Risk Management

Jump to section

• Overview & contents
• i. Important Notice
• 1. Executive Summary
• 2. The Competitive Problem
• 3. Water: Compliance First, Saving Second
• 4. The Subscription Model
• 5. SWOT and Competitive Position
• 6. The Site and the Offer
• 7. Site Selection
• 8. Unit Economics
• 9. The Rollout and Its Gates
• 10. Funding
• 11. People and Operations
• 12. Compliance and Permits
• 13. Financial Projections
• 14. Break-Even
• 15. Sensitivity and Scenarios
• 16. Risk Management
• 17. Implementation Timeline
• 18. Returns
• 19. Key Performance Indicators
• 20. Key Assumptions
• 21. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Site Capital Schedule
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

16.1 The risks that matter

Weather is the risk with the largest effect and the least management control. Fifteen per cent below plan on walk-in volume takes Year 5 EBITDA from R1.36 million to R530 000. It is managed by the subscription base, which by Year 5 supplies 42.3 per cent of revenue and is billed regardless, and by holding cash through the winter months rather than committing it.

Zoning or water refusal is the risk that can strand a committed site. Both are binary and both are knowable in advance. It is managed by a conditional lease subject to written zoning and water approval, and by making that confirmation a gate condition before every site in the rollout.

Labour cost and quality is the risk that operates continuously. Labour is 31.6 per cent of revenue and quality depends entirely on the person holding the lance. It is managed by rostering to the demand curve, tracking throughput per washer weekly, training detailing technicians internally, and giving the site manager a path to running the next site.

Subscriber concentration at peak is the risk created by success. Once a site runs near capacity in peak hours, every subscription wash displaces a full-price walk-in and the discount becomes a transfer from margin. It is managed by a per-site member cap of roughly 380, set and enforced rather than treated as a target to exceed.

Regulatory divergence between municipalities is the risk that grows with the rollout. Car wash by-laws are municipal and the second and third sites may sit in different jurisdictions with different requirements. It is managed by treating each new site’s permit process as a fresh exercise rather than a copy of the first, and by the R125 000 of professional fees in each site’s capital budget.

16.2 Risks sized against the plan

16.3 Controls

• No site is committed to until zoning and water approval are confirmed in writing and the lease is conditional on both.
• No new site is built until every gate condition for the preceding stage is documented and satisfied, including the debt service cover gate before site three.
• The recycling rate is verified at commissioning and monitored monthly against the municipal requirement.
• Subscriber numbers are capped per site and the cap is reviewed against peak-hour utilisation quarterly, not annually.
• Throughput per washer is tracked weekly and the roster is set against the demand curve rather than a fixed shift pattern.
• Cash is held through the winter months and no distribution is made while a site build is within twelve months.