87. How To Start a $500K/Month Car Wash

0:00This$500 ,000 a month car wash operates in a way and scale you've probably never seen before. So always, always, always cash flow is king. We are always going to be watching the cash flow more than anything else. There's really unique ways to differentiate your brand as well as have positive impact. I got smacked in the face real hard in those first few months thinking that, okay, I'll figure out the car wash. It'll be easy. How hard could it be? But as anybody knows who operates a business, there's a lot of details below the surface. I had to learn those really fast because I didn't spend the time necessary before the business to do so.

0:38We have this notion that there is a labor shortage or that we just can't find good people. People just don't want to work anymore. They don't want to do these jobs that I have for them. And the truth is, is that is much more often the case is that the hiring system itself is broken. I think that oftentimes people are all trying to emulate other businesses. So there you see a lot of copying going on instead of trying to do things that are differentiated. I'm your host, Alex Freeman, and I'm joined by the Forbes 30 Under 30 social entrepreneur Thomas De 'Arie. Let's dive in and uncover exactly how Thomas turned a failing car wash into a thriving business.

1:18Thomas, thanks so much for joining us. Alex, it's a pleasure to be here. Thanks for having me. To get us started, can you tell us your story and how and why you opened a car wash business? Yeah, so I never expected to be in the car wash business. We really were looking for a way to find employment for my brother, Andrew, and Andrew is on the autism spectrum. So this was back in In 2011, I had just finished my undergraduate degree and Andrew was turning 18, 19 years old, and we were really struggling with what he was going to be able to do with his career. And it became really clear really quickly.

1:53In order for him to lead the full adult life that we knew he was capable of, we were going to have to take action. So he looked at a bunch of different businesses and we really liked the car wash business at its root when it's done well. It's very process-driven and routine. It's an asset-backed business. We figured that if it all didn't work, we'd still at least have an asset to be able to sell. And that we really felt at the end of the day, Andrew would be great in this business. He'd do a really good job. So that was why we got into the car wash business. And luckily, it's been really successful so far.

2:25So that particular mission-first search is a little bit different than a lot of entrepreneurs. how did that impact your decision-making process as you kind of looked at what business or niche to enter into? So at the time, all the best research, and there really wasn't a lot of it, so saying the best doesn't mean much, but the research that was available as far as what people with autism would be good at in the workplace was all kind of centered around process and detail oriented work. Today, we know that there's a much broader skill set of neurodivergent people and people with autism more specifically.

3:00But what we were looking for really was a business that was going to benefit from a workforce that could be really process and detail focused. We were also looking for a business that was out in the community so that we could really communicate more to a wider audience that individuals with autism really bring wonderful skills and strengths to the workplace. And it's not just a disability that requires sympathy, but actually a really valuable diversity. And then we really were looking for a business that was fairly undifferentiated, meaning that there wasn't a lot of brand power in that business.

3:35So we thought that by telling this unique story, it would be a real advantage from a marketing perspective. So we looked at, like I said, a few different types of business concepts, and the car wash really stuck out and checked all those boxes for us. So once you made that decision that it was going to be a car wash, What were the next steps in the process to get you from that decision to opening? How long did it take and what steps did you take? Yeah, so it took a little over a year from inception of the idea to actually operating. And the first thing we had to do is we were really clear and honest that there was a lot of things we didn't know about what we were trying to do.

4:13We didn't know anything about employing people with autism. We didn't know anything about operating car washes. So we really needed to find experts who could help guide us in this journey as well as really fill these knowledge gaps. We went on a search for partners. We found a wonderful disability employment consultant by the name of James Emmett, who's still doing this type of work out there. And he kind of guided us on the employment side of what we were trying to do. And then we found a great partner who we still work very actively with called Sunny's Enterprises, which is the largest manufacturer of car wash equipment in the world.

4:48and also obviously experts in this business. So we kind of put those two together and decided we were going to run a proof concept. So to really test this idea out before we went in, we made an investment in actual car wash ourselves. And luckily, really by God's grace, the owner of Sunny's Enterprises, Paul Fazio, had one car wash that he owned that they essentially tested equipment at. And he was willing to let us operate there for the summer to test this idea. This was in Homestead, Florida. And we spent eight weeks kind of testing our assumptions around, you know, could we recruit and train enough people with autism to be able to staff these car washes?

5:29How would customers think about this idea? Would they be positive to it or would it be too stigmatized or whatever have you? We really tried to spend a summer validating that stuff, and it was all went very positively. So we started searching for an actual car wash to purchase in the fall of 2012. And we found one in Parkland, Florida, which was this kind of struggling old car wash that was in a really good location, a wonderful community, but just needed some love. And, you know, so we bought that one, renovated it and started operating our new business model in April, 2013. Why the decision to buy into the first location versus finding a new spot and building a car wash from scratch?

6:10What were kind of the benefits and challenges of going that route? It was really speed. We wanted to do this quickly. We wanted to get going. And to build a car wash takes years. And our second two car washes are both ground up. So we built them. We bought raw land and developed them. That takes generally two and a half, three years from the time you put a purchase offer out to the time you're actually washing cars. So we said, okay, we'd like to buy one and get going quicker. That was really the reason there. I mean, there's benefits and disadvantages to both concepts. Certainly when you buy one, And it's a story you're inheriting all of the mistakes that previous operators, as well as the previous people who actually built it, made.

6:51So you come to our Parkland location and you see that it's not designed at all like the other two stores because we didn't build it. So certainly there's that aspect of it. But I will say it was very fortuitous for us because we took this car wash that was struggling and therefore not valued particularly well as business. And once we turned it around, the business ended up with a lot of equity in it, which allowed us to refinance multiple times at this point, which provided us with capital we needed to build the other two locations. On the capital question, obviously, you know, once you have the first location, there's the ability to refinance and do all of those kinds of things.

7:26But leading up to buying the location, getting started in the new business, what were you doing to prepare your personal finances for the risk that was about to be involved? Yes. I mean, this was mainly my dad, right? So he's my partner in this business and our CEO. And this time I was like 23 years old, so I didn't really have any personal finances to speak of. So he always keeps really clean personal finances. He had just sold a business to do this with me and for Andrew in February of 2012, I think is when that closed. So I kind of took that money and put it into this new business. For people listening, the most common practice in our industry, and I think there's probably a lot of them that are similar, is getting SBA financing, which to my knowledge, you don't have to have a ton of assets yourself to get SBA financing, but you do have to personally guarantee these loans.

8:16That's how we did our startup, as well as how we've funded our other locations so far is SBA debt component. Now, when you first bought the car wash, did you come in and just kind of clean house and say, we're inserting this concept now? Or was there a transition period? How did that all work of actually getting the new concept up and running? So we bought it and we closed it and we closed it for, it ended up being a little over four months because we had to renovate it significantly. Frankly, we needed to renovate it more than we did. And we just didn't really know what we didn't know at that point.

8:48So that aspect of closing the business, really all the staff that was there found other work. I think we ended up one of the previous team members came back and reapplied once we were ready to start going again. And he's actually still with us, which is wonderful. But for the most part, it was that renovation period was a break and caused a kind of a natural transitionary period. The whole business concept comes from a place of definitely people first, of managing your people and meeting them where they need to be met. So can you talk to me about people management skills that business leaders need to have and how you went about developing those?

9:24Yeah. So when I started, I had pretty poor people management skills. I really believed at that point that the boss had to have all the answers, that I had to give directives. And if people didn't listen, I just needed to speak louder. And that was really kind of my method of people management early on. And it worked very poorly. you know, when I learned and fairly quickly, specifically because I was comfortable being in service to our employees with autism, which make up 80 % of our staff, that I needed to take a different approach. I needed to take an approach that we now we call disciplined compassion.

9:58So I needed to hold people accountable. But in order to do that, I have to be really clear about my expectations. I have to be willing to develop people, coach and train them and not expect them to simply know what I want or how to do those things without a lot of support to start. And that when people are struggling, instead of looking to blame the person, we really look to understand the situation first. So Amy Edmondson, who's an early researcher of psychological safety, has this concept within that called the failure spectrum. And so that goes from blameworthy failures to praiseworthy failures.

10:39And only in her research, maybe two or three percent of failures out there are really truly blameworthy. So the vast majority of these types of failures, we need to recognize are opportunities for growth for the organization and for the individual. So when we see someone struggling, what we want to do is we want to understand why they're struggling. We then have this organizational habit of building systems around those struggles. So once we identify where someone's struggling, we're actually You're going to try to build that system or process or tool to make it where that person who's struggling the hardest is now able to do the job more effectively.

11:13And that's been a really poor strategy in how we build psychological safety within our workplace, as well as build just really good systems in order to allow us to scale and provide better service to our customers. Ever wonder how top investors consistently beat the stock market? It's simple. They jump in on opportunities before companies go public. But investors like you and me are typically left out of these lucrative opportunities. Today, it's all changing. StartEngine, led by Howard Marks, previous co-founder of Activision, which was acquired later by Microsoft in a record$67 billion acquisition, is now democratizing investing.

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12:22I want to ask a little bit more about those systems. What has been your system design process? And I guess, when do you determine if a system is working or not working and how long do you kind of give it to unfold before you maybe retweak it? Broadly speaking, we try to use a human-centered design process, a loose human-centered design process in building our systems and processes. So we're going to take it from the user's perspective. And whenever we're doing this, we're going to first really try to understand the needs of the people who are going to use the system, really try to be clear on what success, looks like for that particular system.

13:01And then we're going to go into a prototyping phase. So whether that be actually going out live into the work environment and trying to do what we're setting out to do and documenting that, that way we can kind of see on paper the steps that it takes to do a certain thing. And then we can tweak that and see, okay, well, there's a friction point at this step. So maybe we need a different tool or a different way to do this and really analyze the tasks that way. And then we're going to keep iterating. And we're going to iterate really until we feel like the system is really operating optimally. And at least an annual basis, we try to go and audit all of our core functional systems.

13:39So maybe the way that we clean the inside of a car worked well for us two years ago, but now we're starting to see that there's holes in it. So we need to revamp that. We do that really regularly, but I will say that the beacon that really alerts us to flaws in our systems are our team members. They are often pretty open when a system isn't working well. And even if they aren't telling us directly like this sucks, you'll be able to see in a lot of our newer team members' actions, like if they're really struggling with a certain process or system. So using that new employee experience as a way to refine our processes in the systems is something we do really frequently too.

14:20I believe the number you mentioned was 80 % of your employees are neurodivergent. And can you talk to me about what some of the unique challenges come from having a largely neurodivergent workforce versus what someone who maybe is running a business without that focus might run into? Yeah. So generally speaking, a good way to think about our staff is that they have the same needs as everyone else, they're just often more apparent. So everybody wants clarity in their role, but people with autism really need this. Everybody wants managers who are going to give them feedback and be clear about if someone's meeting the expectations or not and what they need to do to meet them if they're not meeting them.

15:02But people with autism really need this. So I would say that the difference is just that the issues are more pronounced and kind of force solutions quicker than a typical staff. A lot of times, typical team members will try to appear confident even when they're not competent and just kind of sweep problems under the rug or just kind of soldier on through less than ideal circumstances where our team isn't going to do that so much. They're going to be a lot more forthright. So we look at that as a real benefit, which allows us to really refine our systems and our processes and run a great operation.

15:36But it could certainly be looked at as, well, this is more work because we have to fix all these things in our organization in order to support these staff members. The truth is, you probably need to fix those things either way. You just aren't aware of it because most of your team members aren't going to bring that to you for fear of looking like they don't know what they're doing or they're not capable of doing their jobs. I mean, you talk about that in your book, The Power of Potential, how those inclusive hiring practices can solve a lot of common business problems like what you were just describing.

16:05First, I guess I'll ask, are there other problems that are holding businesses back that inclusive hiring can help address? Yeah, I think the first one, and it's been so salient over the last couple of years for many business owners, is we have this notion that there is a labor shortage or that we just can't find good people. People just don't want to work anymore. They don't want to do these jobs that I have for them. And the truth is, is that as much more often the case is that the hiring system itself is broken, right? We're hiring from the same pool as everybody else. So of course, that can feel like there's scarcity of labor sometimes.

16:42We're doing what's essentially a glorified airport test in the interview. Do I like this person? I get this feeling of if this person's a good fitter or not, but not a lot of data to support that. So when we flip that around and say, okay, let me be really clear about what actually matters for this role. What are the core skills and values that someone brings to this role that's successful? If you're operating a business already, you can simply look at the people who are doing really well in certain roles. And oftentimes you can say, okay, well, this person has a certain skill or a certain mindset that is really valuable and that that's what I need to find.

17:21And for entry-level roles and a lot of the roles that we hire for, that's generally a value set more than it is any actual skill. So we're looking for people who display grit, who are assertive, who have a growth mindset. And we ask interview questions to ferret those things out. We try to ask in a lot of different ways. So we ask kind of how would you handle a situation like A, B, and C or tell me about a time where you faced this type of dilemma and how you worked through it. Asking both those types of questions is kind of what if as well as historical question is also more inclusive because it allows people who are comfortable with either of those kind of really show you their values.

18:02Makes it easier for people for a wide range of backgrounds to answer them. And when we build this type of clarity into our hiring process, it automatically makes it more inclusive because we're no longer using kind of arbitrary data to determine whether or not someone's a good fit. Things like a certain work experience background or a certain educational background or just some sort of social thing that you value. Things like eye contact or handshake or a lot of times we're biased even by things like tone of voice. we tend to kind of extrapolate these things about people to their actual ability to do a job.

18:38And that's generally very inaccurate. So I think that's the first thing that is really critical, that clear hiring can make you more inclusive. But then also looking at these different barrier groups of people, there's a lot of people who really do want to work and be really grateful for the opportunity to work that simply don't get an opportunity because they've been turned down a lot of times and aren't actively on Indeed or things like that. Or when you interview them, they interview a little differently. And if you're, again, doing an airport-style interview, well, you might not think that they're great talent.

19:11For us, we've got three car washes here in a five-mile radius in Southern Florida. And we employ over 90 people and we have a wait list. And I've almost always had a wait list of people that want to work for us, where most car washes, most restaurants, most of these service-based, community-based organizations are chronically understaffed and simply can't find people when they do their leads pretty quickly. We have a turnover rate that's over five times lower than the normal car wash. So these methods, while they're different and they may feel maybe a little unique, they're fairly effective. And I would really encourage people, if you're struggling to find talent, to really look at your hiring process before blaming the labor market.

19:58I think you have laid out a really, really strong case for inclusive hiring practices, but I understand that some entrepreneurs and business owners might still look at it and feel daunted by the prospect of layering it in. So what advice would you give to a business leader who is definitely intrigued and interested, but maybe feels a little unsure about actually doing it in their own business? Yeah, and I understand that. And this can be scary, it's different. Certainly we hear from entrepreneurs like, I don't want to hire someone and then have to fire them if they were a bad fit. Like having to fire someone with autism or with a disability is very scary.

20:32And I get that. So what we really recommend is approaching this like a prototype, just like we do with our products and our services. And the best way to do that, in my opinion, is starting with a training program. So let's say there's a certain role in your organization that you really just are chronically struggling to find talent for. That's a good place to start. And you bring people together, the managers of people in that role, maybe people from HR, if you have an HR department, or maybe it's just you and people who are directly overseeing this role and try to determine, okay, well, what makes someone successful in this role?

21:09What are the core things that they need to do? Do we have good processes for these things? And if we do, great. And if not, let's build some just basic processes. How would I teach someone who knows absolutely nothing about how to do this? How do I teach them in a curriculum-based way? And what does success look like? Do they have to be able to do this task in a certain amount of time? Do they have to do it at a certain amount of quality? What are the clear and objective ways to measure if someone's able to do this job? And once we have those things, we can now invite people into our organization, let's say people with autism into our organization, as trays, right?

21:46So if it doesn't work, as you're fumbling your way through this, you're learning, you're prototyping, you're refining. If you bring people in that aren't a good fit or you just kind of messed up and you have to pull back or whatever the reason, you haven't made a long-term commitment yet and you can walk away. It kind of de-risks it for the employer and it allows you also to run a few iterations before you actually go live with this hiring process in a way that's, again, pretty low risk. That's typically what we recommend when we're trying to revamp the hiring process. Start it with this kind of mentality that we're going to prototype it and use a training program as the vehicle to do so.

22:23You know, you mentioned the wait list of people wanting to work for you and the outside growth of the company as well indicates that Rising Tide has a particularly strong brand. So what tips do you have for solidifying brand identity and then raising awareness for the brand in the community? There's a few things that have been really helpful for us. And one is building relationships with the people in the community that really care about the mission. So, you know, our recruiting process is very grassroots. We go into the community and we find people who know and love specific individuals with autism.

22:59So those are things like your special education teachers, your parent advocates, your community liaisons at the local nonprofits. benefits. And while that's really helpful for us to build a pipeline of applicants, these people also end up being our brand evangelists when we go into a new community. So they're talking about it. They're excited about it before we ever open the doors. And that was really helpful early on. And it continues to be really helpful. People in the schools talk really highly of us. People in the community care about this cause. So there's really positive word of mouth associated with it.

23:31But getting the fodder is what I just laid out. And then the second thing, we really rely a lot on earned media. So getting news segments, getting videos made online, these little mini documentaries, which we had a couple go viral has really helped us. That's been a really great way to build credibility and to share our story effectively. And then kind of secondarily, but also important is the use of social media ads. So we try to tell our mission-based stories through ads as well to get deeper brand exposure in the community. Beyond that, what kind of marketing strategy are you deploying? Are you using any paid marketing or not?

24:08Or is it really the earned media and finding those brand ambassadors? Yeah, we use some paid marketing. Generally, again, it's digital ads, whether it be for our type of business, search ads through like Google or Waze or Bing. Those are very helpful, as well as doing ads on Instagram and Facebook and TikTok. All of those have been good ways for us to spend our marketing dollars. We'll also do things like the school banners. Simply, you know, it's just brand awareness. It's also a good way to build relationships with the PTA because that's typically who's running those type of banner things. If we can get a nice banner on a main road, that's advertising that we'll usually spend money on.