Scrub Up for Success: How to Start a Car Wash Business
Thinking of opening a car wash? Here's a complete guide on everything you need to get started.
Beginning with market research, we dive into an overview of different possible business models, your expected salary, profit boosters, must-use technology, and marketing tips for driving success.
Market research
As with any business, you’ll have to do some market research before you decide for definite if you want to invest. As of 2021, there are over 150,000 registered car wash locations worldwide, and trends show that this number will continue to grow [1]. You’ll want to gain a better understanding of where you’re thinking about opening your business to make sure it meets your criteria.
Location
Are you thinking about opening in a densely populated area? Turn to your local government or state website to review the demographics of where you’re thinking of opening your car wash. They will likely have statistics that share if people are more likely to walk to work or drive to work. Heavy foot traffic won’t always guarantee heavy car traffic. Have you checked the local car count?
Your location will also impact the prices you charge, and the amount you pay for utilities and rent.
Demand
Is there local competition? Make sure your car was has a USP that will encourage customers to visit your car wash, over a longer-established competitor. When conducting market research, you’ll want to figure out if the local economy in the area you’d like to open is strong enough to support a car wash, something that consumers may view as a discretionary, non-essential spend.
Choose your car wash business model
There are two main types: self-service, automatic bay car washes, and attended, full-service washes. Reflect carefully on which business model works best for your lifestyle and budget.
Self-service car wash
This is where the driver, or car owner, does the washing themselves or drives through an automatic bay washer. This is quite a hands-off role for the owner and is a great source of passive income. Buzz Glover, entrepreneur, and owner of two self-service, automatic bay washes reports that his business typically only requires him to work 7 hours per week. Some of his duties include:
- Disposing of rubbish
- Cleaning car wash bays and equipment
- Emptying vacuum cleaners
- Refilling cleaning equipment
- Checking for broken equipment and carrying out routine maintenance
- Emptying cash containers, counting profits, and bringing them to the bank
- Property maintenance, like brushing up and cleaning posters and signs [2]
It’s important to note that not all self-service car washes work the same way. Some are attended, some aren’t, some have drive-in bays, some are simply a machine where customers pay to access things like car shampoo, wax, and pressure washers.
Full-service models
Full-service car washes offer a complete cleaning service, where customers’ cars are washed for them for a set fee. In some cases, if the inside of the car is being cleaned too, customers will get out, or sometimes leave their car and return for it later.
Full-service car washes can run without an automatic bay. Often, a team of people will work in a conveyor belt style where the car is guided around the premises to receive different treatments. These might include a normal wash, dry and wax, full valets, and auto detailing.
Financing
How do you plan to pay for this business? Consider carefully whether self-funding, a small business loan or partial financing would work best for you. It’s best to consult a financial advisor and accountant before making a decision. Below are the costs that you must consider.
Start-up costs
There are several fixed start-up costs for a car wash business.
Property and site costs include the grounds and a building if you choose to have a customer waiting area. At the very least you’ll need small premises for an office and a staff restroom. Also, consider the price of installing ramps and drainage systems.
Equipment can be costly in the beginning. It includes special brushes, cloths, sponges, towels, and the installation of an automatic bay.
An essential early investment is your point of sale (POS) system. If you operate a self-serve wash you might choose to install a POS system that customers can operate themselves in order to activate washing services. Or in a full service, you can install your POS software into a portable device, such as an iPad or tablet, that attendants can bring with them to greet customers as they arrive.
Recurring expenses
Once you have enough to cover your initial investment, you must consider the ongoing expenses linked to the business. The cost of these expenses will depend on the quality of the products you use, whether or not they are environmentally sustainable, and where you choose to source them from.
- Utilities: cleaning chemicals, bin bags, hoover bags, replacement equipment.
- Advertising and marketing: posters, signage, online advertising campaigns
- Labour
- Repairs
Earnings and profits
How much can you expect to earn as a car wash owner?
Annual car wash income is difficult to estimate because it depends on the type of car wash you own, how much you charge per vehicle, your recurring expenses, and your location. One estimate for in-bay automatic car washes puts the average car wash owner’s salary at around $86,500.
Professional fees and permits
Fees and permits vary greatly by area. Some permits you might need include a licensing fee to officially register your business with the government, a trading license, and a license to play music at the car wash.
You will also need permission from your water and sewerage provider to discharge any effluent, such as dirty water and shampoo run-off from cleaning vehicle exteriors, into their sewer (whether it's a foul or surface water sewer). In rented premises, you may also need permission from your landlord [3].
How to increase sales
Regardless of the model you pick for your car wash, there are some extras you can include to boost profits and add a quirky USP to your business. Increase profitability by considering the following extra revenue opportunities.
Vending machines and pay-per-use machines
Include a pay-per-use machine that provides short top-ups on some car essentials:
- Screenwash
- Engine water and coolant
- Tyre pressure
You could also include a vending machine with things like light headlight bulbs, interior car wipes, hand sanitizer, de-icer spray, ice scrapers, air freshener, aux cords.
Add a coffee machine and a vending machine stocked with snacks and drinks for those customers who are waiting to pick up their car from a valet/detailed service clean.
Loyalty program and discounts
Build your customer database using your point of sale. You might do this by offering customers $5 off their next wash when they the mailing list, where they will also receive exclusive discounts. If customers don’t sign up, ask them to join the texting system where they’ll be sent a one-time discount code for $3 off any wash.
If you’re created a loyalty program, you could attribute ‘points’ at different values for different washes. After a set amount of points has been reached, customers can earn a free wash.
Direct marketing
SLAM car wash reports that 75% of customers visit less than three times a year, 58% only come once a year [4]. Therefore, sending reminders via direct marketing, inviting them to return to your car wash can be very effective.
Use the database you’ve built to review how often customers use your services, and the type of wash or detail clean that they usually buy. Use this information to create more targeted communications in order to increase sales.
Fundraising event
Build a program where you give a local sports group or charity organization a code that takes some money off each transaction. For example, if you knock off $2 per wash when the code is entered, you’ll donate that $2 to your chosen organization. Run the campaign for 6 months, and at the end of the timeframe, use your POS reports to review how much money you’ve raised.
You can post a large cheque of how much you’re donating, giving good publicity to your business and the charity. Fundraising events show you’re committed to a good cause, you’re willing to give back to your local community, and it’ll drive good business to your car wash.
Drive profits with ease
When building a business, you’ll need strong foundations to support your growth. Point of sale (POS) systems work as the backbone of your Car Wash business. Designed to work as a complete business management system, you can control all vital aspects of your company from one cloud-based system.
Receive detailed analysis on the areas that matter to your business:
- Sales reports filtered by service, time, trend, or employee.
- Multi-award-winning inventory management.
- Automated orders that purchases stock once it falls below a certain level.
- Customer management systems that save customer contact details and shopping preferences for more targeted marketing.
- Integrations with over 100 apps including marketing, accounting, bookkeeping, and loyalty program apps.
- Employee management for more efficient scheduling and payroll.
If you’d like to learn more about our industry-leading software, request a free callback with one of our experts.