This is the time of year when an operator should be working on their 2008 budget. With rising costs of almost everything we use in our industry if an operator did not raise his prices last year to cover increasing expenses it would seem almost impossible to cover expenses and make a profit this year. This winter is going to be a tough winter with utility costs. I think customers almost expect to see rising prices and when we don’t increase prices we usually cut back on labor and when we do that most times quality goes out the door with it.

The easiest way to raise prices is to put a program in place that eases the cost for your regular clients. For example, a frequent wash program where every 5th wash is free when used within 60 days, for example, might work. Another program we used when raising prices is that if you purchased the “Works” wash package we gave them a coupon to come back within 14 days and they could get another.

We always handed out a notice to our clients ahead of time that due to rising fuel costs, etc., we would be increasing our wash prices effective on a certain day and that they could buy wash books prior to that day to save money. That little notice always increased book sales and once again our regular customers would remain faithful — a win/win for everyone. Each time we had to raise prices we were surprised how few complaints we would hear.

“Works” wash for the price of a basic wash. We found using programs like this lets our regular customers feel like they are still getting the best price possible and the clients that come in only during winter or once or twice a year pay the higher cost.

It has been quite some time now that we have been dealing with these high gas prices. I believe it is about two and a half years since August of 2005. Our industry has definitely suffered as a result of it. Our checkbooks are getting pounded by increased expenses from every angle and our volumes are down because people just don’t have as much disposable income.

It seems that just when you think we are going to break out of this lousy stretch any optimism gets crushed by a huge spike in oil prices.

At some point, the high price of gas will not be a factor for us. I do not believe that the price of oil is going to go back to what it was three years ago, which was less than $50 per barrel, but I do believe that we will learn to adjust and people will find ways to make up for it. I feel that this transition is already taking place and if you haven’t begun to change the way you run your carwash maybe it is time to start.

There are many variables that need to be considered when making the decision to raise your prices. I cannot say whether a particular location should raise their prices without knowing a little about the carwash. Chances are that you have had at least one price increase in the past two and a half years due to all the increased operating expenses. If you are satisfied with the volume you are doing, and the return you are getting from it, why mess with a good thing? On the other hand, if it is becoming increasingly more difficult to pay the bills every month perhaps it is time for another increase.

One thing to take into consideration of course is competition. Are your prices in line with your competitors or are you trying to stay right below them? Keep your standards high and raise the bar as to what your customers expect from you and they will be willing to pay a little more. Remember that the place giving the best service for the money is the one the customer will continuously frequent. If a competitor is giving equal service at below market value they will not be able to survive very long doing it. Service will prevail in the long run and you must get paid in order to keep up that service.

If a price increase is not feasible at this time you can try some other avenues to increase the bottom line. Labor reduction through automation is on the top of my list. Cutting labor by one or two full-time employees can be as good as or better than a price increase. If you cannot afford to buy the equipment out right there are many financing options to consider. Most likely, the monthly payments will be considerably less than the salary of those employees.

The addition of new services can be a great way to boast sales and the bottom line without raising prices. Talk to your chemical supplier about new services that may be available for your tunnel. Be sure to train your sales greeter on these services and offer an incentive. If you can increase your average per car by $1 with very little expense, think about what that can do for your bottom line.

To wrap it up if you are doing well and have been able to find a path to success during these tough times, why risk it now? However, if it has been a while since your last price increase and your checkbook is beginning to feel it, perhaps it is time.