If you’re an aspiring entrepreneur trying to figure out what kind of business you want to establish, you may want to consider opening a car wash. According to the U.S. Census Bureau, consumers spend an estimated $5.8 billion at car wash businesses annually, with approximately eight million vehicles being washed on a daily basis. Just as encouragingly, about 90 percent of car washes are owned and operated by small business owners instead of corporate conglomerates, and about 37 percent of these owners started their operations less than five years ago.
In 2012, 2.1 percent more vehicles were cleaned at car washing facilities compared to the number reported in 2011. Between 1998 and 2013, the number of automobile owners who used car washes to clean their vehicles instead of washing their cars themselves increased by 69 percent. With industry revenues of nearly $6 billion and consumer interest in car washes continuing to grow, it’s easy to understand why someone looking to strike out on his or her own would be interested in opening a professional car wash.
Types of Car Washes
If you’re serious about opening a car wash, the first step toward realizing your dream is to figure out which type of business your market will support and which type you’ll be comfortable owning and operating. Not including mobile car wash businesses, in which a business owner goes to an automobile’s location to detail the car using a vehicle outfitted for this purpose, there are four types of professional car washes operating throughout the United States.
These include the following types of operations:
Full-Service Car Washes: Approximately 9,000 of the country’s car washes are considered full-service car washes. Visiting a full-service car wash involves having the exterior of your vehicle cleaned in addition to having the interior of your automobile vacuumed thoroughly by employees of the facility you’re paying to clean your vehicle.
Exterior Conveyor Car Washes: Of the estimated 113,000 car washes operating in America, about 10,500 of them are exterior conveyor car washes. When you go to one of these locations, you’ll stay in your automobile while your car is pulled along an automated conveyor as its exterior is cleaned.
Self-Serve Car Washes: Approximately 36,000 self-serve car washes exist in the United States. With this kind of setup, vehicle owners use a wand to wash the outside of their automobiles themselves. Many facilities have coin-operated machines that people can use to vacuum the inside of their cars, as well.
In-Bay Automatic Car Washes: This is the type of car wash that you’ll normally see at a convenience store or gas station, because it generally requires less space and labor than other car wash formats. When you use this type of car wash, you’ll pay for the type of wash you want, your vehicle will be pulled into the car wash from a starting point, and you’ll wait in your car as the exterior of your vehicle is cleaned. Around 58,000 businesses in the United States are in-bay automatic car washes.
The type of car wash you choose to open will impact the amount of money you’ll need to start your business, how much it will cost you to operate and how much you will charge per wash. If your operation is going to involve washing automobiles by hand, your start-up costs will be lower than they would be for an automated car wash, but your ongoing labor costs will usually be higher. If you’re going to open an automated car wash, you’ll be able to wash more cars per hour without having to have many people on your payroll, but you’ll normally have to replace your equipment every ten years, or more often if it’s not maintained properly.
In general, consumers are willing to spend more for a full-service car wash that is done by hand. People who seek out this service normally do not wash their vehicles as often as people who use automated car washes do, however. The average price for a full-service car wash is $15, although 20 percent of businesses offering this type of car wash receive $18 or more per vehicle washed.
According to the U.S. Census Bureau, the average monthly revenue generated per bay in a self-serve car wash is nearly $1,500. On average, an in-bay automatic car wash generates $139,000 of revenue per year and provides a net yearly profit of $86,531. The average cost of getting your vehicle washed in an in-bay car wash is $6.34, which yields an average profit of $4.35 per wash. The average price of a car washed in a tunnel or conveyor car wash is $15 per vehicle, which adds up to an average annual revenue stream of $686,250 for this type of facility.
Costs of Starting a Car Wash
Once you have an idea of the kind of car wash you want to open, you’re probably going to ask yourself, “How much does it cost to start a car wash?” While certain start-up costs may be the same or nearly the same from one location to another, many factors that will affect the amount you’ll have to pay to start your business are largely dependent on where you’re going to open your car wash.
If you’re not going to buy an existing car wash, you should start figuring out how much start-up capital you’re going to need by answering this question: “How much does it cost to build a car wash?”
Land acquisition, construction and equipment expenses vary by location and other factors, so it’s important for you to thoroughly research the going rates in your area to accurately estimate your capital needs. In general, if you don’t already own land for your car wash business, you can expect to pay around $80,000 to construct and equip each bay your business is going to have.
No matter where you intend to establish your business, however, some of the costs of building a car wash will probably include the following:
Land Acquisition: Ideally, the land you acquire will not have any pre-existing structures on it. If it does, you’ll need to factor the expenses involved with tearing them down and removing the debris into your acquisition costs. You should seek out viable lots that are near frequently traveled areas close to other businesses and active, densely populated neighborhoods.
Your location will need to be big enough to support the type of car wash you intend to open and have enough space for vehicles to line up even after your physical business is constructed on the lot. It should also be large enough for you to expand your operation as your business grows.
If you’re going to own and operate an in-bay automatic car wash, you’ll need approximately 7,000 square feet of land for one bay. If you’re going to combine an in-bay automatic car wash with self-service bays, you’ll need about 18,000 square feet for two automatic car washes and two self-serve bays, and 22,500 square feet if you going to have the same number of in-bay automated car washes and four self-serve bays. If you’re going to open a full-service car wash, you’ll need to have enough land to create a waiting area for your clients, which means you may also need enough space for a retail area so they can shop while your staff works on their automobiles.
Where you establish your business is one of the most important factors that will cause your car wash to either succeed or fail, so it’s critical for you to choose the right location. If possible, buy a lot on a roadway that has a speed limit of 40 miles per hour or less. This will give drivers the chance to see your business’ sign and make the planned or impulse decision to have their vehicles cleaned at your establishment. The cost of a lot varies greatly from location to location, but you can expect a lot that meets the criteria you’ll need for your business to be successful to be at least $3 per square foot.
Paperwork: Before you purchase a piece of property for your business, you need to make sure it’s zoned for what you’re going to use it for. If it’s not, you may have to initiate the re-zoning process or apply for a special use permit. You’ll also need to check the local utility usage codes and sanitary sewers to make sure they are adequate to support a car wash. You’ll need to pay for a business license, business insurance and property tax, as well. You may want to register the name of your business with the U.S. Patent and Trademark Office to ensure no one else can use it, too.
Additional soft fees you’ll incur may involve architecture, engineering, impact and traffic studies and construction permits.
Site Work: Some site work will need to be completed before construction on the building you’re going to use for your business can begin. Site work includes earthwork and laying asphalt for your parking lot and, depending on how you’re going to set up, your external work areas, as well as laying the foundation for your building.
Construction: Like the cost of land, the cost of construction varies widely from one location to another. Your construction costs will include the electrical and plumbing work your business is going to need, as well as the expenses involved with paying to have your location tap into public utilities, including sewer and water. For self-serve car washes, it costs around $17,000 to build a single bay. For automated businesses, building expenses run at a rate of approximately $42,000 per bay.
While a typical car wash measures about 1,000 square-feet and can be as big as 2,500 square-feet, it’s important that you think ahead when you’re planning your business so that your initial construction will be able to accommodate your car wash’s future growth. If you construct a building that’s bigger than you need when you start your car wash, you’ll have the opportunity to add new services and expand your operation as your business prospers in later months and years.
If your structure ends up being too small, it can have costly consequences. It can give a competitor the chance to offer the services you simply don’t have room to offer, for instance, and prolong the time it takes for you to recover the initial investment you made in your venture.
Equipment: The amount you’ll pay for the equipment your business needs depends on numerous factors, including the sort of car wash you open, the brand of equipment you choose to buy and your location. Equipment for a self-serve car wash generally runs between $8,000 – $10,000 per bay. Equipment for an automatic unit can cost between $31,000 – $49,000 per bay.
No matter what kind of car wash you establish, it’s likely you will need the following equipment, at a minimum:
- Washing system, such as a conveyor tunnel or self-service wands
- Chemicals, such as cleaning and spot-free solutions
- Water system
- Payment processing system
Signage: Your car wash’s sign is one of the most valuable marketing tools you have to promote your business. It needs to be readily visible from the road and able to be read quickly by passers-by. Don’t clutter your sign with too much artwork or verbiage, or use a color scheme that makes it difficult to read when illuminated.
The cost of signage varies based on a number of factors, including the size and the complexity of your logo. In an article entitled, “What Does It Cost to Build a Car Wash,” Buzz Glover, author of “Car Wash Business 101” claimed to have budgeted $15,000 – $25,000 for signage for a car wash he intended to open.
Costs of Owning a Car Wash
With the costs of construction, signage, and other things, it’s obvious that the cost of owning a car wash will begin to grow even before you open your doors to the public for the first time. Additional expenses you’ll need to cover before you’re ready to welcome clients at your facility include labor and marketing costs.
While you won’t need to hire employees until your car wash is relatively close to opening for business, you will need to hire people prior to opening your doors so they can be trained to operate your business’ equipment and handle customers appropriately. The number of people you’ll need to hire is directly related to the kind of car wash you decide to own and operate.
The average number of people employed at a full-service car wash is 14, for instance, while the average number of employees necessary to operate a conveyor cash wash is four. In-bay automated car washes can run unmanned around the clock, but you will still need to employ someone to maintain your equipment regularly to avoid unnecessary or premature repair and replacement expenses.
One car wash system manufacturer suggests that you should plan to spend between $1 – $15,000 per car for your initial marketing campaign and ten cents per car after your business is firmly established in the community. Regardless of how big or small your marketing budget is, you have many ways to tap into your target market before and after your operation is up and running.
The marketing options that are available to you include the following:
Hand Out Flyers: Before your business opens, hand out flyers to people who pass by your location on foot and those who stop by in their vehicles to ask questions. While it’s illegal to put flyers in mailboxes that don’t belong to you, you can distribute flyers by putting them in the newspaper holders underneath the mailboxes belonging to people located within five miles or so of your business.
You can ask other non-competing businesses to make your car wash’s flyers available to their customers by leaving them on an accessible countertop or bulletin board, as well.
Hang Posters: If it’s permissible, hang posters on telephone poles and other places that see a lot of foot or vehicle traffic. Depending on the relationships you have with other business owners, you may even be allowed to hang a poster in their storefront, especially if your reciprocate by giving their clients a discount on their first car wash at your facility or offering another attractive incentive.
Send Postcards: If it’s affordable, you can also market your business by sending postcards to your neighbors who live in the vicinity of your car wash. You can include a coupon on your postcard, or use it to invite people to attend a grand opening celebration. In general, it’s ill-advised to host a grand opening until you’ve been open long enough to work out any kinks that might be present in your operation. If you’re going to have a grand opening, consider scheduling it for a month after you’re been open to the public.
Visit Radio Station: You don’t necessarily have to pay for air time on the radio to promote your business. Instead, you can schedule a time to visit with a popular, local radio personality to discuss your new car wash with him or her in an interview setting. You can describe the benefits your business will bring to the area, such as new job opportunities, and mention any charity drives your business will support in the future.
You can also ask a radio station to broadcast one of its popular shows from your car wash’s location during your grand opening, or another high-profile event.
Use Social Media: Using social media is one of the most cost-effective ways for you to market your business. After an initial investment to have a website created for your business, you generally only have to invest time in social media such as Facebook, Instagram, Pinterest and Twitter to promote your business and offer specials that are available only to your social media followers.
Of course, you also have the option to purchase advertising that will specifically target people who live and access the Internet close to your business location, as well.
Set Up a Loyalty Program: Even before you open to the public, you should set up a loyalty program. This will encourage people to return to your car wash beginning with the first time they use your services.
Implement a Texting Program: As you collect contact information for your clients, you’ll be able to implement a texting program. Depending on the ages included in your target demographic, your clients may be more apt to use a mobile or digital coupon instead of one they have to clip or print. You can use text messaging to notify your customers about current or upcoming deals and events affordably.
For instance, you can offer them a discount that will automatically be applied to their account if they respond to your text message with a certain word or sequence of numbers. Be sure to limit the number of texts you send to about one per month or so to avoid irritating your clients with non-stop pings that could be embarrassing if they’re in a business meeting or occupied with a sensitive personal matter.
As it is in any industry, the highest potential cost of owning a car wash is failure. Fortunately, many resources are available that can help you succeed in the short- and long-terms regardless of the type of car wash you ultimately decide to own, including people who are already in the business.
Small business owners ordinarily like to help other entrepreneurs succeed, often because someone helped them when they were starting out. With this in mind, visit other car washes and talk to their owners. If you have questions, ask them. If you need advice, ask for it. Learn from their experiences and apply what you learn to your business.
Learn everything you can about the car wash industry by reading relevant print and online materials and continue educating yourself throughout your career as a business owner. Stay abreast of the latest industry innovations by joining organizations such as the International Car Wash Association and attending seminars and workshops, as well.
While the costs and labor involved with starting a car wash may seem overwhelming, the rewards of being an entrepreneur can be immeasurable. Respected industry authority Fred Grauer claimed to have been “seduced, mesmerized and captured” by the car wash business shortly after he started working at his uncle’s car washes back in the 1950s. What was supposed to be a temporary job turned into a lifelong passion and career for Grauer.
If you’re ready to be seduced, mesmerized and captured by the same industry, start making plans to open a car wash today!