Thinking about buying a car wash? You’re not alone. Even in today’s economic uncertainty, car washes are among the most profitable businesses for entrepreneurs to consider investing in.
Knowing how the car washing business operates and what to expect is pivotal before diving into this industry. If you’re interested in starting a car wash business but don’t know where to start, this guide will give you some information and insights.
Choosing a Car Wash Business Model
Determining which car wash business model is suitable for you will depend on the location of your business, the amount of investment capital you have, and the number of workers you plan to employ, among other considerations.
Car Wash Industry and Market Trends
According to data from the American Car Wash Association, the number of drivers who regularly visit carwashes has increased by nearly 30% since 1994. In addition, annual revenue from car washes in the United States continues to rise steadily despite economic recessions. The U.S. Census Bureau found that car wash revenue in America has increased threefold over the past two decades.
Busy lifestyles mean less time for a leisurely carwash in the driveway on weekends. And consumers are starting to realize that car wash businesses can be better for the environment, not least by using water resources more efficiently. These and other factors mean the growth trend in place is likely to remain so for years to come.
Different Types of Car Wash Businesses
There are a few types of car wash businesses, each with pros and cons:
- Self-service car wash: This can bring you a steady stream of passive income without the need for on-site employees. Drawbacks include the cost of building a multi-bay self-service car wash and the increased water waste compared to automatic alternatives.
- Express exterior or in-bay automatic tunnel car wash: These automatic car wash options offer customers greater convenience, usually for a slightly higher cost than self-service washes. In-bay automatic car washes can wash only one car at a time, while express exterior car washes pull multiple vehicles in rapid succession through a long tunnel. With this option, you may need to hire several wash operators to stay on-site for oversight and customer support.
- Full-service car wash: This model provides a luxury car wash experience. It often includes detailing, headlight restoration, and other services. While this type of car wash facility tends to attract higher-end customers, operating expenses and necessary manpower can be substantial.
Pros and Cons of Owning a Car Wash Business
The most significant upside to car wash franchises is the attractive profit potential they offer to business owners. However, since modern car wash facilities require regular upkeep, repair and part replacement, wash owners must invest heavily in equipment maintenance and experienced labor to keep operations running smoothly. Purchasing chemicals, cleaning supplies and other items will also take a significant portion of your operating budget.
Car washes also tend to be busier during the warmer months, so expect a drop in revenue as winter approaches. Remain mindful of seasonal trends and set aside a portion of spring or summer profits to help finance repairs, payroll, and other expenses in the off-season.
Understand the Target Market and Customer Demographics
Car wash business owners must have a comprehensive understanding of their target market and the demographic composition of their preferred customer base.
The type of customers your business attracts will depend heavily on the wash location and the services you provide. In some areas, customers may prefer to sacrifice convenience for affordability. In others, a higher volume of wealthier customers may rely on the red carpet treatment of full-service top-tier car wash care.
This kind of information can be gathered with an expert site analysis created by National Carwash Solutions or any reputable car wash provider. You want to be armed with real data and information, not guesswork, regarding location, compliance with relevant laws (licensing, permits, insurance), facility design, contracts, construction, equipment supply and installation, and more. If this interests you, contact us and someone will get in touch to assist you.
Understanding what your target customers want and how much they’re willing to pay will help inform an accurate price point for various service tiers.
Essential Steps to Start a Car Wash Business
Opening a car wash business is much easier once you understand a few key steps:
- Determine what type of car wash business you want to start (self-service, automatic, or full-service).
- Decide on a business structure and business name.
- Create a detailed business plan.
- Meet with lending institutions or angel investors for funding.
- Register your business.
- Acquire necessary permits and licenses.
- Purchase equipment and hire employees.
- Market your new car wash business.
- Open your doors to the public.
As you might expect, this is only a brief overview of the process. It’s best to “do your homework” before starting your car wash business.
Staffing, Operations, and Customer Service
In many cases, you’ll have to hire staff to direct vehicles, assist in washing and respond to customer service queries. Smaller-sized car washes may only need one or two full-time employees, while luxury car wash businesses may need a dozen or more. Carefully consider your employees’ starting pay, the benefits you’ll offer and their job duties.
Car Wash Equipment and Technology
Consider the type of equipment to install in your car wash and how many different service functions your facility will support. While newer equipment and technology costs more upfront, it is less likely to break down during peak business hours, providing visitors with a better customer experience.
As with everything in life, a cheaper upfront cost can lead to costly repair and replacement costs down the road. It’s important to consider the benefit of higher quality upfront, and state-of-the-art components that add value. Paying more for longer-lasting wash systems, touch-screen pay consoles and other high-end equipment provides a higher ROI than cheaper, outdated alternatives.
Growth Strategies for Your Car Wash
With your new car wash up and running, you can begin growing your business by offering loyalty discounts to repeat customers or providing an additional free service for a limited time. However, the best way to ensure your car wash grows and prospers is to partner with a trusted B2B company that provides ongoing guidance and professional assistance.
At National Car Wash Solutions, we provide all the equipment, chemicals and technical support needed to keep your business running smoothly. We understand the challenges of operating a successful car wash and take pride in helping our valued clients with everything from replacement part procurement and installation to professional training on equipment maintenance fundamentals. We work closely with some of the biggest names in the car wash industry, so you can rest assured your car wash equipment, components, and chemicals are always top quality. Contact us online today to learn more about how National Car Wash Solutions can help your business grow.
