A Guide to Starting Your Car Wash Business in 2023
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In the 21st century, a car wash business is one of the most productive businesses anyone can own. Having your own car wash business is fun, interesting, and highly profitable if you have the perseverance and business skills for it.
Thanks to the tremendous improvements in innovation and technology, we now have a significantly higher volume of cars and car stores. Adapting to market dynamics, modern-day car washes now offer additional services besides just washing, such as cleaning, coatings, rebuilding, and more.
Similar to every other business, starting your car wash business will need you to go through a few initial steps. In addition to the investment, each phase will require your attention in the future, followed by a clear business plan, attention to detail, and other factors if your business is to flourish and earn profit.
Steps to Starting Your Own Car Wash Business
- Craft a Detailed Business Plan
- Select a Location
- Visit a Few Car Washes
- Conduct a Competitor Review
- Obtain the Required Licenses and Permits
- Consider Small Business Loans
- Secure an Insurance Policy
- Company Registration
Steps to Starting Your Own Car Wash Business
As mentioned earlier, starting your own car wash business can be fun and profitable if you are someone determined to put the time, effort, willingness, and perseverance to the test. However, in addition to your investment, a car wash business requires extreme attention to detail and knowledge about aspects relevant to the car wash industry.
You aren’t the only one who has ever started thinking of owning a car wash business. While you lay out the pros and cons and take into account the financial considerations required, you are still far from starting your business.
However, if you take detailed steps and the math adds up, you can turn this aspiration into an amazing business venture and be your boss. Here’s how you can get started with your car wash business in 2023.
Craft a Detailed Business Plan
Irrespective of the kind of work you do, a strong, detailed, and thorough business plan is the base of every foundation. And starting your car wash business needs a business plan that outlines all your inspirations, plans, marketing strategy, financial projections, associated costs, and every other related aspect.
Before embarking on your car washing venture, take into consideration your expected financial performance, profit percentage, and probability over the next three years. Having a solid business plan will not only help get your business off the ground but will also simultaneously pave a roadmap going forward.
Finally, you need a business plan for financial purposes, such as small business loan applications. Before lending you the money, lenders will need to see what your business is and get an overall vision of your enterprise. In such scenarios, business plans act as a guide that will serve as a compelling argument when you are seeking investment.
To sum it up, your business plan must address the following in a detailed yet accessible manner:
- Executive Company Summary
- Company Description
- Market Research and Analysis
- Company Organisation
- Company Management
- Service/Product Line
- Sales and Marketing
- Funding Requests and Applications
- Financial Forecast and Projection
Yash Gupta
Select a Location
Anyone who has ever owned or run one knows that location is key to starting a car wash business. The majority of the studies have shown that every car wash business gets its customers within a 15-km radius of its location. Therefore, it is a given that you select an area that has residential complexes in its vicinity.
The larger the population, the higher the number of cars present in that locality. Alternatively, people tend to have a car wash business located directly on the service road exit of any main road. This will make passersby notice your business while making it easy for them to access it by using the exit provided.
When scouting for a location, you must completely avoid narrow roads as they are prone to causing problems, resulting in the loss of both existing and potential customers.
Finally, ensure that your location is in line with the size of the plot you require for your business. An average-sized car wash generally needs around 1500 square feet of space to fit multiple sections, a workshop, and a waiting area.
Speaking of locations, it can be beneficial to work alongside a real estate agent, city planner, lawyer, or accountant to get the best deal on your scouted location.
When selecting a location for your car wash, ensure that it has the following characteristics:
- Ease of Access
- Highly Travelled Road
- Ample Space
- Zoning Laws and Relevant Jurisdictions
Visit a Few Car Washes
If you’re getting into the car wash business, you not only need to know the basics but also need to keep up with the latest trends and technologies in a highly dynamic market. The best way to stay on top of all this is by visiting a few car washes before you start your own business.
A few visits to different car washes will give you an idea of the type of car wash business you wish to have, such as self-service, automatic, waterless, or full detailing. Talking to car wash owners, suppliers, and equipment manufacturers will help you understand the entire business from all sides.
Not only will these visits help you with the business, but they will also help you considerably with shortlisting a location, vendors, suppliers, manufacturers, and so on.
Irrespective of the kind of work you do, you need to be aware of the constant competition prevailing in a highly dynamic modern-day market. Banking on the exact principle, you need to first investigate and review all the car wash competitors in your area.
Once you have fixed a location, the next step for you is to visit every car wash in a 15-km radius. This will require you to visit a few car washes to help you get an idea of the kinds of services offered, the pricing, customer statistics, and their business marketing strategy.
Every car wash will have a different volume of customers. Some car wash businesses will have a low customer volume, whereas others will have a high volume. In such cases, ensure that you figure out the factors that are contributing to this.
Following a thorough competitor investigation, you can then conduct a thorough competitor review and assess the entire competition. All this information will help you gain insight into whether it is beneficial to start a car wash business in your selected locality.
Obtain the Required Licenses and Permits
Before you can start your car wash business, you will need to get your paperwork in order. Sloppy paperwork will only delay the start. Similar to other businesses, a car wash business requires you to obtain a set of permits and licenses based on the type of your business, location, regulations, and zoning laws put forth by the relevant jurisdiction.
You must obtain every last piece of documentation required, as failure to obtain the right licenses and permits can result in your business being shut down. Moreover, your car wash business needs to comply with the state and local government’s laws regarding mitigation and water contamination.
These rules are designed explicitly to help tackle water pollution, reduce harmful carbon emissions, grit-trap waste disposal, and regulate both wastewater and fuel tank storage.
To know about the exact permits and licenses required to open your business, you can check with your country’s relevant SBA (Small Business Administration) website.
Not only are you required to obtain the mandates, but you also will need to keep track of all the renewal dates and have a spare copy of every permit and license for your business records. Furthermore, you will need to put a copy of your car wash license in your car wash for customers to see it.
Consider Small Business Loans
Starting your own car wash is expensive. Even if you acquire a hefty chunk of investment early on, the majority of it will be spent primarily on acquiring machinery. Whether you choose to buy or rent, you will need to set aside a certain amount to keep your business running regularly.
All this can leave you with little to nothing while your business is getting off the ground. But thanks to small finance companies, it needn’t be expensive but affordable as your business gets up and running.
Whether you need to secure a large loan, rollover credit, or require money for incremental purchases, you can secure small business loans for all your business-related expenses. Furthermore, these small financing companies also tend to offer you additional incentives such as cash back, travel rewards, and more.
Shruti Kasera
Secure an Insurance Policy
Finally, having put all that money into your business, the next thing you need is rock-solid business insurance. Get yourself a small, solid, and comprehensive small business insurance policy based on the size and type of your business.
When it comes to car washes, the frequency of unforeseen accidents and damages is relatively high. This is when you need your policy to cover the majority of that bill. Not only do you need an insurance policy, but you will also have to ensure that your car wash business has good general liability followed by workers' compensation insurance.
To get yourself the best policy, it is fruitful to consult with either a business insurance agent or a business lawyer, who will be able to dish out more specific information and give you the policy that fits your business best.
Company Registration
After you’ve taken care of all the key factors, you’re left with just one remaining yet vital step. Having gone through all the above-mentioned steps, you are just one step away from having your own car wash business.
Before you launch your operations, you must get your company registered to convert it into a legal business. Setting up a legal business includes deciding on a name for it and trademarking it. Once you have a trademarked business name, the next step is getting your company registered and forming a legal business structure.
Ensure that you scout through several business names to make your business unique and avoid legal disputes in the future. A trademark name will not only keep legal issues at bay but will also open doors to new investors and lead to brand building.
Following the name, you will then need to get your Employer Identification Number (EIN) for your business. Also known as the Federal Tax Identification Number (FTIN), having the same is crucial for registering your business and acquiring bank loans.
Conclusion
Owning a car wash business can reap great benefits when managed with the utmost decency and professionalism. However, before one starts making profits off the car wash, there are plenty of boxes that need to be ticked off when starting the car wash business.
When starting a car wash business, you have to make sure you take your time and do it right. If you do it right the first time, you save on a considerable amount of paperwork that may arise and interfere with your day-to-day operations.
With the steps and strategies mentioned in our article, not only will you be able to start on a stronger foot, but you will also prime yourself for success down the road. Once you have mapped out your intentions, business operations, and financial needs, you ultimately put yourself and your business at a distinct advantage.
FAQs
What can a small business loan be used for?
You can secure small business loans for all your business-related expenses, whether you need to secure a large loan, rollover credit, or require money for incremental purchases.
Which location would be ideal for a car wash business?
A car wash business located directly on the service road exit of any main road will be beneficial. This will make passersby notice your business while making it easy for them to access it by using the exit provided.
What factors should be considered while selecting a location for a car wash?
When selecting a location for your car wash, ensure that it has the following characteristics:
- Ease of Access
- Highly Travelled Road
- Ample Space
- Zoning Laws and Relevant Jurisdictions
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