You see, Truck Wash Steel Buildings have tripled in cost in the last 4-years due to increased steel costs, associated with Tariffs, Government Intervention and Steel Industry Consolidation. Of course, the costs of building a Truck Wash in 2008, no matter what materials you use have also increased threefold. This is due to the obvious things such as; over regulation, labor shortages, local municipal permit process and legal fees that are attributed to such issues.
If the cost of the property, debt service on the loan and the cost to build the truck wash exceed a reasonable return on investment in the first four years, it makes sense not to build the Truck Wash at all. Currently, the trucking industry is not breaking any speed records but it is doing quite well considering other industries - real estate for instance.
If there is a further slowdown in the economy and the diesel fuel prices increase, then the truck washing industry might take a serious hit as large corporate trucking companies try to conserve costs. Any Truck Wash owner or Truck Wash facility operator knows this will cut into their sales in a big way.
With these risks considered; Does it make sense to build a truck wash in 2008?
One interesting comment on this question is; it could take up to a year and a half to get approval and permits to build the Truck Wash and you might be in the project before you even break ground for $100,000 including attorney's fees, architects and planning. At which time you may decide not to even do it, because the environmental impact reports are causing you friction at their local city planning commission.
If you started planning your Truck Wash today, 1/1/2008, chances are you would not complete the project until around the end of 2009 unless you have some juice from the local city or county in which you are building the Truck Wash. The price of materials especially steel does not appear to be coming down anytime soon. Concrete is not coming down either, but if we have a sector rotation downturn in the commercial building industry, one, might be more apt to cut a good deal on building materials like concrete and thus, an opportunity window in the near future.
If a recession that hit the US economy fairly hard in 2008-2010, after that it would recover strongly and the trucking industry would boom again. This would provide excellent sales for a quicker return on investment on a Truck Wash. Is it worth the risk? This is definitely something to contemplate in 2008.
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Lance Winslow is a semi-retired entrepreneur, retired Franchisor and a consultant brain-4-hire, internet writer and author. Got bored in retirement and founded the Online Think Tank - http://www.worldthinktank.net
If you would like to send hiem an email just to say hi, discuss an article or need some advice you can find him at; http://www.carwashguys.com/history/founder.html
