard, seats, floor mats, trunk, etc. A full-service car wash usually involves a conveyor, a tunnel, a vacuum area, and a waiting area. A full-service car wash can charge higher prices, as it offers a higher level of service and customer satisfaction, but it also has higher costs and labor requirements, and it can take longer time to complete.
- Express: An express car wash offers a quick and efficient cleaning of the exterior of the car, including the body, wheels, tires, etc. An express car wash usually involves a conveyor and a vacuum area. An express car wash can charge lower prices, as it offers more convenience and speed to the customers, but it also has lower margins and revenues, and it can face more competition and price sensitivity.
- Flex: A flex car wash offers a flexible and customizable cleaning of the exterior and interior of the car, depending on the customer’s choice and preference. A flex car wash usually involves a conveyor, a tunnel, a vacuum area, and a waiting area. A flex car wash can offer different options and packages, such as express, full-service, or add-ons, to the customers, and charge accordingly. A flex car wash can have higher values and multiples, as it can cater to different customer segments and needs, and optimize the capacity and profitability of the car wash.
- In-Bay: An in-bay car wash offers a stationary and automated cleaning of the exterior of the car, using high-pressure water jets, brushes, dryers, etc. An in-bay car wash usually involves a bay and a payment terminal. An in-bay car wash can operate 24/7, as it does not require any staff or supervision, but it also has lower quality and customer satisfaction, and it can face more wear and tear and vandalism.
- Self-Service: A self-service car wash offers a manual and self-operated cleaning of the exterior and interior of the car, using hoses, sprayers, brushes, vacuums, etc. A self-service car wash usually involves a bay and a coin-operated machine. A self-service car wash can have lower costs and maintenance, as it does not require any staff or equipment, but it also has lower demand and revenue, and it can be affected by weather and seasonality.
Profitability
Profitability is the measure of the financial performance and success of a car wash business. Profitability can affect the value of a car wash business, as it can indicate its efficiency, growth, and potential. Generally, car wash businesses with higher profitability have higher values and multiples, as they can generate more income and cash flow, and reinvest in the business.
The most common profitability metrics for a car wash are:
- Gross Profit Margin: The ratio of the gross profit to the revenue of a car wash business. Gross profit is the income generated by the car wash business after deducting the cost of goods sold (COGS), such as water, chemicals, supplies, etc. Gross profit margin is expressed as a percentage and can be calculated using the following formula:
$$\text{Gross profit margin} = \frac{\text{Gross profit}}{\text{Revenue}}$$
For example, if a car wash business has a revenue of $1,200,000 and a COGS of $300,000, then its gross profit is $900,000 and its gross profit margin is 75%.
Gross profit margin shows how much of the revenue is left after paying for the direct costs of the car wash business. A higher gross profit margin means a higher efficiency and profitability, while a lower gross profit margin means a lower efficiency and profitability.
- Net Profit Margin: The ratio of the net profit to the revenue of a car wash business. Net profit is the income generated by the car wash business after deducting all expenses, such as COGS, operating expenses, interest, taxes, depreciation, amortization, etc. Net profit margin is expressed as a percentage and can be calculated using the following formula:
$$\text{Net profit margin} = \frac{\text{Net profit}}{\text{Revenue}}$$
For example, if a car wash business has a revenue of $1,200,000 and a net profit of $300,000, then its net profit margin is 25%.
Net profit margin shows how much of the revenue is left after paying for all the costs of the car wash business. A higher net profit margin means a higher profitability and success, while a lower net profit margin means a lower profitability and success.
- Return on Assets (ROA): The ratio of the net profit to the total assets of a car wash business. Total assets are the resources owned by the car wash business, such as land, building, equipment, inventory, cash, etc. ROA is expressed as a percentage and can be calculated using the following formula:
$$\text{ROA} = \frac{\text{Net profit}}{\text{Total assets}}$$
For example, if a car wash business has a net profit of $300,000 and a total assets of $2,000,000, then its ROA is 15%.
ROA shows how well a car wash business uses its assets to generate profit. A higher ROA means a higher efficiency and profitability, while a lower ROA means a lower efficiency and profitability.
- Return on Equity (ROE): The ratio of the net profit to the total equity of a car wash business. Total equity is the difference between the total assets and the total liabilities of the car wash business. Total liabilities are the obligations owed by the car wash business, such as loans, mortgages, leases, etc. ROE is expressed as a percentage and can be calculated using the following formula:
$$\text{ROE} = \frac{\text{Net profit}}{\text{Total equity}}$$
For example, if a car wash business has a net profit of $300,000 and a total equity of $1,000,000, then its ROE is 30%.
ROE shows how well a car wash business uses its equity to generate profit. A higher ROE means a higher profitability and growth, while a lower ROE means a lower profitability and growth.
Location
Location is the physical place where a car wash business operates. Location can affect the value of a car wash business, as it can influence its visibility, accessibility, and demand. Generally, car wash businesses with better locations have higher values and multiples, as they can attract more customers, charge higher prices, and face less competition.
The most common location factors for a car wash are:
- Traffic: The amount and flow of vehicles and pedestrians passing by or near the car wash business. Higher traffic means higher exposure and potential customers, while lower traffic means lower exposure and potential customers.
- Visibility: The degree and angle of the car wash business being seen by the traffic and the public. Higher visibility means higher awareness and attraction, while lower visibility means lower awareness and attraction.
- Accessibility: The ease and convenience of the car wash business being reached and entered by the traffic and the customers. Higher accessibility means higher convenience and satisfaction, while lower accessibility means lower convenience and satisfaction.
- Demand: The level and trend of the customer need and desire for the car wash business and its services. Higher demand means higher sales and revenue, while lower demand means lower sales and revenue.
The most common location types for a car wash are:
- Main Road: A main road is a busy and major road that connects different areas and destinations. A main road can be a good location for a car wash business, as it can have high traffic, visibility, and demand, but it can also have low accessibility and high competition.
- Side Road: A side road is a less busy and minor road that branches off from a main road. A side road can be a good location for a car wash business, as it can have high accessibility and low competition, but it can also have low traffic, visibility, and demand.
- Shopping Center: A shopping center is a large and commercial area that contains various shops, restaurants, and services. A shopping center can be a good location for a car wash business, as it can have high traffic, visibility, and demand, but it can also have low accessibility and high competition.
- Gas Station: A gas station is a place that sells fuel and other products and services for vehicles. A gas station can be a good location for a car wash business, as it can have high traffic, visibility, and demand, but it can also have low accessibility and high competition.
Customer Base
Customer base is the group of people who buy or use the car wash business and its services. Customer base can affect the value of a car wash business, as it can indicate its loyalty, retention, and growth. Generally, car wash businesses with larger and more loyal customer bases have higher values and multiples, as they can generate more repeat and referral sales, and reduce the marketing and acquisition costs.
The most common customer base metrics for a car wash are:
- Customer Count: The number of customers who visit or use the car wash business and its services in a given period of time, such as a day, a week, a month, or a year. Higher customer count means higher traffic and revenue, while lower customer count means lower traffic and revenue.
- Customer Frequency: The number of times a customer visits or uses the car wash business and its services in a given period of time, such as a day, a week, a month, or a year. Higher customer frequency means higher loyalty and retention, while lower customer frequency means lower loyalty and retention.
- Customer Lifetime Value (CLV): The total amount of money a customer spends or is expected to spend on the car wash business and its services over their lifetime. Higher CLV means higher profitability and growth, while lower CLV means lower profitability and growth.
Equipment and Facilities
Equipment and facilities are the physical and tangible assets and resources that a car wash business owns or uses to operate and provide its services. Equipment and facilities can affect the value of a car wash business, as they can influence its quality, efficiency, and safety. Generally, car wash businesses with newer and better equipment and facilities have higher values and multiples, as they can offer more value and convenience to the customers, and reduce the repair and maintenance costs.
The most common equipment and facilities for a car wash are:
- Conveyor: A conveyor is a device that moves the car through the car wash process, using a chain, a belt, or a roller. A conveyor can affect the speed, capacity, and quality of the car wash service, as well as the customer satisfaction and safety.
- Tunnel: A tunnel is a structure that covers and encloses the car wash process, using a metal, a plastic, or a fabric. A tunnel can affect the weather protection, noise reduction, and customer experience of the car wash service, as well as the environmental compliance and regulation.
- Vacuum: A vacuum is a device that sucks and removes the dirt, dust, and debris from the interior of the car, using a hose, a nozzle, or a brush. A vacuum can affect the cleanliness, convenience, and quality of the car wash service, as well as the customer satisfaction and preference.
- Dryer: A dryer is a device that blows and removes the water and moisture from the exterior of the car, using a fan, a blower, or a heater. A dryer can affect the dryness, shine, and quality of the car wash service, as well as the customer satisfaction and safety.
- Payment Terminal: A payment terminal is a device that accepts and processes the payment for the car wash service, using a cash, a card, or a mobile. A payment terminal can affect the convenience, speed, and security of the car wash service, as well as the customer satisfaction and preference.
Growth Potential
Growth potential is the measure of the future performance and success of a car wash business. Growth potential can affect the value of a car wash business, as it can indicate its opportunities, challenges, and risks. Generally, car wash businesses with higher growth potential have higher values and multiples, as they can increase their sales, revenue, and market share, and improve their competitive advantage and profitability.
The most common growth potential metrics for a car wash are:
- Revenue Growth Rate: The percentage change in the revenue of a car wash business over a given period of time, such as a month, a quarter, or a year. Higher revenue growth rate means higher sales and income, while lower revenue growth rate means lower sales and income.
- Market Size: The total number of potential customers and the total amount of money spent or expected to be spent on the car wash business and its services in a given area and time. Higher market size means higher demand and opportunity, while lower market size means lower demand and opportunity.
- Market Share: The percentage of the market size that a car wash business captures or controls with its sales or services. Higher market share means higher dominance and competitiveness, while lower market share means lower dominance and competitiveness.
- Market Growth Rate: The percentage change in the market size of the car wash business and its services over a given period of time, such as a month, a quarter, or a year. Higher market growth rate means higher potential and opportunity, while lower market growth rate means lower potential and opportunity.
Capital Structure
Capital structure is the mix and proportion of the debt and equity that a car wash business uses to finance its assets and operations. Debt is the money that a car wash business borrows from lenders, such as banks, investors, or suppliers, and has to repay with interest. Equity is the money that a car wash business raises from owners, such as shareholders, partners, or founders, and does not have to repay, but has to share the ownership and profits. Capital structure can affect the value of a car wash business, as it can influence its risk, return, and cost.
The most common capital structure metrics for a car wash are:
- Debt-to-Asset Ratio: The ratio of the total debt to the total assets of a car wash business. Debt-to-asset ratio is expressed as a percentage and can be calculated using the following formula:
$$\text{Debt-to-asset ratio} = \frac{\text{Total debt}}{\text{Total assets}}$$
For example, if a car wash business has a total debt of $1,000,000 and a total assets of $2,000,000, then its debt-to-asset ratio is 50%.
Debt-to-asset ratio shows how much of the assets of a car wash business are financed by debt. A higher debt-to-asset ratio means a higher leverage and risk, while a lower debt-to-asset ratio means a lower leverage and risk.
- Debt-to-Equity Ratio: The ratio of the total debt to the total equity of a car wash business. Debt-to-equity ratio is expressed as a number and can be calculated using the following formula:
$$\text{Debt-to-equity ratio} = \frac{\text{Total debt}}{\text{Total equity}}$$
For example, if a car wash business has a total debt of $1,000,000 and a total equity of $1,000,000, then its debt-to-equity ratio is 1.
Debt-to-equity ratio shows how much of the equity of a car wash business is financed by debt. A higher debt-to-equity ratio means a higher leverage and risk, while a lower debt-to-equity ratio means a lower leverage and risk.
- Cost of Capital: The weighted average of the cost of debt and the cost of equity of a car wash business. Cost of capital is expressed as a percentage and can be calculated using the following formula:
$$\text{Cost of capital} = \text{Weight of debt} \times \text{Cost of debt} + \text{Weight of equity} \times \text{Cost of equity}$$
For example, if a car wash business has a debt-to-asset ratio of 50%, a debt-to-equity ratio of 1, an interest rate of 10%, and a required rate of return of 15%, then its cost of capital is 12.5%.
Cost of capital shows how much it costs a car wash business to finance its assets and operations. A higher cost of capital means a higher expense and hurdle, while a lower cost of capital means a lower expense and hurdle.
How Much is a Car Wash Worth?
Now that you know how to value a car wash and what factors can influence your car wash valuation, you may be wondering how much is a car wash worth in reality. The answer is not simple, as the value of a car wash can vary depending on the type and model of the car wash, the methods and metrics used for the valuation, and the market conditions and demand.
However, based on the data and research from various sources, such as car wash brokers, consultants, and industry reports, we can provide you with some average values and ranges of different types and models of car washes, based on the four metrics: cap rate, EBITDA multiple, revenue multiple, and SDE multiple.
The table below shows the average values and ranges of different types and models of car washes, based on the four metrics.
| Type/Model | Cap Rate (%) | EBITDA Multiple | Revenue Multiple | SDE Multiple |
|---|---|---|---|---|
| Full-Service | 8.5 – 12.5 | 4.0 – 6.0 | 2.0 – 3.0 | 3.0 – 5.0 |
| Express | 7.5 – 11.5 | 5.0 – 7.0 | 3.0 – 4.0 | 4.0 – 6.0 |
| Flex | 8.0 – 12.0 | 4.5 – 6.5 | 2.5 – 3.5 | 3.5 – 5.5 |
| In-Bay | 9.0 – 13.0 | 3.5 – 5.5 | 1.5 – 2.5 | 2.5 – 4.5 |
| Self-Service | 10.0 – 14.0 | 3.0 – 5.0 | 1.0 – 2.0 | 2.0 – 4.0 |
As you can see, the values and ranges of car washes depend on the type and model of the car wash, as well as the metric used for the valuation. Generally, express and flex car washes have higher values and multiples, as they are more popular and profitable, while self-service and in-bay car washes have lower values and multiples, as they are less efficient and competitive. Full-service car washes have moderate values and multiples, as they offer a higher level of service and customer satisfaction, but also have higher costs and labor requirements.
Of course, these values and ranges are only averages and estimates, and they can change over time and vary depending on the specific characteristics and performance of each car wash, as well as the market conditions and demand. Therefore, it is important to use more than one method and metric for your car wash valuation, and to adjust them according to the factors discussed above.
To give you some examples and case studies of car wash valuations, based on the four metrics and the factors discussed above, we have prepared the following scenarios for you.
- Example 1: Full-Service Car Wash in California
- Value: $3,000,000
- NOI: $300,000
- EBITDA: $400,000
- Revenue: $1,200,000
- SDE: $500,000
- Cap Rate: 10%
- EBITDA Multiple: 7.5
- Revenue Multiple: 2.5
- SDE Multiple: 6
- Factors: This car wash has a large size of 1.5 acres, a strong membership program with over 1,000 members, a high ESG performance with water recycling and solar panels, a loyal customer base with high satisfaction ratings, and a prime location in a busy and affluent area.
- Example 2: Express Car Wash in Texas
- Value: $4,000,000
- NOI: $400,000
- EBITDA: $600,000
- Revenue: $2,000,000
- SDE: $700,000
- Cap Rate: 10%
- EBITDA Multiple: 6.67
- Revenue Multiple: 2
- SDE Multiple: 5.71
- Factors: This car wash has a medium size of 1 acre, a growing membership program with over 500 members, a good ESG performance with LED lighting and biodegradable chemicals, a fast and efficient wash model with state-of-the-art equipment and facilities, and a high growth potential with a strategic marketing plan and expansion opportunities.
- Example 3: Flex Car Wash in Florida
- Value: $2,500,000
- NOI: $250,000
- EBITDA: $350,000
- Revenue: $1,500,000
- SDE: $450,000
- Cap Rate: 10%
- EBITDA Multiple: 7.14
- Revenue Multiple: 1.67
- SDE Multiple: 5.56
- Factors: This car wash has a small size of 0.5 acres, a moderate membership program with over 300 members, a fair ESG performance with water conservation and waste management, a flexible wash model with both express and full-service options, and a stable profitability with a low debt and a loyal customer base.
These are just some examples and case studies of car wash valuations, based on the four metrics and the factors discussed above. You can use them as references or benchmarks for your own car wash valuation, but remember to adjust them according to your own situation and circumstances.
Conclusion
In this article, we have shown you how to value a car wash business using various methods and metrics, such as cap rate, EBITDA multiple, revenue multiple, and SDE multiple. We have also discussed the factors that can influence your car wash valuation, the average values and ranges of different types and models of car washes, and some expert tips and insights on how to sell or buy a car wash.
We hope you have enjoyed this article and learned something valuable from it. Please feel free to share your thoughts or queries in the comments section below, or contact us directly via email or phone. We would love to hear from you and assist you with your car wash valuation needs.
FAQs
Here are some frequently asked questions and answers about car wash valuation.
