The U.S. car wash services market ended 2021 with a value of $14.67 billion, and it is expected to grow at an annual growth rate of 5.5% from 2022 to 2030. With more than 8 million cars visiting professional car washing services daily, starting a car wash business can be a fruitful venture. Below you’ll find seven essential steps that will show you how to start a car wash business.
Starting a Car Wash Business in 7 Steps
1. Research the Types of Car Washes You Could Operate
Your first critical step to starting a car wash business is understanding the different car wash operations. There are both automatic and self-service car washes. An automatic car wash uses machinery to do most of the hard work, meaning the cars get washed with little to no human intervention. A self-service car wash, also known as a manual car wash, is one where the car owner or employee use tools and equipment to wash the cars themselves.
More types of car washes include:
- In-bay car washes are structures where the vehicle enters and remains stationary while machinery moves around it to perform the wash.
- Tunnel car washes have the vehicle move through large, stationary wash equipment. Usually, the vehicle is placed in neutral and then moved along a conveyor belt through the wash.
- Touchless car washes use powerful chemicals and high water pressure to clean cars.
- Friction car washes clean cars using brushes and cloths that spin and rotate to provide friction against the car’s surface.
2. Draft a Solid Business Plan
Every potential business owner should start with a business plan. A traditional business plan includes an executive summary, a company description, a market analysis, organization and management details, service and product line information, market and sales plans, location options, and financial plans.
3. Form a Legal Business Entity and Obtain the Necessary Business Licenses
Once you have a solid car wash business plan, it’s time to decide which type of business entity your car wash will be. The different types of business entities are:
- Sole Proprietorship
- Partnership
- Corporation
- S Corporation
- Limited Liability Company (LLC)
Once you select a business entity structure, you’ll need to complete the business registration process and register your car wash name with the state where it will reside. Next, you need to get a federal Tax ID number which essentially acts as a Social Security number for your business.
The next important legal step for your car wash business is to obtain the required permits and licenses. Virtually any business will need a general business license. From there, your building will need an occupancy license to state that your facility is safe for employees and customers to use.
Since car washes handle wastewater that can pollute the surrounding environment, your car wash business will need to obtain an environmental permit. This permit will ensure that your business’s wastewater is treated correctly and disposed of to minimize environmental impact.
With customers’ vehicles in your care, you’ll want to purchase insurance for your car wash business. Depending on your business structure, there are several types of business insurance you may need:
- General liability
- Garage keeper liability
- Commercial property insurance
- Workers’ compensation
4. Estimate Your Startup Costs and Obtain Business Financing
The costs associated with starting a car wash business vary drastically. Traditional car wash businesses, like those that exist at a commercial location, can cost anywhere from $500,000 to $3 million or more to start. It depends on if you are buying land and building a completely new structure for your car wash business, you are purchasing a pre-existing car wash, or you are renovating an existing structure that meets the demands of a car wash location.
When determining a startup budget, you’ll want to consider the costs associated with the licenses, permits, and insurance listed above. In addition to those business expenses, you’ll need to budget for cleaning supplies, equipment and parts, building and land costs, initial marketing materials, and personnel.
How will you obtain the money to start your car wash business? Well, there are a few business financing options:
- Loans: You can obtain a bank loan or a U.S. Small Business Administration Loan if you meet the qualifications.
- Business line of credit and credit cards: This is a relatively flexible way to borrow money on an as-needed basis.
- Business grants: Grants are appealing as they provide funds you do not have to pay back. Most grants are highly competitive and have specific requirements.
5. Purchase Top-quality Equipment and Supplies
Choosing reliable and top-quality car wash equipment and parts will be key to the longevity of your car wash business. A car wash will need various brushes, chemicals, parts, and tech supplies to function at its best. Always partner with a reliable, experienced supplier for equipment and parts. Avoid trouble down the line by having a partner with a robust service network.
6. Construct Your Car Wash
Building a car wash is a challenging undertaking. It’s a good idea to start by taking some educational courses to understand the logistics behind car wash construction and maintenance.
7. Attract Customers With an Effective Marketing Strategy
As with any business, marketing is vital to achieving long-term financial success. Ensure your car wash business’ Google Business Profile is up to date with accurate contact information and develop a strategy to be present online via a website and social media.
In addition to these basic marketing strategies, car wash businesses can benefit from loyalty program marketing (monthly or annual memberships), customer referral marketing, and getting involved in their city’s communities.
Here To Help You Build and Maintain a Successful Car Wash Business
Each of these seven steps comes with a multitude of nuances and details you’ll have to work through to build your car wash business. Thankfully, you don’t have to go it alone. National Carwash Solutions (NCS) is an industry-leading car wash solution provider with decades of carwash experience. NCS is ready to help you build and maintain a thriving car wash business by offering high-quality products, top-notch service, and plenty of educational resources. Contact NCS today.
