Mar 17, 2022
An Interview with TJ Brogan, Owner of Washaroo Hand Car Wash
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TJ Brogan Podcast
Will Fry: Excited to chat. I’d love to hear a little bit about the origin story for Washaroo.
TJ Brogan: For sure. I grew up in Michigan…East Lansing, Michigan…go Sparty. Then went to college in Michigan. After I graduated, I moved down to Austin and took a tech job. I worked in sales and quickly realized that I didn't want to be working for someone else and I hated that you’d have a good month, and the next day you wake up, and they say, "Alright, here's the new target get back after it" because you weren't building anything. So, I quickly started to look for other businesses that I could acquire and put some sweat equity in because I had some time on my hands and no family yet. So, that's what kind of got me down here and got me into my own small business.
Will Fry: Nice. You come from a family of small business owners. Is that something that you felt you always aspired to?
TJ Brogan: Yeah. Growing up, I was the second oldest of ten kids. I'd say a lot of the inspiration came from my older brother Blake. We were always starting new businesses together. He was waking me up at six in the morning to get to the country club to caddie. We would share our money as a little kid, and I just remember we'd do lemonade stands on the corner. So ever since a young age, I felt like I knew I wanted to work for myself one day.
Will Fry: Sure. When you're thinking about the type of business you wanted to run, what did that process look like?
TJ Brogan: I knew that I just wanted to grow and steer a ship. When I was looking at businesses, I saw a lot of my friends getting into the tech world, and quickly getting out of the tech world. I was looking for something a bit more conservative that I could buy. I knew I could at least break even to start and not have to go raise a bunch of money, which would allow me to have the most ownership in the business. So that's what kind of drove me to the service-type businesses. I looked at ice cream. I looked at car washes. I looked at buying a couple of lawn mowers and trying to start a lawn service. I was looking for porta-potties as well. Everyone likes a good porta-potty!
Will Fry: I imagine you were exploring both the ‘do you build it from scratch’ as well as ‘do you buy an existing one’ at the same time options? Is that right?
TJ Brogan: I knew a guy who was kind of a mentor to me, who owned the real estate at this car wash. I was by no means just looking for car washes, but he happened to own the real estate and he said, “Hey, the current operator is running into some health issues, the operation has really tanked over the last three years, go check it out and see if it's something you'd be interested in.” So I literally was working my day job and on the weekends, I would show up and just start vacuuming and washing cars, and realizing, ‘wow, there are a lot of cars showing up here’. I could quickly come in and add some value to this business. Luckily, because it was doing so poorly, I could buy it at a rate that I thought was very fair.
Will Fry: Sure. So at the time, was the owner looking to sell? Or were you approaching the person with the idea of selling for the first time?
TJ Brogan: Yeah, good question. I was fortunate that my mentor played the middleman because he was the owner of the real estate. He knew the guy’s situation and he knew my situation. Luckily, I had him in my corner to steer a lot of the negotiations. He was also looking out for the interest of the guy who is selling it because he'd been a good tenant for 10 years. I was lucky to have someone in my corner that could steer me in the right direction when it came to valuing the business. He kind of teed me up for a guy that he knew wanted to sell.
Will Fry: Right. Right. During the first six months, did you have an owner overlap or transition period with a previous owner, or because there are health issues involved, was it more of like shake hands and you'd come in on day one?
TJ Brogan: Yeah. So once I bought the business, he was gone. But I'd say in that due diligence phase, where I was showing up and washing cars, that was a good opportunity for me because he wasn't necessarily washing cars, but he was around. So I could just ask him a lot of questions like, “Hey, why do you do it this way?” “Have you thought about doing it this way?” He's like, “No, no one does it that way.” So, I got a lot of the X's and O's from this guy. As far as how do you wash a good car, not necessarily the fastest way to wash the car, but just, hey, this is what you want to think about. This is what customers care about. That was definitely a helpful period to have him around because I'd been in Austin three years prior to that and I never washed my car. It was just something I didn't care about.
Will Fry: That's interesting. I want to double back to the employees. But before we do that, on the first six months or really first three months, I've heard two schools of thought. One is, don't draft a plan at all, because as soon as you come in, it goes out the window. So there's no point in having a plan. Another is spend a lot of time during the diligence period to figure out what you want to fix and start rolling that game plan out as soon as you hit the ground running. Which path did you choose?
TJ Brogan: Yeah, good question. So, because it's such an employee-heavy or employee-reliant business, I knew getting the right employees was going to be key. But, then we also needed the processes to bring those employees into. In the beginning, my bandwidth was low as far as being really creative on how we could grow and make the business better. I was the one greeting the customer when they pulled in, checking it before they left, and ringing them up. So, I was working in the business so much, I couldn't really work on it. But I think there were a couple of low hanging fruit opportunities, like charging the customers a little bit more. Instead of having the same employee go through the whole wash process alone, we just stationed them all out, because that's what everyone else in town was doing. A lot of what I did I just piggybacked off of what other companies were doing because I thought ‘oh, yeah, that's definitely the right way’. If everyone's doing it one way, they must know something. So that was an an easy way for me to start to grow the business. Without doing a lot of marketing or anything crazy.
Will Fry: Yep. In terms of growing the business, sounds like you went through this period where you're boots on the ground for six months, trying to figure out which way was up, start to grow the team, leaned into building relationships with the managers. At what point were you ready to say the next phase of growth is a second location?
TJ Brogan: Once I knew that I didn't need to be there touching every car and I could step away and go back to Michigan for a week to visit my family and I wasn't totally panicked the whole time, that's when I knew, “okay, I have the bandwidth to take on a second location.” You can look at your team and ask “who in this group has the capability to go run another wash?” I had someone on my team who was raising their hand and really wanted to do it, we found a great location that we thought would be an easy win for us to replicate the business model. Once that happened, we just jumped. I'm only at two locations, but we're looking to open up more pretty soon.
Will Fry: Sure, sure. For the new locations, is it typically like a ground up, build out? Are you buying an existing car washes?
TJ Brogan: Unfortunately, with Austin, the permitting is just so difficult. The city doesn't love a lot of water just falling into the drain and so permits are really tough. What we found is, if you buy an existing car wash, you don't have to get any of the permits and you don't have to change too much of the infrastructure of the building. You just hook up some hoses and set up your vacuums and youre good to go because the traps are already there to collect the water. So our business model, at least for the hand car wash and detail type of business, is to focus on existing car washes.
Will Fry: Sure, sure. That's interesting. We're seeing something similar in the auto shop space, where a lot of like auto shop franchises will actually buy out existing auto shops for their franchisees because of the permitting.
TJ Brogan: Even if you're just going to lease it or ‘buy the dirt”, if I were to go try to start one ground up, it'd be acquiring the land for simple numbers, then sitting on that for probably at least a year before I can break ground. Then I build it, which is another six to eight months before I wash my first car. I’m 18 to 24 months in and the numbers on that just don't make sense. If I buy an existing one, call it self-serve, I can do a month of fixing up and then I can wash a car a month later. That's where the money, the cash flow, starts to be advantageous.
Will Fry: And what is that first year when you're having to sit on it if you're doing a ground up?
TJ Brogan : I mean, it's just working through the permits with the city. There's so much red tape you're trying to get through. With my carwash that a portion of it just burned down, it would probably be a five to ten day fix. But, we're three weeks in and we haven't even had a guy start working on it yet, just because the city shows up, they shut you down, they make you do all these things before you can start to work to make sure it's all safe for the workers to be in there. Then you’ve got to get permitting, then engineers to sign off on the work you want to do. Then you have to have an inspector come out at the end to make sure what you said you were going to do is done. It's a pain and that's the type of things that drive small business owners nuts is when they're just messing with red tape rather than growing their business.
Will Fry: That's interesting. Awesome. I know, we've covered a lot of ground, I thought there are kind of two questions I wanted to close out with. We can start with the first one, what would you tell a younger person who's considering becoming an entrepreneur through acquisition, like you have?
TJ Brogan: It's a good question. I think the biggest thing I would say is, just from my own experience, I found that being around entrepreneurs creates an entrepreneur within yourself. I knew I wanted to go out and start my own business. But I mean, it's scary, and it's murky water, you don't really know how to walk through it. Being around people who have already done it and can guide you, encourage you, and also just pour into you and spend time evaluating businesses with you, I think that's the most valuable thing. Once I got to know some small business owners, it was just inspiring and got me to finally leap and go for running my own business.
Will Fry: Yeah, that's great advice. Second question. So it sounds like the original question is, what resources would you recommend? And it sounds like resource number one are other entrepreneurs or business owners. Are there any books or anything on that front that you found helpful?
TJ Brogan: There's, there's nothing specifically I would point to. Words don't necessarily get me going, short stories definitely get me going. So just any podcasts, or forums, where people are telling their small business story, those types of things really jacked me up. Even reading Shoe Dog, I don't think of myself as an emotional guy, but I was so inspired by what Phil Knight was able to do. I was like, Oh my gosh, I want to do this with my life. So, it's more the inspiration rather than the X's and O's of running a business and learning accounting and marketing and all those things. It's really just, how can I just be inspired and therefore go inspire my team, and be able to just jump into this world of murky water and try to figure it out.
Will Fry: Sure. Awesome. I think that's everything from our end. But thanks so much for coming on. That was awesome.
TJ Brogan: Thanks for having me.
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Will founded Beacon with the mission to help the current generation of owners to retire while enabling the next to unleash their entrepreneurial spirit. He comes from a business background having graduated from the Wharton School with a B.S. in Economics.
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