Case Study; When Should a Regional Truck Wash Company Consider Diversification?

Case Study; When Should a Regional Truck Wash Company Consider Diversification?

Often long-standing and successful companies cannot maintain the growth they wish or due to external forces they need to modify their operations significantly. Let us take an example of this for a moment. Lets us say we have a successful regional truck washing company and water shortages in the region are causing issues and labor is just too difficult to find and keep.

Paying more to the labor will mean raising prices past the point at which trucking companies are willing to pay. And with labor so tight this still will not guarantee labor supply. This might be a reasonable time to consider diversifying into other areas or complimentary type businesses for a regional truck wash? Perhaps the company can automate and with a truck wash equipment manufacturer and design their own system, since they have the knowledge and resources to build them, themselves.

Regional Truck Washes will have to deal with this labor issue sometime and partially automate until they can fully automate otherwise they are better off to go into the Hotel and property or mini-storage business, build RV Parks and such to hold property until the future and sell it. They should also consider diversifying and perhaps enjoy some additional success in complimentary industry sub-sectors? Consider all this in 2006.