I've bought multiple car washes. Here's what I'm teaching my daughter about why they're the best small business investment
After buying multiple car washes and learning every detail of the business, I've come to believe they're the best small business investment out there. My portfolio is going to help me build generational wealth, so I'm starting to show my daughter why. The best thing I can leave her isn't just the business, it's understanding why it works.
Here's what I'm teaching her.
First, they're recession-proof. Car washes will always have a need.
Second, the cash flow. Margins are strong, and if payroll is controlled, a car wash can generate up to 40 percent cash flow.
Third, depreciation. Equipment and fixed furniture can potentially be 100 percent deductible in year one, and the building can be depreciated over time. Talk to your CPA about how this applies to your situation.
Fourth, scalability. With good management there are fewer moving parts than in most businesses, which makes car washes a natural roll-up opportunity.
Fifth, multiples. The exit plan is the goal. On bigger sales, multiples can climb up to 15-20 times EBITDA.
Happy to answer questions if anyone is looking at car wash acquisitions.