A conversion thesis needs both a feasible site and a supported operating case. More equipment capacity does not supply customers, and a positive spreadsheet does not grant permission to build. Compare a defined project with continued operation before treating the difference as investment value.
Compare alternatives on the same scope
Define what “keep operating” actually requires: necessary repairs, continuing service, rent or ownership costs, operating labor and near-term capital. Then describe the proposed retrofit or conversion, its changed services, dates, layout and equipment. Do not make the baseline artificially free of maintenance or capitalize a speculative value increase as cash already earned.
The tool compares operating cash before financing and income tax, with capital outlays entered separately. Use nominal dollars and a common timeline; include working-capital cash effects consistently in the operating definition or a documented cash schedule. Do not also subtract an internal reserve transfer as if it were a supplier invoice.
Establish physical and regulatory feasibility
Obtain a qualified layout showing parcel boundaries, structures, equipment dimensions, approaches, circulation, waiting space, access and neighboring constraints. Confirm utilities against actual connected loads, supply, service and discharge requirements. A universal acreage minimum, an equipment rating or a generic electrical-service range cannot establish fit.
Use parcel evidence and access and throughput to separate records, authority questions and operating constraints. A permitted existing use is not automatic approval for changed buildings, services, access or hours.
Keep process wastewater, sanitary discharge and construction/stormwater distinct. NYSDEC construction guidance includes jurisdiction-specific and sub-acre triggers; an “over one acre” shortcut is incomplete. Have the engineer and authority determine applicable coverage and approvals. NYS Department of Environmental Conservation: Stormwater permit for construction activity. Existing process-water authorization also needs its own scope and change review.
Build a complete dated project scope
| Evidence | Question before relying on the budget |
|---|---|
| Equipment and controls | Which configuration, capacity assumptions, commissioning and support are included? |
| Building and civil work | Demolition, foundations, access, drainage, utilities and restoration? |
| Professional/authority work | Design, applications, review conditions, inspections and testing? |
| Operating interruption | Which services close, which costs continue and what demand can actually return? |
| Cost uncertainty | Quote validity, exclusions, tax, freight, disposal, contingency and milestones? |
Manufacturer evaluations can inform configuration and equipment condition, but commercial claims or testimonials are not proof of local demand, savings or attainable return. Sonny's Car Wash: Site and equipment consulting. Obtain written scopes from relevant professionals and actual suppliers instead of a generic conversion price or completion timetable.
DOE FEMP's life-cycle acquisition material is useful for considering operation, maintenance and end-of-life costs. Its federal context does not impose a private car-wash investment standard, and its rates are not defaults for this tool. US Department of Energy · FEMP: Take Five: Life Cycle Costs for Acquisition.
Reproduce the fictional partial-retrofit case
The teaching project pays $300,000 at month 0. Baseline operating cash stays $10,000 monthly. Proposed cash is $5,000 for months 1–6 and $22,000 for months 7–60, with no later capital outlays. This is an arbitrary partial retrofit, not an estimate of a New York full conversion.
Months 1–6 incremental cash = 5,000 − 10,000 = −5,000 each Months 7–60 incremental cash = 22,000 − 10,000 = 12,000 each Month-60 cumulative = −300,000 − 6 × 5,000 + 54 × 12,000 = 318,000
The peak incremental deficit is $330,000 at month 6. First cumulative recovery occurs in month 34. With an invented 12% effective annual discount rate, the equivalent monthly rate is about 0.9488792935%, giving NPV $148,357.12. Zero discount makes NPV equal the undiscounted total; omitting the rate leaves NPV unknown.
Test delay, overruns and weaker contribution
Load the fictional delay to extend the lower cash phase by two months while keeping the same month-60 endpoint. Ending incremental cash falls to $284,000. A separate 20% month-0 capital overrun, unchanged operating cash, ends at $258,000. These are alternatives, not additional money available simultaneously.
Edit cash assumptions for weaker demand, wage coverage, repair cost or service mix using actual evidence. Extra revenue is not net cash benefit: subtract the associated variable and step costs. The contribution method, replacement labor and utility reconciliation help support those inputs.
Read recovery and NPV within their limits
The monthly model places opening capital at time 0 and later flows at month end. Convert an effective annual rate with (1 + rate)^(1/12) − 1; do not simply divide it by twelve. It includes no tax, debt schedule, terminal sale value or automated IRR. First recovery can be followed by another deficit; the result flags that reversal rather than promising permanent payback.
Peak incremental deficit is the difference between alternatives, not all cash needed to run the site. Use reserve funding, written financing and consolidated runway for fundability, plus daily evidence when due dates matter. The operator owns assumptions, professionals own technical conclusions and the editor reviews the method quarterly.
Download the blank evidence worksheet
Download the fictional teaching case v1
Questions before using the result
Does a positive NPV establish a feasible conversion?
No. It describes only the entered cash assumptions and discount rate. Site, demand, authority, scope and funding evidence remain separate.
What is the minimum parcel size?
This guide supplies no universal minimum. Test the actual equipment/layout, circulation, setbacks, access, utilities and authority requirements.
Is project capital the same as an equipment quote?
Not necessarily. Include all required work and timing, while avoiding costs already included in another input.
Why does the tool show no recovery?
Cumulative incremental cash does not recover the deficit inside the entered horizon; the tool does not invent later benefits or resale proceeds.
Connect the next evidence question
Equipment condition and downtime. Each workbook has its own scope, written method and fictional case. Reconcile definitions before manually carrying a result into another review.
Sources and scope
Official and original sources checked October 17, 2026. These sources support the identified rules and methods; they do not verify a particular business or property.
- NYS Department of Environmental Conservation — Stormwater permit for construction activityConstruction-stormwater coverage includes jurisdiction-specific and sub-acre triggers; authority/engineer must determine actual project scope.
- Sonny's Car Wash — Site and equipment consultingManufacturer describes site/equipment/water-management evaluations. Marketing claims and testimonials do not verify demand, savings or returns.
- US Department of Energy · FEMP — Take Five: Life Cycle Costs for AcquisitionAcquisition, operating, maintenance and end-of-life cost framework in federal procurement context. No federal discount rate or private car-wash requirement is adopted.
Continue your review
Verify the revenue · Normalize earnings · Model the cash flow