Owning a successful car wash business is possible in the U.S. According to a recent consumer study by the International Carwash Association (ICA), more Americans are using professional car washes than ever before. DIY car washing appears to be in decline, with 83% of Americans now taking their vehicles to a car wash instead.
The ICA also reports that car washing businesses continue to thrive. Their conclusion is that Americans like to keep their cars clean regardless of what else is going on in the country. Our guide below explains how to start your own car wash business and includes some helpful tips for marketing and managing your car washing startup.
Car Wash Business Owner Requirements
Car wash owners aren't required to complete special training or earn an educational degree to operate a car wash business. However, any knowledge and experience you gain about the car wash industry and how to run a small business can help you succeed. If you need more information before you begin to plan your business, consider researching the following to learn more about:
- Car wash equipment
- Customer demographics
- Local competitors
- Pricing for services
- Real estate leasing or buying
- Startup costs
- Supplies and costs
- Types of car washes
- Zoning
Personal experience is often necessary to learn more about washing cars and to see if it's the right fit for you. Consider working for another car wash before opening your own. Professional organizations are also available to help small business owners learn more and get started. The International Carwash Association (ICA) and the Small Business Administration (SBA) are two additional groups with fantastic resources. Many states also have a dedicated business division within their secretary of state's office to support and encourage small businesses.
Skynova's business guides are another great resource to help you learn more about the financial side of a new business. Tap into our guides to learn more about accounting and see how our business software and free templates can help you manage your cash wash's finances and more.
Create a Business Plan for Your Car Wash
Forming a business plan is an important step to take before opening a car wash. A business plan is a detailed document that includes your vision for the business, what you need to get started, and how you plan to run and grow your business. The following steps can help guide you when creating your business plan.
Choose a Car Wash Business Model
There are a variety of business models within the car wash industry; you'll need to research the different types of car washes to decide which is right for you. The type of business you choose to open depends on many factors, such as your location, funding, and target market (the people you plan to serve). Car wash business options include the following models:
- Express car wash
- Flex car wash
- Full-service car wash
- By-hand car wash
- In-bay automatic car wash
- Self-serve car wash
Some car wash owners choose to offer multiple service options to appeal to a larger group of customers, while others focus on specializing in one type of service. Seek to understand your local demographics to determine what your potential customers want or need in your area. For example, do you think a full-service car wash or a quick automated car wash system would do better in your market? Decide which services you're going to offer and include them in your business plan.
Select the Site for Your Car Wash
Starting a car wash often requires a big investment. Just how big greatly depends on your business model and location plans. For instance, purchasing a piece of real estate and building a new car wash will cost much more than opening a single-bay, self-service car wash at an existing gas station. Ask yourself the following questions when choosing the best site for your car wash business:
- Can you see the site from the road?
- Is the location easy for customers to access?
- Is it a high-traffic area with a slow speed limit?
- How close are competing car washes?
- Are there other businesses to draw customers to the area?
- How dense is the local population? Is it growing or in decline?
You'll also need to consider the price of the property and whether you plan to buy or lease it for use. Contact local zoning officials or a real estate professional to make sure it's permitted to build a car wash in the location you're considering. It's also possible to purchase or take over the lease on an existing car wash. Be sure it's in a thriving location to give yourself the best chance at running a profitable business.
Calculate Your Costs to Secure Funding
Once you understand your business needs and location costs, you can begin to estimate your total startup costs and determine how to price your services. This process may seem overwhelming at first, but you'll find it's easier if you break down your potential costs and income step-by-step.
Begin by making a list of estimated costs based on the site, supplies, and equipment you'll need to start your car wash. Remember to factor in employee wages, plus any marketing, insurance, and business license fees.
Next, investigate competitors to get an idea of the going rates for car wash services in your area. In addition to basic pricing and sales based on marketing plans, some car washes offer loyalty programs to encourage repeat customers. Your pricing should be high enough to cover expenses and make a profit but low enough to be fair and competitive.
Include your startup costs and profit projections in your business plan to attract new investors and qualify for other funding opportunities, such as a small business loan.
Register Your Car Wash Business
When you're ready to move forward with your business plan, you'll need to register your company with the proper governing authorities. How you do so depends on the business structure you want to start, such as a partnership or a limited liability company (LLC), and where you plan to operate. Each state has its own laws that govern business and company name registrations, so contact your local business authorities to find out how to meet your local registration, tax, insurance, and licensing requirements.
Businesses with employees also need to register with the federal government for tax purposes. You can easily apply to the Internal Revenue Service (IRS) for an employer identification number (EIN) online. Some states also require you to obtain a state tax ID number. Consult with a tax professional to learn more about your business tax obligations at the state and federal levels.
Open a Business Bank Account for Your Car Wash Company
A business bank account is necessary to have when you're ready to receive or spend money on behalf of your company. It offers you a level of protection by keeping your business and personal finances separate from one another. A business bank account also gives you the purchasing power necessary to cover some startup costs. Certain types of bank accounts also enable you to receive credit card payments from customers in a secure way.
To open a business bank account, you'll often need to bring your official business formation documents, any operating agreements, and your business license. You'll need your Social Security number if you're the sole proprietor or an EIN if you have employees.
Talk to your local banks to see which type of business bank account will be right for your situation. It's OK to shop around to see which banks offer the best rates and lowest fees.
Form a Marketing Plan for Your Car Wash
Successful marketing plans are a blend of traditional and digital strategies. It's important to introduce your company to the public and create hype about your new car wash weeks before the grand opening. You'll need eye-catching signage outside and near your location to draw customers in, but you'll also need to build a positive and engaging presence online. Different marketing methods are necessary to help customers find your business and desire your car wash services.
Social media is a low-cost way to launch your business online, but it's necessary to have a professional website, as well. Consider hiring an expert designer to help you create a website. They can also help design a business logo to use on everything from billboards to T-shirts. You'll also want to set up free online business accounts on websites where people will go to find and review car washes. For example, Google My Business enables business owners to manage their online presence across Google platforms, including their search engine and maps.
Manage Your Car Wash Business Finances and More With Skynova Accounting Software
Starting a car wash business requires hard work, determination, and a substantial investment, but it can all be worth it once your car wash becomes a profitable venture. Learn all you can about the car washing industry and owning a small business before creating your business and marketing plans. Seek expert advice and help when you need it, like relying on Skynova's small business products for your daily accounting needs.
Whether you plan to start a touchless automatic car wash or a full-service car wash with detailing services, it's important to keep your company's finances in order. Our business software and free templates aren't complicated or fancy and you don't need an accounting degree to use them. Skynova's accounting software helps small businesses stay organized in a secure online space. Sign up for a free account today to explore how Skynova can help make your financial tasks easier than ever before.