Do you want to know how to start a carwash business? If YES, here at Nairalanceblog is a comprehensive guide to starting a cashless and inexperienced car wash business .
Okay, so we provide a detailed sample of the model car wash business plan. We also took it further by analyzing and devising an example of a car wash marketing plan, supported by actionable guerrilla marketing ideas for car wash companies.
In this article, we will consider all the requirements for starting a car wash business. So, put on your entrepreneurial hat and let’s move on.
Why Start a CarWash Business?
If you are thinking of a business, you can start with a simple budget, but one that will pay you a good return on your investment and you will not need professional skills or certification, starting a car wash may just be the business for you.
In addition, the car wash business is recession-proof, as people will have to wash their cars, regardless of the state of the economy.
However, there are some factors that you need to consider before starting your car washing company, such as the type of car you plan to wash, the specific type of service (self-service, hand washing, mobile, automatic or a combination) that you would offer, your equipment and labor costs amid all the other factors.
As with any business, the first thing you need to do is conduct a feasibility survey in the area in which you will operate your car wash business, to determine how viable the business would be in that area, depending on the competition, demographics and several other factors.
To get an accurate and unbiased report, you may need to hire a reputable business advisor to help you accomplish this task. This will allow you to enter the industry with realistic expectations.
The article below will help to clarify more about how to start a car wash company especially in the United States of America.
How to Open a CarWash Business – A Complete Guide
• Industry overview
According to IBISWorld, there are no companies with a dominant market share in the carwash business sector.
The car wash business sector is one that generates $ 10 billion in revenue annually in the United States of America.
The industry for the period from 2011 to 2016 grew at a rate of 3.1%. There are more than 60,000 car wash companies in the United States of America employing more than 208,000 people.
The stability of the industry in the period 2011 and 2016 can be attributed to the improving economy, which saw consumers having more disposable income per capita to spend on discretionary services.
In the periods from 2016 to 2021, operators in this sector will continue to benefit from the increase in disposable income per capita that will be of great benefit to the sector, even if more people are expected to own cars in the coming years.
The car wash sector of cars has a moderate level of capital investment that varies according to the type of operation.
Operations that require more labor, such as self-service and in-bay car washes, have less capital intensity when compared to car washes with transportation and automatic detailing. However, capital is expected to increase.
Globally, according to the International Car Wash Association, there are more than 150,000 retail car wash locations, with Germany having the highest number of commercial car washes.
The car wash sector in the United States of America has about 15,000 establishments, comprised of companies that are in one location and companies that are in multiple locations, generating annual revenue of $ 8 billion.
Services in this sector include full and automatic service car wash facilities, bus washes, truck washes and vehicle detailing services.
According to statistics from Trading Economics, total vehicle sales between the periods 2093 to 2015 averaged over $ 15 million. Vehicle sales during the recession reached $ 9 million in 2009.
This is because car sales are an indicator of how the car wash industry is likely to perform and, therefore, the recent growth in car sales to $ 17.16 million in 2006 shows that customers have.
Globally, the car wash industry is expected to reach close to $ 27 billion in 2021, which will be driven by a steady growth in more people buying cars globally.
However, there are technological advances that have helped commercial car washes to wash cars better than those that do it themselves.
In addition, the popularity of car washes is driven by the fact that more people are aware of their environment, where car washes cars now use water properly, in addition to properly disposing of solid and water waste.
• Demography and Psychography
The demographic and psychographic composition of those who need car wash services varies from those who own non-commercial vehicles to those who own commercial vehicles, like everyone who owns and drives a car or any form of vehicle, at some point, requires a type of professional washing.
This means, therefore, that the demographic composition of those who need car wash services cannot be defined or reduced for a group of people, as it includes domestic, government and commercial customers.
List of Car Wash Niche Ideas You Can Specialize In
The car wash business is one in which companies need to stand out in order to obtain a fair share of the target market.
To do this, companies generally choose one or two niche areas to focus on in order to offer the best services to their customers.
However, while large car wash companies may offer more niches, smaller car wash companies nevertheless need to offer one or two niches.
• Self-Service Bays
• Detailing services
• Car carrier washes
• Automatic washes in the compartment
The level of competition in the car wash sector
The level of competition in the car wash sector is highly dependent on the location of the company, as it is a company that requires physical presence to serve customers and compete with other similar companies in the industry.
Customers do not want to go a long way before they can reach your car wash business, so this means that your business should be strategically placed, for example, close to supermarkets or shopping malls, so that customers can wash their car while buy or cater to any other business.
In order to compete in this sector, small-scale car wash companies that are unable to be in many locations offer personalized and additional services to their customers.
List of well-known brands in the car wash sector
Every industry has brands that are well known due to the various characteristics they have, which they can include; excellent relationship with the customer, marketing and promotional activities, quality of service or prices et al.
The car wash sector is the same and therefore has very popular brands among all stakeholders in the sector.
Below are some of the well-known brands in the car wash business in the United States of America;
• Mister Car Wash
• Autobell Car Wash
• Wash Depot Goo Goo
• Express Wash Inc
• Blue Beacon International
• Boomerang car wash
• Quick car wash Quack
Technological advances in products and equipment have had a huge impact on the car wash industry in the past decade. This was a major improvement for the sector and saw companies obtaining a quick return on investments.
The Internet has caused a revolution in the way car wash companies attract and retain customers, as customers can now go online to check availability. reviewing other customers before deciding to visit the car wash.
A negative customer review is likely to cause a company to lose new and existing customers.
This made car washes very careful in the way they deal with their customers, so that a positive review creates more customers for the business.
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Domestic customers are responsible for about 76% of those who used the services in the company. car wash industry.
These domestic customers are usually between 16 and over and have a valid car and driver’s license.
Those with high incomes represent those who have the greatest demand for car wash services.
The employment of workers in the car wash sector is likely to increase by 20% between 2010 and 2021.
However, that number will not remain stable especially as more car washes are favoring automatic transporters to full-service car washes, an action that likely to cause a decline in the employment of workers.
Starting your business from scratch or buying a franchise is an important option that you need to consider when starting your own car wash business, as each option comes with its pros and cons.
Starting your car wash business from scratch also has two options: you can buy or lease a location and build your car wash business from scratch or you can buy an existing car wash business and decide to rename and use it it for your business.
Starting a business from scratch can be very demanding, as you will need to be proactive with your services, promotions and prices.
It also involves a lot of paperwork, but it allows you to take charge of your business, which means that you can change ineffective strategies whenever you feel necessary.
Buying a franchise may seem like a better option for an entrepreneur who doesn’t care about the paperwork and having to make advertising and promotional decisions for the car wash business, as all of this will be handled by the company that you purchased your franchise from.
However, before purchasing a franchise, you must ensure that you properly study the business from which you intend to purchase a franchise in order to work with a company that will allow you to become successful.
Possible threats and challenges you will face when starting a car wash business
Challenges and threats are an integral part of running any business, and the car wash business is no different.
So these are the challenges and threats that you are likely to face when starting your car wash business;
• Intense competition,
• An unseen location that will lead to a low number of customers,
• An economic crisis that will cause many people to prefer to wash their cars or not to wash them as regularly as they should.
Starting a Car Washing business legal matters
• Best legal entity to be used in a car wash company
Deciding which legal entity to use for your company The car wash business is very important as this will decide the size of your car wash business in the future.
There are basically four types of legal entities available for a car wash company in the United States of America and they are; exclusive ownership, partnership, corporation and limited liability company (LLC).
Each legal entity has its pros and cons and you will need the help of a lawyer or accountant with experience in your type of business to help you decide which legal entity best suits your business.
The only legal type of ownership The entity is an entity that is not only simple to start, but also inexpensive, especially for entrepreneurs who are starting on a low budget.
Here, the owner operates his business entirely and is personally responsible for any debts that the business may incur during the course of its operation.
This type of legal structure is, however, very risky, especially if you have a lot of personal assets or employ a lot of people to work in your car wash business.
The type of partnership of the legal entity is also that it is not as expensive to start a company as the main thing needed is an agreement between the individuals who are starting the business.
Profits and losses in this type of legal framework are equally shared between the partners and each partner is personally responsible for any debts that the company may incur during the course of its operations.
Taxes on this type of structure are paid personally by the partners, which is a great advantage.
The Corporation (Inc. or Ltd) the type of legal entity is one that is of two types; S Corp and C Corporation.
A corporation is a legal entity considered separate from the owners. It is a more complex type of legal entity, especially when compared to a single company or partnership.
However, in a corporation, it is necessary that a stock certificate be issued, that annual meetings are held with the minutes of the meetings being recorded and that the directors are elected.
However, although C Corporation is subject to double taxation, S Corp is taxed as a partnership structure.
The type of legal entity of the Limited Liability Company (LLC) is one that is generally favored by most companies in the industry. United States of America due to the fact that it has the best characteristics of a corporation, partnership and exclusive ownership.
However, please note that each state has its own set of LLC statues, so you will need to visit state regulatory agencies or an attorney to learn how these statutes are likely to affect your car wash business.
Having insurance coverage is very important for companies and even individuals in the United States of America.
An insurance coverage will help protect the entrepreneur from having to deal with any liabilities that may occur during the administration of his own pocket, which means that, if there is any damage to your customer’s car during the washing process, your insurance coverage will be very useful.
It is very important to know which insurance policy is best for your car wash business. Therefore, you should look for an insurance agent or broker to help you decide which policies will be best for your business and how much to consider in your budget.
Some of the basic insurance policies that you would need to purchase to successfully start your car wash business in the United States of America are;
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• General Insurance
• Health Insurance
• Liability Insurance
• Auto Insurance
• Insurance Workers Insurance
• Payment protection insurance
• Policy group insurance for business owners and
• Property insurance
• Liability insurance on employment practices
Intellectual property protection / trademark
The car wash business is a service oriented business and, as such, if you intend to start this type of business, you do not have to worry about requesting intellectual property protection for your business.
If you find a new perfect car wash solution that will help other car washers to be more efficient, contact an attorney to help you register an IPP with the USPTO.
However, it should be noted that those who apply for IPP in this sector generally do so by their company logo, slogan, jingles or any pending properties they own. ?
The car wash company is a service-oriented company that is more dedicated to the skills of professionals and, therefore, does not require any kind of professional certification before you can start or attract customers to the business.
Although it can be a bonus to have a good knowledge of different cars and how they work, it is not even necessary, because all customers want to have their cars cleaned well.
However, there are associations with which joining can increase the reputation of the car wash business, such as the International Car Wash Association, but again, customers don’t care about all of that.
List of legal documents you need to run a car wash business
It is very necessary that you have legal documentation in place before starting your car wash business in the United States of America.
If you are serious about starting this car wash business, you should conduct a thorough search by going to the regulated authorities and knowing what documents will be required of you to enable you to run your business successfully.
Therefore, some of the basic legal documents that you must have in order to legally run your own car wash business in the United States of America include:
• Certificate of incorporation
• Trade license
• Federal tax identification number
• Commercial tax license
• Income tax withholding
• Unemployment insurance tax
• Business plan
• Operational contract
• Insurance policy
• Employer identification number (EIN)
• Internal Revenue Service
• Zoning variations
• Sales tax registration certificate
• Environmental and safety inspection
How Much Does a CarWash Business Cost?
While it may seem like the car wash business is simple, if you don’t have the necessary funding to start that business, it will remain just a business concept that will never materialize.
This is where your business plan comes into play, as this will help you to convince investors about the seriousness of your car wash business and therefore allow them to invest in the business.
Therefore, some of the financing options that you can explore when obtaining seed money for your car wash business are;
• Funding with personal savings and selling personal shares
• Obtaining a loan from the Small Business Association (SBA)
• Providing subsidized loans to family and friends
• Fundraising from private investors
• Bank loan application
Best location for car wash business
Deciding where to locate your car wash business is very important, as this can be the difference between your business becoming a success or a failure.
You must quote your company in places with heavy traffic, shopping center and residential area; and these locations must be visible and accessible and must allow your car wash business to grow or expand.
One thing to note before choosing a location for your business is that you must first check the zoning locations of the city from which you intend to operate your business, as there are certain places where it is not allowed to run a car wash company.
In addition, checking your city’s zoning regulatory authorities will allow you to determine whether you would need a special permit that will allow you to legally manage your car wash company before buying or renting the location you intend to use.
Therefore, it is essential that you work with a realtor, lawyer, accountant or city planner to get the best deal on a location.
The location chosen for your car wash business should be one that is capable of accommodating the vacuum and drying areas, the pump room, the bays and the administrative offices.
Remember that, most of the time, you will not wash just one car and therefore the space can accommodate more than one car and also cars that are waiting in line to be washed.
How to start Carwash Business: Technical details of Labor
The car wash business is one that requires finances, equipment and human resources to be successful, and in order to start this business, you will need to ensure that you have the necessary funding that will enable you to purchase the best equipment.
However, if you are starting your car wash business on a limited budget, you may be able to purchase some of your equipment as well used, but you will need to ensure that it is in good condition.
A car wash business is a consumer-centered business, so you must have capable hands who understand the business and are not just punctual, but skilled and have excellent communication skills.
The equipment needed to run a standard car wash business depends on the type of services you intend to offer your customers.
Some of the equipment is; high pressure washers, conveyors, mobile washing systems, self-service equipment, cleaning solutions, spotless rinsing, wax, prey, protectors, blowers, dryers, vacuum cleaners, towels, brushes, compressors, pumps, water filtration, water heater water, boilers and extractors.
The employees you will need to successfully run your car wash business are; executive director (owner), administrator and human resources manager, supervisor, accountant, business development and marketing executive, reception manager, car washers, cleaner and security guard.
From the analysis above, you will need at least 10 key employees to run an effective, standard and successful car wash business.
The service delivery process of a carwash company
The delivery of services for a car wash depends on the type of service you are offering your customers.
If you intend to wash your cars by hand, you will have less costs than those using automatic machines to wash your cars.
Washing the car with your hands is a business that requires a lot of work; however, customers generally don’t mind paying a premium price for their cars to be washed by hand, as this usually involves washing the car’s interior and exterior.
Automatic car washing depends on the use of equipment that normally needs to be washed. be replaced every ten years.
However, when using an automatic car wash, the waiting time for cars is generally short, as machines work faster than the human hand. Costs are also relatively inexpensive for an automatic car wash.
There are other services that can be offered in car washing and are detailing services like washing sealants, waxes and carpets that can be done to help maintain or improve the appearance of a car.
Offering this additional service will be very convenient for your customers, as they will be able to wash and detail their cars at once.
Starting a Carwash Business Philippines – The Marketing Plan
• Marketing ideas and strategies
Marketing a business is very essential, as it not only helps to generate revenue for a business, but also allows the business to increase awareness of your brand thereby attracting more customers to it.
Before deciding what type of marketing strategies would be effective for your business, you will need to conduct thorough market research that will allow you to know your target market, understand them and know what they expect from your carwash business.
If you are just starting this business, you may need to check out how your competitors are conducting their own marketing.
Knowing what your competitors are doing and improving what they are doing will make you stand out and allow you to gain a large share of the market in general.
Your marketing executives must also be able to participate in direct marketing to generate more revenue for your car wash business.
Below are the platforms you can use to market your car wash business;
• Be sure to introduce your car wash business to car sales companies, small businesses, government agencies and other industry stakeholders by sending your brochures with information about your services, rates and attached contact information
• Placing ads for your car wash business in local newspapers and magazines, as well as on radio and television stations
• Ensure your company is listed in the yellow pages and online directories
• Participate in direct marketing to generate revenue for your car wash company
• Make sure you distribute brochures and paste brochures in strategic locations
Strategies to boost your perception of the car wash brand and create your corporate identity
The goal of all companies, in addition to generating revenue, is to ensure that the image of your brand is communicated positively to the target market and that there are strategies in place to ensure this.
The internet has made it very easy and inexpensive for brands to raise awareness, as a company can use its social platforms to increase website traffic or to optimize the website for search engines, advertise on other popular platforms, such as blogs and forums, without spending a lot and yet achieving a broader goal than you would have offline.
However, there are other advertising measures that can be taken offline, such as how to distribute leaflets and business cards and paste leaflets in strategic locations.
Other measures are to bring together local and national associations for networking purposes and to participate in automobile events as well.
Below, therefore, are some of the platforms that you can take advantage of to raise your brand awareness and also create a corporate identity for your business;
• Distribute brochures and business cards and also paste brochures in strategic locations
• Encourage your loyal customers to help advertise your car wash business
• Place ads for your business in local newspapers, car magazines and also on radio and television stations
• Promote your business by attending local events in the community you’re operating from
• Join local and national associations to promote and raise awareness about your car wash business.