Mistakes to Avoid When Starting a Car Wash Business

According to car wash industry statistics, small business owners operate 90% of car washes in the U.S. and can earn $55,000 to $100,000 annually for a self-service car wash. While the number of people who choose to use car washes over manually washing their vehicles has risen by 69% in the last 15 years, 23% of businesses in the private sector, like car washes, fail in the first year of operation.  If the car wash industry continues to grow and thrive, why are so many businesses failing? Many new car wash owners don’t realize there’s more involved in starting a car wash than meets the eye. As a prospective car wash owner, it is best to adhere to key operational principles when establishing your business. This comprehensive guide provides tips on opening a car wash and typical car wash mistakes to avoid.

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10 Mistakes Car Wash Owners Make When Starting Their Business

As a car wash owner, it's essential to recognize and avoid these common pitfalls when establishing your facility.

1. Not Making a Marketing Plan

Many first-time car wash owners make the mistake of assuming their establishment’s presence alone will be enough to bring in customers. While this strategy may work for well-known national brands and chains, it’s improbable the same would be true for a local car wash. That’s why it’s vital to prioritize marketing when opening your car wash to attract a solid customer base. For effective business marketing, consider implementing the following strategies tailored for car washes:

• Create advertisements: To market your business, you can attract customers by publishing ads with eye-catching graphics and enticing headlines.  
• Support a local school or team: When you sponsor a local school or sports team, they’ll often allow you to advertise by hanging banners or printing your logo on their jerseys to create brand awareness.
• Offer an additional product or service: Some car wash owners bring customers to their doors by offering complementary products or services, such as a gas pump or detailing services. About 65% of car washes also serve as fuel stations, enabling them to boost revenue.
• Establish a social media presence: Creating social media accounts for your business is an effective and inexpensive way to market your car wash. Be sure to post regularly about business updates and interact with your customers to make your online presence meaningful.
• Partner with another business: Teaming up with a fellow local entrepreneur will get your name out while providing another business owner with something in return. For example, a local café may hang posters in their building and hand out flyers to promote your business. In exchange, you can provide a discount to customers who bring in a receipt from the café on the day they make a purchase.
• Use testimonials: A powerful way to promote your car wash is by publishing print, audio or video testimonials of others speaking highly of your business.

2. Lack of Customer Service

Some car wash owners focus more on running their businesses than providing outstanding customer service. Poor customer service costs businesses more than $75 billion annually. Customers who feel unappreciated are more likely to switch to competitors. Indeed, 67% of customers transfer their business to another brand after experiencing poor customer service. It would be best to create loyalty among your customers by offering excellent service through:

• Timeliness: Always show up on time and finish on time when providing services to your customers.
• Accommodation: Make sure your customers feel valued by fulfilling their requests and prioritizing their needs.
• Attitude: Your employees should always exhibit a friendly, empathetic attitude that makes customers feel happy, comfortable and respected.
• Knowledge: Extensive knowledge of everything you offer can ensure you deliver expert advice, recommendations and guidance.
• Gratitude: Customers remember sincere gratitude when visiting a business. You can express your appreciation by verbally thanking your customers for choosing your services, sending handwritten thank-you notes or distributing extras like stickers, coupons and promotional materials.

3. Poor Pricing

Undercutting your service prices is a typical car wash startup mistake that can impact your revenue. Many new car wash owners think they can gain an advantage by offering lower prices to attract more customers. And while you may experience a surge in business, undercutting your prices too low will eat into your profit margins. Offering discounts or pricing your services 10 to 20% lower than average can be effective, but be cautious not to mark down too much. Consider these standard car wash services and average prices before setting your rates:

• Basic wash: $5 to $10
• Deluxe wash: $10 to $20
• Full-service wash: $15 to $30
• Mobile car wash: $20 to $50
• Detailing: $80 to $200

4. Initial Cost Misconceptions

Some entrepreneurs underestimate the cost of running a car wash and are therefore unprepared to pay the high initial costs of starting one. Hand car washes typically cost between $15,000 and $25,000 to open, while establishing an express wash can cost upward of $3 million. Several factors determine the cost of a car wash business, including:

• Location
• Land
• Construction
• Equipment
• Electricity
• Water
• Maintenance
• Chemicals
• Labor
• Rent/mortgage
• Permits
• Advertising and promotion

5. Expensive Equipment Acquisition

While you should expect to pay a hefty sum for your car wash equipment, that doesn’t mean you have to pay the highest prices on the market. Neglecting to look into more affordable options is a missed opportunity. That’s why comparison shopping is in your best interest as a fledgling car wash owner. It’s a good rule of thumb to browse around among different vendors to find one that offers the most reasonable prices for the highest-quality equipment. Research aftermarket suppliers for more affordable parts and equipment than original manufacturers. If you find the car wash equipment you need is too expensive, you can look into financing options to conserve capital for your business.

6. Poor Labor Management

A reliable crew is a valuable element of any successful car wash. Even if your facility has automated systems and components that minimize labor reliance, it’s still vital to have highly trained staff to keep things running smoothly and assist customers when necessary. Hiring talent is essential, but since labor costs are ongoing expenses, be careful not to overhire, as it can lead to serious financial issues.

7. Lack of Maintenance

Your responsibilities don’t stop after you open your car wash. You must also administer frequent equipment upkeep to ensure customers have a positive and seamless experience with your facilities. Many car washes lose business due to inadequate maintenance of their tools and equipment. Customers who encounter issues with poorly maintained equipment are less likely to return. Even something as seemingly minor as a faulty car vacuum can deter consumers. That’s why you must regularly inspect your equipment and keep up with your maintenance needs.

8. No Progress Monitoring

Operating a car wash requires more than attracting local drivers and counting your profits. Many car wash owners forget that the secret to optimizing their businesses is to track their progress and make changes accordingly. Using tools like spreadsheets to track your activity provides valuable insights into your business. For example, you may discover high- and low-traffic patterns for your business. With this information, you can brainstorm ways to target your high-traffic crowd and draw in more customers during low-traffic times. Constantly making adjustments to improve your business is a surefire way to succeed.

9. Permitting Misconceptions

Many first-time business owners are unaware of the paperwork they must file or the permits to obtain before starting a business. Getting these authorizations and licenses requires time and effort and varies between states and counties. Types of permits you may need to open your car wash include:

• Local business registration
• State business license
• Environmental licenses
• Federal tax identification number
• Income tax withholding
• Unemployment insurance tax
• Employer identification number
• Occupancy permit
• Payroll tax registration

Failing to secure the necessary permits can lead to costly delays in your business operations.

10. Lack of Owner Involvement

Another common misconception about running a car wash is that you can function as an absentee owner and still generate your desired income. If you plan to build your establishment and leave the business operations to a manager, you may want to rethink your strategy. Car wash ownership is more than a title — it’s a lifestyle. Because cash flow is unpredictable in the car wash industry, the owner must be around to make fast, informed decisions to respond to product demands and capitalize on unexpected volume spikes.

What to Know When Opening up a Car Wash

If you dream of starting a car wash, review the following tips and advice to build your knowledge and prepare to open your doors to the public.

Identify the Type of Car Wash 

Knowing how the different types of car washes operate will help you prepare for your business needs. The four types of car washes include the following.

• Full service: Staff manually wash the car’s interior and exterior.
• Self-serve: Vehicle owners use a cleaning tool to wash the outside of their cars themselves.
• Exterior conveyor: Customers stay in their vehicles while the car travels along the automated conveyor belt through the tunnel, which washes and dries the exterior.
• In-bay automatic: Car owners drive into the bay and wait for automatic equipment to clean the outside.

Make a Business Plan

The better prepared you are to run your business, the more successful it will be. When opening a car wash, establish long-term and short-term business plans to maximize your profits. A well-researched and comprehensive plan is more attractive to potential investors and banks. Consider implementing the following elements into your plan:

• Upfront and overhead costs
• Marketing strategies
• Building plans
• Revenue management

Create a Marketing Strategy

Make sure your community knows about your car wash before the grand opening. Building your customer base in advance is an excellent way to get ahead of the game by creating brand awareness, stimulating word-of-mouth advertising and tapping into your target market before even opening your doors. Some examples of cost-effective marketing strategies you can use include:

• On-site advertising
• Radio ads
• Posters
• Television commercials
• Billboards
• Promotional washes
• Social media campaigns
• Door hangers
• Postcards
• Loyalty programs

Value Your Employees

Always remember that your employees are perhaps your most valuable asset. That’s why it’s essential to prioritize building a skilled and knowledgeable team to serve your customers. When you provide your crew with the training and resources necessary to handle unexpected circumstances, they’ll naturally deliver better customer service. Put measures in place to create a healthy staff environment that makes employees feel valued. When you respect and support your crew, they will feel motivated to perform to the best of their abilities, contributing to the success of your business.

Prepare for the Future

Even if you don’t currently have the resources you need to establish your dream car wash, that doesn’t mean you can’t achieve it later. When you build your car wash with the future in mind, you allow for business improvements when they’re more feasible later, saving you time and money. For example, if you were hoping to install a top brush for your tunnel in the future, you can prepare by implementing the electric components for it now.

Consider Climate

You can set up your car wash for success by purchasing equipment suited to your regional climate. For example, if your business is in a city with a lot of snow, you might offer underbody washes to prevent corrosion caused by road salt. If your hometown tends to be hot and sunny, consider providing specialized waxes or clear coats that protect automotive paint jobs from UV damage. Upgrading your equipment to solve region-specific challenges is an excellent way to gain more customers.

Choosing JBS Industries

If you’re looking for top-of-the-line industrial cleaners for your new car wash, JBS Industries has the solutions to serve you. We’ve been one of the industry’s leading car wash supply manufacturers since our establishment in 1979, and we continue to deliver superior products. At JBS Industries, we operate on four guiding principles — quality, innovation, value and service. We deliver unsurpassed product quality by creating concentrated cleaning products with custom manufacturing capabilities, high dilutions and product consistency to generate the best results.

Discover Our Top-Quality Cleaning Solutions

You can secure high-quality car wash cleaners for your new establishment at JBS Industries. We serve all car wash industries, from automatic to self-serve to touchless, and have expanded to dog groomers and aviation maintenance. Our dedicated team provides customers with efficient, personalized recommendations and exceptional customer service. To learn more about choosing the right cleaning solutions for your car wash, check out JBS Industries' extensive range of products. Contact us to learn more about our products today!

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