How to Start a Car Wash

Part 1 - How to start a Car Wash business - Background

Some people are naturally attracted to this business. They like to see clean cars and they like working to make cars look clean. A Car Wash can be a rewarding and profitable business that with enough effort and knowledge, anyone can learn how to run one.

Our guide is in 3 parts:

• Part 1 - How to start a Car Wash business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

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 Car 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
• Car 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 Wash

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 Car Washing Equipment – $250,000
• Car Wash 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 Car Washing Equipment – $250,000
• Car Wash 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 in 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 50 cars your monthly expenses will be:

• Water – $20+
• Soap – $15
• Replace worn out sponges/equipment – $25 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 – Hand 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 100 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 Wash

• Open in multiple locations and create brand awareness.

Level Three – Car Detailing

• Contract 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 15 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.

Day-to-Day and Growth

What happens during a typical day at a car wash?

Get the supplies. Turn the water on. Get the equipment ready and make sure the helpers show up. If you need inspiration play this song, Car Wash.

Level One – Hand Car Washing

• You will want to make sure you will have some cars to wash. The way to get customers is to locate on a busy street or have an affiliation with other businesses. You may spend some daily time looking for other opportunities to find cars to wash.
• You will check to make sure there are enough supplies. You will make sure the water connection is working. If you have helpers. you will supervise their efforts.

Level Two – Self-Service Car Wash

• Each day you will need to make sure all the equipment is functioning properly and there are enough soap and wax supplies to feed the systems. You will remove the coins from the coin boxes to collect the money made from the day before. You will fill the bill changer with coins to make sure the customers can get the change they need to use the system. You will make sure the facilities are clean and attractive to potential customers.

Level Three – Car Detailing

• This can be either an independent business or operated in association with a professional car wash. Car detailing includes not only washing and waxing the car but also bringing the interior back to pristine condition. The main thing you will do each day is to make sure you have enough supplies and if you use helpers you will make sure they show up on time to take care of the clients.

Level Four – Automatic Washing

• These systems are the most common form of car washing. The simple ones will be offered as part of a gas station. Your daily duties will be to check that the equipment is working properly and replace any worn out parts, such as brushes, with new ones. You will check to make sure there are adequate supplies that are needed for the operations such as soap and liquid wax.
• If payment can be made by coins or bills at the entry point, you will remove money from the collection device for deposit to the bank.

Level Five – Touchless Washing

• Touchless washing combines an automated system to do the rough washing with many employees to do the final cleaning. Besides checking the equipment for proper operation and making sure you have enough supplies, the main part of your job is to make sure there is enough staff on hand to help process all the cars that come through. A successful system may wash 200 to 300 cars per day.

What are some skills and experiences that will help you build a successful car wash?

Being a gregarious person helps when looking for customers for hand-washing or detailing services. For self-serve, automated, and touchless car washes, it is important to pick a very good location with lots of automobiles that pass by. Make sure your washing services are excellent and the customers feel very happy with the results. Give them all a little extra bit of attention and they will tell their friends.

What is the growth potential for a car wash?

Since getting a car wash is a matter of convenience, there is the possibility of having multiple locations served by a hand-wash company or a detailing company. For self-service, automatic, and touchless car washes, it is possible to have one on any major thoroughfare and even add other locations after the first location is successful.

Having the locations a few miles apart will help to make sure you do not cannibalize your own market.

How and when to build a team

Level One – Hand Car Washing

You can start all by yourself and then add helpers if you get more cars to wash.

Level Two – Self-Service Car Wash

This type of car wash does not require a permanent staff. You will only need maintenance people to repair broken equipment when necessary. You may want to hire a part-time worker to sweep up and clean the place once or twice per week if you do not want to do this work yourself.

Level Three – Car Detailing

Just like hand washing you can start as a sole owner/operator. However; most of these businesses have at least three people to process the cars more rapidly. Two work the outside of the cars and one works on the inside. Depending on the volume of cars washed, you will add new three-person teams to handle the additional workflow.

Level Four and Five – Automatic and Touchless Car Wash

An automatic commercial car wash needs to have at least six people to operate properly if it is a busy car wash. Laborers get minimum wage plus tips. Workers are pretty easy to find. Students are a good source for workers, so recruiting for part-time workers from a nearby college campus is a good idea. Because a touchless car wash uses more workers, you will need to have at least 12 and maybe more. Adding more staff depends on the volume of daily car washes.

Part 2 - Is a Car Wash business the right fit for you?

Part 3 - Action plan to launch your Car Wash business in 90 days