10 Reasons Car Washes Fail and How to Avoid Them

The car wash industry is growing, with demands for car washes steadily increasing in recent years. But, even with this growth, some car wash businesses still fail. Across the board, nearly 20% of small businesses fail within their first year, and almost half close within the first five years. It’s a challenge to start a new business of any kind, and car wash startups are no exception.

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Luckily, learning the most common factors behind business failures can help you understand how to run a successful car wash. We’ve collected the top reasons why car washes fail, along with helpful advice, so you can avoid these common pitfalls.

1. Bad Location

We’ve all heard the cliché “location, location, location,” and there’s a reason for that. Location is often considered the most crucial factor that can make or break any small business — not just car washes. Too many people simply choose the cheapest land or commercial building they find, only to find out they’re not located conveniently for their customers and can’t draw enough business. If your business isn’t easy for your customers to find or get to, they’ll be less likely to use your services.

How to Avoid This

Before you decide on a business property, do your research! Find out where your target customer base lives and works. Look at where your competitors are located and where there might be a need for a new car wash.

Ideally, a car wash business should be located in a busy, high-traffic area, near major roadways, shopping centers and office buildings. It’ll be easy and convenient for customers to find you. Prime commercial real estate may be more expensive, but it’s an investment — one that can net much better returns than a cheap property in the middle of nowhere.

2. Poor Design

Directly related to the location issue is the design or layout of your business. An oddly shaped property or one that’s not designed well for the flow of customers can be off-putting and may detract business. Poorly planned designs and layouts result in a business location that’s difficult or confusing to navigate, making it seem like a maze to get through. An inconvenient layout can also disrupt traffic patterns in the area.

A poor car wash design creates frustrated customers that will not likely return. It’s also difficult to build a solid brand and expand your business when its layout frustrates clients.

How to Avoid This

Again, research and planning are key to avoid this business pitfall. Successful businesses study their location before opening to better understand traffic flow to and around the property. Have a professional design your business — someone with experience and knowledge of how customers should navigate your space. Successful design and business layouts lead to happier customers who will want to keep coming back.

3. Misunderstanding Your Audience

Some of the biggest business mistakes come from misunderstanding your customers or assuming you know what your customers want. Cutting corners to save money and thinking that your customers are fully satisfied without researching their needs or asking for feedback is a recipe for failure in any business.

You should also be aware of customer satisfaction levels and act quickly when you have unhappy customers. Missing the signs of a dissatisfied customer or ignoring them can quickly escalate. In today’s world of easy online reviews and social media, unhappy customers will express their dissatisfaction in a public way that will hurt your reputation if not managed properly.

How to Avoid This

Excellent customer service is the best preventative measure here. Always make sure you have helpful, communicative staff available to address any customer concerns. Have an online presence and easy methods for customers to reach out to you with questions, concerns or general feedback. Show customers that you appreciate them! Offer online surveys and connect with your customer base online. You can then apply your customer feedback to make improvements in your business.

4. Neglected Equipment

Specialized equipment is a big part of a car wash business. As with any type of equipment, it needs proper maintenance regularly and will gradually depreciate over time. Starting up a car wash business requires a large investment upfront for quality equipment and supplies, and it’s important to protect this investment. Car wash equipment that’s neglected or not properly maintained may end up looking dilapidated or not function its best. Damaged equipment is a turnoff to customers, and you’ll end up losing business.

How to Avoid This

You don’t want your business to fall into disrepair, so the best way to avoid neglected equipment is to simply give it the attention it needs. Conduct regular inspections and maintenance routines for all equipment on your premises. And as soon as you notice anything going wrong, get it fixed immediately so it doesn’t lead to larger problems.

Be sure to set aside a certain amount of your budget to cover regular maintenance checks, repairs and equipment replacements or upgrades and plan to pay for repairs regularly. With proper planning, you won’t be caught off guard with repair costs down the road.

5. Poor Processing

In any business, processing refers to the customer experience and the details of each customer transaction. Speed is a large part of processing, but there’s more to it than quick service. For a car wash business, customers will become frustrated and not want to return if they don’t enjoy the experience and it takes too long. A busy summer day can mean customers line up and wait for their turn at the car wash, but a business with poor processing results in much longer waits and frustrated customers.

How to Avoid This

Plan for better processing right from the start, and you’ll have a much smoother customer experience. Anticipate your busiest days, and find ways to enhance the experience for waiting drivers. You can move more cars through your system in a shorter amount of time with a better processing plan.

One way to improve car wash processing is to provide easy and convenient ways for customers to purchase their wash, with kiosks located further down the lineup area. You could even offer ways to purchase online or in advance. Design your system so one car can start the wash process while another is further in the system, such as at the dryer. These steps all make for speedier service and a better overall experience.

6. Lack of Motivation

As a business owner, if you lack the motivation for success, you’ll have a hard time keeping satisfied customers and turning over a good profit. You might also need to improve leadership skills or have a team of employees that may also lack motivation or not be a good fit for your business. Lack of direction, motivation and clear leadership from above trickles down to all the other employees in your company, and it will be apparent to your customers, too.

How to Avoid This

First of all, make sure that you’re going into business for the right reasons and you fully understand everything involved in running a business. Be prepared for the hard work of owning a small business and have a clear vision for success. You’ll also need to make sure you hire the right employees for the job and provide good leadership and direction. With a friendly, experienced, motivated staff, you’ll be more likely to have happier customers and better financial success.

7. Poor Marketing

Many businesses start out thinking their idea is so good, it doesn’t need marketing. As a potential car wash owner, you might think the customers will see it when they drive by and that’s all the marketing you need. But a robust marketing campaign is necessary for any type of business, especially in that first year.

You won’t draw in many customers if they don’t even know your company exists. Similarly, marketing campaigns that aren’t targeted to the right audience or don’t use the right channels to reach an audience will be unsuccessful, as well. A lack of marketing or improper marketing is one of the common reasons businesses fail.

How to Avoid This

Any successful business, car washes included, has specific goals and marketing strategies. Know your target markets before you open your business and start your marketing campaigns right away. Even with a small budget, you can create successful marketing materials. Online programs can help you design logos, flyers and other professional materials affordably. Don’t forget about free and low-cost marketing options like social media and email marketing. Offer incentives to customers who refer others and share your online posts — word of mouth is a powerful marketing tool.

8. Burnout

Running any type of business can be a lot of work, and some may underestimate how much time and commitment it takes, especially in the beginning. Failure to delegate tasks or ask for help during these early, busy times can make you feel overworked. The varied tasks of running a business can be overwhelming, and many new business owners feel they don’t have a good work-life balance.

All of this leads to a sense of burnout. You might feel tempted to give up, or you may keep plodding along with less enthusiasm and motivation for success.

How to Avoid This

As a potential business owner, you should know what you’re getting into and prepare for consistent, hard work. You should have a qualified staff you trust who you can delegate some of the workload to. If your car wash is part of a franchise, find out what support systems are in place to help you with certain tasks. Don’t be afraid to reach out for help when you need it, and try to have a healthy balance of work and home life.

9. Lack of Financial Planning

Failure to properly budget can spell trouble and cause a business to fail early on. You need to account for and record all expenses, business costs, sales and profits. Bookkeeping mismanagement leads to cash flow problems that can make it difficult for a business to keep going. Business owners simply cannot get by without some financial planning and money management. Car wash business profit margins can be slim to start with, so it’s essential to have a budget plan in place.

How to Avoid This

Before you open your business, you should go into it with a solid financial plan and a good understanding of how to budget and manage money. Create a working budget including total sales, expenses like rent or mortgage, utility costs, employee wages, marketing costs and any other business expenses.

If you need help, don’t be afraid to seek advice from a financial expert. Consider hiring a bookkeeper or using online software that makes bookkeeping and financial planning easier. Keeping records of your finances ensures proper money management and can help forecast business trends and better manage supplies and employees for busier or slower times.

10. Not Standing Out Against the Competition

One of the most common reasons new businesses fail right away is they simply don’t stand out from their competitors. Or perhaps there are too many competitors in the area. If there are already several successful car washes around, it can be hard to get a foothold. But, even with a smaller number of competitors, you must find a way to stand out. If you’re indistinguishable from the car wash down the street, you’ll quickly lose business to the competition.

How to Avoid This

If you want to avoid losing business to your competitors, you’ll have to get to know the competition well and find out what they offer. Carve a niche for yourself or find ways to make your business different and attract customers. Will you offer lower prices, better quality goods and services or special extras that make you more desirable than your competitors? Or, will you simply have a stronger brand image, making you more memorable and inviting customers back?

There are many ways to set yourself apart, and it’s important to identify how you’ll accomplish this early on. Even after your business is established, you should keep a pulse on the local competition and constantly look for ways to distinguish your car wash from the rest.

Set Your Car Wash Up for Success With JBS Industries

If you’re opening a new car wash business, you want it to succeed, and we can help. JBS Industries provides top-quality car wash chemicals and supplies along with unbeatable customer service. We can help get your business up and running with the supplies you need. Browse our selection online to see the amazing products we offer, and don’t hesitate to contact us with any questions. Our helpful staff can guide you to the right products for your business. Reach out today!


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