Start a car wash by following these nine steps: You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your car wash. These steps will ensure that your new business is well planned out, registered properly and legally compliant. STEP one : project your Business A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are : What are the startup and ongoing costs? Who is your target market? How long it will take you to break even? What will you name your business? Luckily we have done a lot of this research for you. What are the costs involved in opening a car wash? The costs involved in starting this business depend on the level you want to operate. Level One – Hand cab Washing Anyone who can afford a few hundred dollars can start at this level. You will need: A water supply (monthly cost is $20+) Buckets - $10 each Soap - $20 Sponges - $10 Window Squeegees - $10 each Chamois - $10 each Industrial Wet/Dry Vacuum - $100 Promotional Flyers - $50 Signage - $75 Shade Cover - $150 Level Two – Self-Service Car Wash This type of operation requires a significant investment of up to $200,000 or more depending on the location. You will need: Self-Service Car Wash Equipment - $50,000 auto Wash Shed Building - $100,000 Lease Payment and Deposits - Allow $5 per square foot. For example, a 1,000 square feet facility would typically require $5,000 per month rent and a $10,000 security deposit. Signage - $2,500 Level Three – Car Detailing Some automatic car washes and touchless car washes offer car detailing as an enhanced service. However, it is also possible to operate a car detailing business independently and do all the work by hand. The startup investment for an independent car detailing business is similar to a hand-washing business, except because you will offer more services you will need additional supplies and perhaps helpers. You will need: A water supply (monthly cost is $20+) Buckets - $10 each Soap - $20 Car Wax - $25 Water Repellant - $35 Armor All - $50 (used for treatment of tires and other surfaces) Window Cleaner - $25 Leather Restorer - $30 Air Freshener - $20 Chrome Polish -$25 WD-40- $50 Sponges - $10 Window Squeegees - $10 each Chamois - $10 each Industrial Wet/Dry Vacuum - $100 Pressure-Wash Cleaning Equipment - $500 (used to clean the engines and undercarriages) Promotional Flyers - $50 Signage - $75 Shade Cover - $150 Level Four – Automatic Car sHower This type of operation requires a significant investment of up to $500,000. It is a much bigger facility than a self-service car wash. You will need: Automatic taxi-cab Washing Equipment - $250,000 Car sHower Building Construction - $200,000 Lease Payment and Deposits - Allow $5 per square foot. For example, a 5,000 square feet facility would typically require $25,000 per month rent and a $50,000 security deposit. Signage - $5,000 Level Five – Touchless Washing This is the highest level of car washing that uses automated equipment with lots of hands-on workers. Luxury vehicle owners are especially attracted to this type of car wash because nothing except human hands and soft clothes touches the car. These facilities can easily cost up to $1 million or more to start and many find it easier to buy an existing one rather than create a new one . You will need: Touchless hackney Washing Equipment - $250,000 Car immerse Building Construction - $500,000 Lease Payment and Deposits - Allow $5 per square foot. For example, a 15,000 square feet facility would typically require $45,000 per month rent and a $90,000 security deposit. Signage - $25,000 If you are going to open a commercial car wash you will need to make a significant investment in the equipment needed to operate the car wash. The best places to have a commercial car wash are on very heavily used streets with lots of auto traffic passing by. This means the rent will be a very substantial expense. Car washes need to have plenty of space for the cars to pass through the washing system and for them to be parked while they are being dried by hand to make each car ready. Typical car wash lots are at least 5,000 to 10,000 square feet and rent for a minimum of $10,000 to $50,000 per month . To be really successful operating a commercial car wash, you will need to do at least 100 cars per day at an average profit of $10 each per car. What are the ongoing expenses for a car wash? Water is really expensive, especially in places like California where the water is in short supply. Reclaiming water is important. This requires capturing the water and pumping it through a filtration system to clean it before it is used again. Automatic car washes use a lot of electricity as well. Labor is paid at the minimum wage because the workers also get tips. Level One – Hand Car Washing The expenses depend on the number of cars you wash per month . To wash about fifty cars your monthly expenses will be: Water - $20+ Soap - $15 Replace worn out sponges/equipment - $ twenty-five to $50 Flyers - $50 Level Two – Self-Service Car Wash Your expenses will be water, supplies, electricity, rent, and the cost of maintenance of the equipment. This averages in total to be about $5,000 to $7,000 per month. Level Three – Car Detailing If you work independently your expenses will be similar to hand washing of about $135 per month, except you need to allow for additional supplies of $150 per month. You may have to pay a commission and/or a fee to have an association with another business. Level Four and Five – Automatic and Touchless Car Wash Your monthly expenses for this type of operation will include the following: Rent - $10,000 to $25,000 per month Labor- $5,000 to $12,000 per month Water - $2,000 to $3,000 per month (depending on the part of USA) Supplies - $2,500 per month Electricity - $ 3,000 to $5,000 per month Who is the target market? The best customers are the ones that return weekly to get a car wash. Many car wash companies give a free wash after a certain number of washes to get customers to come back again and again. How does a car wash make money? Each car wash has a basic charge and there are typically additional things that can be requested by clients, such as using auto freshener or wax that are sold for an additional charge. Detailing is the most expensive because of all the additional services provided. How much can you charge customers? The average price for a simple hand car wash is $5 to $7. For self-service systems, the charge is usually $1 to $2 for a 15-minute use of the washing equipment. Vacuum charges are about the same. The average customer might spend $2 to $ 4. For automatic car wash systems, the average charge is $10. Most customers like to add some extras and can pay as much as $15 for a wash with the extras of interior cleaning, freshener, tire treatment, and the application of car wax. Touchless wash is about $20 per car and with some extras added on the charge can go up to about $30 per car. Car detailing is the most expensive and the customers pay about $50 to $150 per car. How much profit can a car wash make? Level One – helper Car Washing About $7 per car Level Two – Self-Service Car Wash About $3 per car Level Three – Car Detailing About $50 to $75 per car Level Four – Automatic Car Wash About $10 to $15 per car Level Five – Touchless Car Wash About $12 to $18 per car An automatic car wash operating at one hundred cars per day at the average price of $10 per car will make $1,000 in gross profits per day. Labor will cost about $60 per hour so for an eight-hour shift that is $480 plus $120 more for employment taxes paid by the employer. Electricity will be about $200 per day and water about $75 per day and supplies about $25 per day. Insurance will cost $2,000 to $3,000 per month. Taking these expenses into consideration gross profits per day would be about $220 per day. The owner of a modestly successful commercial car was would make around $6,600 per month in profits after paying all the expenses. In really busy areas, it is possible to make up to ten times this amount. How can you make your business more profitable? Level One – Hand Car Washing Also advance from simple hand-washing to offer car detailing as well. Level Two – Self-Service Car WashOpen in multiple locations and create brand awareness. Level Three – Car DetailingContract for providing service to customers of high-end luxury hotels and luxury auto dealerships. Level Four and Five – Automatic and Touchless Car Wash There is an excellent opportunity to sell additional items to clients who are waiting for their car wash to be finished. One terrific and very successful idea is to have a drop-off dry cleaning and laundry service associated with a car wash. Offering fast food is another revenue source. The typical car wash customer, using an automatic or touchless car wash, is waiting for about fifteen minutes at a minimum for their car to be washed. This is an excellent time to sell them other things. Making deals with auto dealerships to wash cars at night is a great way to make extra money. Typically, the public is not looking for a car wash at night. However, car companies and auto rental places need to have cars washed at all times of the day and night. This is a great deal to seek for extra income if there are such dealerships and car rental places nearby. What will you name your business? Choosing the right name is very important. Read our detailed guide on How to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it. Find a Domain Now .com .us .biz .info .net .org .ws .mobi .me .CO.UK .IN .at .asia Powered by GoDaddy.com After registering a domain name, consider setting up a professional email account (@yourcompany.com). Googles G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free STEP two : Form a legal entity Establishing a legal business entity such as an LLC prevents you from being personally liable if your car wash is sued. There are many business structures to choose from including: Corporations, LLCs, and DBAs. Form Your LLC Read our Guide to trim Your Own LLC Select Your State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming SEARCH NOW Have a Professional Service Form your LLC for You Two such reliable services: ZenBusiness ($39 + State Fees) ZenBusiness LegalZoom ($79 + State Fees) Check out the Top Business Formation Services from our friends at StartupSavant. You should also consider using a registered agent service to help protect your privacy and stay compliant. STEP three : Register for taxesYou will need to register for a variety of state and federal taxes before you can open for business. In order to register for taxes you will need to apply for an EIN. Its really easy and free! You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and How they can benefit your LLC, read our article, What is an EIN ? . STEP four : Open a business bank account & credit cardUsing dedicated business banking and credit accounts is essential for personal asset protection. When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil. Open a business bank account This separates your personal assets from your companys assets, which is necessary for personal asset protection. It also makes accounting and tax filing easier. Recommended: Find the right bank for you, read our review of the Top five Banks for Your Small Business Get a business credit card This helps you separate personal and business expenses by putting your business expenses all in one place. It also builds your companys credit history, which can be useful to raise money and investment later on. STEP five : Set up business accounting Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing . STEP six : Obtain necessary permits and licenses Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down. senseless & Local Business Licensing Requirements In accordance with the Clean Water Act of 1972, car washes must obtain a wastewater permit from the NPDES . A list of state specific regulations can be found here. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. Most businesses are required to collect sales tax on the goods or services they provide. To learn more about How sales tax will affect your business, read our article, Sales Tax for Small Businesses. In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits: Check with your town, city or county clerk’s office Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources. Labor Safety Requirements It is important to comply with all Occupational Safety and Health Administration requirements. Relevant regulations include: Appropriate hazard identification Injury reports Proper safety precautions when operating potentially dangerous equipment Certificate of Occupancy A car wash is generally run out of a physical location . Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met. If you plan to lease a location: It is generally the landlord’s responsibility to obtain a CO. Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a car wash business. After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued. If you plan to purchase or build a location: You will be responsible for obtaining a valid CO from a local government authority. Review all building codes and zoning requirements for you business’ location to ensure your car wash business will be in compliance and able to obtain a CO. STEP seven : Get Business Insurance Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state. STEP eight : Define your brand Your brand is what your company stands for, as well as How your business is perceived by the public. A strong brand will help your business stand out from competitors. How to promote & market a car wash Level One – Hand Car Washing Your best promotion will be receiving positive word-of-mouth referrals from existing customers. Giving them a discount card to hand out to their friends and business associates is a really good idea. Distributing flyers in the local area and walking around to do a “meet and greet” with local residents and businesses is an excellent way to find new customers. Offering to collaborate with another business such as a restaurant or a parking lot is another way to create new business. Level Two – Self-Service cab Wash Staying open 24-hours with bright signage when located on a busy thoroughfare is the best way to attract business to this kind of operation. People are attracted to use these services by seeing them when they drive by. Level Three – Car Detailing For this type of business, you will be looking for customers that have luxury vehicles. One excellent way to promote your services is to create an affiliation with a five-star hotel and offer the car detailing to guests. You will make their cars look perfect overnight and ready the next day as sparkling clean. Level Four and Five – Automatic and Touchless Car Wash These businesses use different equipment; However, the promotional methods are the same. How to keep customers coming back Asking existing customers to spread the word about your services by giving them a discount coupon to give to their friends is an effective marketing method. Register the discount cards, which are numbered, to the person you give them to. If someone uses the numbered discount coupon, the registered person gets a free wash. Loyalty programs work very well. Issuing a reward card for the number of washes and giving a free wash after a certain number of paid washes is a terrific way to keep customers loyal. Giving rewards to customers that come back for repeat business is a really good idea. In dirty environments, such as big metropolitan cities or winter road conditions that throw destructive salt up to the undercarriage, a car wash is needed about once per week. This means that a single customer that returns once per week for a year will be a very valuable customer. STEP nine : Establish your Web Presence A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
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