It’s difficult for companies of all sizes to reinvent themselves in response to changing market conditions. Legends such as Pan Am Airlines led the world for 65 years before increased global competition from deregulation contributed to its collapse in 1991. More recently, we’ve watched household names such as Eastman Kodak emerge from bankruptcy only to report success as a string of smaller net losses while it continues the search for an elusive “growth potential.”
Hindsight being 20/20, it’s easy to find a timeline that documents the blunders that led to each company’s decline. It’s even easier for a college professor to stand in front of a business class and explain how Kodak missed the digital camera and then the smartphone revolution. There’s a lot of logic in the famous line that if a buggy-whip manufacturer in 1910 defined its business as the “transportation starter business,” it might have been able to make the creative leap necessary to move into the automobile business when technological change demanded it.
However, industry transformations don’t usually happen suddenly. The future is always far away. It’s easy to ignore the inconvenient indicators that pop up to tell us change is on the horizon. But how far off is the future?
Brought Down
This is where my mind wanders as I pass boarded-up gas stations on some heavily populated sections of U.S. Route 1 near my home. What forced them out of business? Was it price wars from competing stations on every corner? Was it competition from 24-hour pharmacies on every corner of the next intersection? Was it competition from the new big-box market between the two intersections? Was it that the Tesla Model S stopped at the light next to me, which doesn’t fill up at all? Or was it that too many customers that used to stop in for a daily Red Bull are now having a case of the stuff automatically delivered to their home every 24 days, for less than $1.50 per can, shipped free with their Amazon Prime subscription?
Looking at beautiful pieces of prime real estate sitting there with abandoned fuel pumps, waiting for a new business to leverage the space, forces the question: What business were they really in? Were they in the business of selling some combination of gas, nicotine, food and packaged goods? Or were they in the business of offering motorists a convenient place to take care of errands while traveling? If demand for their current basket of products dropped off, should they have competed more aggressively on price until they closed, or stepped back to re-evaluate the property’s potential to offer an alternate product or service to motorists looking for a convenient place to take care of an errand while traveling?
Sitting on a Gold Mine?
The hurdles in transforming a failing petroleum site are not small, evident via the thousands of closures during the past two decades. But the challenges are not so insurmountable that the only path is to close up shop and wait until a developer willing to take on the potential risk of ground contamination makes an offer for the land. Is it possible that you’re sitting on a perfect stand-alone car-wash site and don’t even know it? You bet, and it’s remarkably easy to determine.
Today’s express-exterior car-wash format can transform a three-quarter-acre lot into a 60-car-per-hour tunnel wash with free self-serve vacuums that the community will rave about. Most equipment manufacturers or local service companies can run a complete demographic profile and investment proforma to determine the site’s potential as a freestanding car wash, but there are five site characteristics that, when present, warrant serious evaluation:
▶ Is the nearest stand-alone tunnel car wash more than 3 miles away?
▶ Does the site have easy access in and out?
▶ Is it visible for more than 400 feet in both directions?
▶ Does traffic travel at less than 40 miles per hour?
▶ Is 55% or more of the local population 25 to 65 years old?
If you answered yes to three or more of those questions and foresee your fortunes diminishing with your current business model, it may be time to ask yourself: What business are you really in?
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