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10 Benefits of a Professional Car Wash

If you’re like many people, washing your car probably involves pulling the hose around to the driveway, grabbing a sponge and filling up a bucket with soap and water. Many more don’t even bother to wash their cars at all. But just like getting your oil changed and replacing various parts through the years, keeping your car clean is an essential part of maintenance. And there’s more to it than just making sure it looks good. As a matter of fact, there are plenty of reasons to consider having a professional car wash instead.

Prevent Dirt Damage

You may not realize, because it happens slowly, but dirt that isn’t cleaned off can actually do damage to your vehicle. As you drive, it gently scratches the surface, wearing away your paint. In time, the damaged areas will begin to chip, and if they’re not taken care of right away, they’ll rust.

Prevent Fading

Dirt on your car can also cause your paint to fade, especially if you live in warmer climates. The combination of the sun and dirt can wear off your protective coating. Eventually, the paint color underneath will fade to a lighter color.

Clean Hard-to-Reach Spaces

When you wash your car at home, you probably just go over the body, windows and maybe the tires. You may even vacuum out the inside, but it’s highly likely you aren’t covering every inch that needs to be cleaned. When a professional does it, he or she covers all the bases, and they may even help you detect a small issue that can become a big problem in the future, like a crack in the windshield or a tiny paint chip.

Increase Safety

This one is more about the tires and windows than it is the body of the car, but they need washing too. Dirt on these areas can actually lead to car accidents. First of all, dirty windows are harder to see out of when you drive, and they may stay dirty for so long that you don’t realize just how smudged they are. Next up, dirt can wear down your tires over time which can lead to a blowout while you’re on the road.

Improve Resale Value

Some people drive their cars until they won’t run anymore, while many others opt to trade them in every so many years. If you want to get the most money for your old car when you go to buy a new one, you better keep it clean. If the person or dealership buying the car can tell that it’s been kept in excellent condition, you’ll get more cash for it.

Did you know there’s a good chance you have more germs in your car than you do in your home? That’s because when you leave work, school or a store, you’re carrying other people’s germs that you picked up from the surfaces you touched and taking them right to your car door handle, steering wheel and gear shift. A good interior and exterior cleaning can help keep you a little healthier and germ-free.

Believe it or not, keeping your car clean can increase its fuel efficiency up to 10 percent. Research suggests that cars that are dirty can create some drag when you drive that causes you to burn more gas.

Better for the Environment

If you’re worried about the environment, you’ll be happy to know that a professional car wash is more Earth-friendly. Not only does a car wash use less water than you do at home, but it disposes of that used water properly. Car washes also use high-tech equipment — no backyard water hoses here — and engineers are working constantly to make those safer for the environment.

Everyone is so busy these days, so you probably do what you can to add extra time to your schedule. That’s another reason to consider a professional car wash. When you do it at home, it can take hours of your time to get everything just right, but when you have a team of people working on it, it only takes a few minutes. If it’s going to take longer, you can plug in your laptop in the lobby and get some work done or even walk to a nearby shopping center or restaurant and do some multitasking.

It Saves Money

Last but not least, you may assume you’re saving money when you wash your own car, but in the long run, it may actually cost you. When professionals wash your car, it stays cleaner longer. They have the right equipment so there’s no accidental damage, they use less water and they clean the vehicle thoroughly enough to ensure there is no residual dirt causing damage or costing you fuel.

Car Wash Business

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How to Open a Car Wash Business

Last Updated: November 27, 2022 References Approved

This article was co-authored by Angel Ricardo . Angel Ricardo is the owner of Ricardo's Mobile Auto Detail headquartered in Venice, California. With over 10 years of experience in mobile detailing, Angel continues to attend auto detailing trainings to improve his customer service and auto detailing skills. There are 17 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 53 testimonials and 94% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 960,826 times.

Opening a car wash business can be a fun, interesting, and profitable business for somebody with business smarts and perseverance. With the right location, good marketing, and top-notch service, you can draw in numerous customers who need their cars washed quickly, efficiently, and at a good price. However, opening a car wash business also requires a significant investment, good planning, and attention to detail in order to make your business profitable.

Planning Your Car Wash

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Opening Your Car Wash

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Running A Profitable Business

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Community Q&A

About This Article

To open a car wash business, start by applying for a loan from the Small Business Administration or a bank so you have the $100,000-$400,000 usually required to set up a new car wash. Next, apply for all the permits and licenses you need in your state to start a business. Then, choose a location for your car wash, bearing in mind that it should be easily visible from the road, and in an area with a high level of traffic. Additionally, you'll need to purchase car wash equipment and chemicals, including pressure washers, vacuums, waxes and soaps. For tips on how to write a business plan and how to run a profitable business, read on! Did this summary help you? Yes No

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Car wash business plan

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Car Wash Business Plan

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Soapy Rides Business Plan

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

East Meadow long island and its surrounding area is quite affluent, 40% of the residents earn over $70,000 a year. Consequently, they have nice cars and want them to look nice. There are five different car dealerships within a three-mile radius which will require car washing services for the various fleets. Lastly, there are many different local businesses that have company cars and that require clean appearances. All of these potential customers need a car wash that fits their needs and their budget. We will happily fill that need.

Soapy Rides will be providing customers with three services: exterior car washing, interior cleaning, and detailing. Soapy Rides has no true competitors that are trying to offer a high quality service for a reasonable rate

This area has a number of benefits in terms of the market that it will provide for the business. Over 40% of households in the immediate neighborhood earn over $70,000 annually. Many people in the neighborhood own and/or lease new cars and place great value on their cars and how they look. There are a large number of car dealerships in the area–five within three miles of the proposed location for Soapy Rides.

Competition

There is one other hand car wash shop in East Meadow. It is quite new and is trying to compete with automatic car washes by offering low prices. However, it is not targeting the customers who seek quality cleaning.

Soapy Rides will be providing customers with three services: exterior car washing, , interior cleaning, and detailing. Soapy Rides has no true competitors that are trying to offer a high quality service for a reasonable rate.

Expectations

The business will be initially financed by a personal investment by Mark Deshpande and will finance growth through cash flow. This will mean that the company will grow more slowly than it could, but it will ensure that Mark retains control over the direction of the company. In year three, it is hoped that the company will be able to open a second location. It is envisioned that an outside loan or equity funding will be sought at that time.

Financial Highlights by Year

Financing needed.

Mark Deshpande will invest $40,000 dollars to change the the location into a car wash.

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How to Start a Profitable Car Wash Business

September 13, 2022

Adam Hoeksema

According to Detail Pro POS there are over 60,000 car wash businesses in the US alone. Car wash businesses can range from a passive model with no employees to a full service premium car wash model. My goal in this article is to help you compare the different types of car wash businesses, the startup costs, revenue and profit potential of each model so that you can determine what type of car wash business you should start.

The answer will depend on your goals. Are you looking for the most profitable car wash model, the highest return on investment, the safest bet, the most passive model or something else entirely?

Each model will have its own pros and cons. Throughout this article I will be using our Car Wash Financial Projection Template as a tool to help analyze and compare the different car wash models.

Throughout the article I hope to answer the following questions:

What are the different car wash business models?

How much does it cost to start a car wash business.

How to buy a car wash business?

How much revenue can a car wash generate?

How will seasonality impact your car wash business.

What are the typical cost of goods sold for a car wash business?

What are the operating expenses for a cash wash?

How much profit can a car wash owner make?

What type of car wash model is most profitable?

With that, let’s dive in!

There are 3 primary car wash business models:

Now it is possible to mix and match these 3 business models as well as add additional services like interior cleaning, detailing, etc, but for the sake of simplicity we are going to focus on these 3 models.

What is a Self-serve Bay Car Wash?

A self-serve bay car wash is simply an open bay that allows you to pull in your vehicle, pay for the type of wash or amount of time you need in the bay, and then provides equipment like a sprayer, brush and vacuum to allow you to wash your car on your own. Typically, this is the cheapest car wash option for a customer. This model will also have the lowest startup costs and operating costs when compared to Automatic or Tunnel based car washes.

A self-serve car wash can be a truly passive business as you shouldn’t need any employees and the equipment is designed to operate on its own.

Although a Self-serve bay car wash is probably the lowest start cost and the most passive business model, it is likely the least popular car wash model with consumers. Your upside will be lower, but you will also have less downside risk with this model.

What is an In-Bay Automatic Car Wash?

An In-Bay Automatic (IBA) car wash allows you to pull in a vehicle, park, and the equipment will move around the vehicle to wash the car. The upside is that the customer can stay in the car and won’t have to wash the vehicle manually. The automatic car wash will also be faster for the customer. Often you can see an in-bay automatic car wash as part of a gas station or oil change operation, but it could also be operated as a stand alone car wash business.

This type of model can also be a passive business with little to no employees.

The startup cost will be greater per bay than a self-serve model, but the revenue opportunity will also likely be higher because you can charge a higher rate per wash for an automatic wash compared to a manual wash.

What is a Tunnel Car Wash?

A tunnel car wash allows a driver to pull onto a track that will then move the vehicle through a tunnel with equipment washing and drying the car along the way. A tunnel car wash will have the highest startup costs of the three car wash models, but it will also likely have the highest capacity and revenue potential.

Let’s look at the differences in startup costs between the different models.

The cost to start a car wash can range from $50,000 to $7 million. The massive range is related to the type of car wash model you start along with the variability in the cost of land for the car wash. Let’s look at each model individually.

Self-serve Car Wash Startup Costs

For a self-service car wash you can expect $15,000 to $25,000 in equipment per bay, $25,000 for the simplest of building structures, plus the cost of land according to ISS .

In-bay Automatic Car Wash Startup Costs

For an in-bay automatic car wash you are looking at a minimum of $250,000 per bay according to ISS . They estimate roughly $150,000 in equipment plus a $100,000 building as a minimum startup cost.

Tunnel Car Wash Startup Costs

The startup costs for a tunnel car wash can range from $2.5 million to $7 million according to Car Wash Advisory . Those startup costs can be broken down into the following categories that we have built into our car wash pro forma template:

These startup expenses can be entered into the fixed asset section of our pro forma as seen below:

Now that we have a rough idea of the startup costs associated with the varying car wash models, you might be thinking about buying a car wash instead of starting from scratch.

How to Buy a Car Wash

Now that we have taken a look at what it would take to start a new car wash business, you might want to consider buying a car wash instead. There are a few key questions related to buying a car wash that I want to hit on:

Let’s take a closer look.

Where to Buy a Car Wash Business?

Fortunately there are many car wash businesses available for sale and easily accessible. BizBuySell lists hundreds of car wash businesses available for sale . As you can see from the screenshot below they have different types of wash businesses available including self wash, automatic tunnel washes, semi truck wash businesses and everything in between.

How Much Will it Cost to Buy a Car Wash?

Car wash businesses can cost between $40,000 and $11 million to purchase.

I found this huge range of pricing simply by sorting the car wash businesses available for sale on BizBuySell by price. The lowest priced single car wash was a 3 bay self service car wash priced at $40,000 up to a single unit tunnel car wash built 3 years ago that was listed at $11 million.

Since the range in pricing can vary so dramatically, what we really want to know is how are car wash prices typically determined?

How are Car Washes Valued?

Car washes are typically valued at 4.6 to 6x EBITDA according to Carwash.com

How to Fund a Car Wash Acquisition?

Once you find a car wash that you are interested in, you will need to find a way to finance the acquisition. My favorite financing option is an SBA loan. The SBA 7a loan program will allow you to borrow up to $5 million to acquire a carwash business. You should expect to invest 10% of the purchase price into the deal from your own savings or from outside investors that you are bringing into the deal.

We have been highlighting our car wash specific financial model so far, but if you are acquiring an existing car wash, our acquisition financial projection spreadsheet will serve you well. You can enter historical revenue and expenses and use that as a base to forecast your financials from. This model will give you everything you need in order to apply for an SBA loan.

Once you land on starting new or buying an existing car wash, the next thing you will want to know is how much can my car wash generate in sales.

Revenue between the 3 different models of car washes can vary dramatically. We like to find industry experts that provide revenue forecasts, but we also like to build out revenue assumptions from the ground up as well in order to provide a reality check. First, let’s look at some industry expert revenue forecasts for each of the three car wash models:

How much revenue can a self serve car wash generate?

According to Dultmeier it takes a population of 1,000 to 1,500 to support a single bay self serve car wash. They estimate that a self-serve car wash can generate roughly $1,000 to $1,500 per month in revenue per bay. According to Grandview Research , the US car wash industry generates $14.21 billion in revenue annually. With a US population of 332 million, this means the average American spends roughly $43 per year on car washes. Based on that per capita spending, the Dultmeier estimate of roughly a dollar per month per capita for a self service car wash seems to be reasonable.

How much revenue can an in-bay automatic car wash generate?

According to JBS Industries the average in-bay automatic car wash generates roughly $139,000 per year.

An in-bay automatic car wash can generate more revenue than a self service car wash because it can charge a higher rate per wash and will take less time per wash which means the revenue capacity is much higher.

How much revenue can a tunnel car wash generate?

JBS Industries estimates that a tunnel car wash generates $685,000 annually.

The average price per car wash for a tunnel car wash is roughly $15 which allows a tunnel car wash to generate a much higher annual revenue.

Many modern tunnel car washes offer an unlimited wash membership plan. Our car wash financial model allows you to enter in a conversion rate of active customers that you can convert into unlimited wash members as well as distribute between different membership levels if you have more than one membership level offering.

Depending on the location of your car wash seasonality can be a big factor on both revenue and cash flow for your car wash. The average American washes their car 13 times per year; however, this can fluctuate throughout the year. People tend to wash their cars more often during the winter months. In fact, you can see a clear trend using Google Search Trends and looking for “Car wash near me” search volume in a city like Chicago. There are spikes in search volume during the winter months and specifically around snow and ice events when cars are caked with salt and chemicals from the road treatment.

Based on this search data you can see that search volumes are nearly double or triple the average volume during the busiest months during the winter. Our car wash financial model allows you to enter in seasonality adjustments so that you can see the impact on your cash flow projections. As you can see below, you can enter in the average number of car washes per month per active customer during each month of the year.

In this monthly sales forecast chart you can easily visualize the impact of seasonality on your sales depending on your location.

Next, let’s dive into gross profit for a car wash business.

What is the typical gross profit for a car wash business?

According to Bizfluent the average gross profit for a self service car wash is roughly 70%.

The gross profit can vary depending on the model of car wash you are operating. For both a self serve and in-bay automatic car wash you can expect similar gross profit margins because your only cost of goods sold is the water, utilities, and soap associated with each wash, there is no labor cost component.

Typical Gross Profit for a Tunnel Car Wash

With a tunnel car wash you will need to consider the cost of labor per car wash in order to estimate your actual gross profit.

One way to approach this is to estimate the number of washes per hour you expect in a day and then the average labor cost you expect to pay your labor per day. Then divide your total labor cost by the number of washes you expect to have to come up with a cost of labor per wash.

Beyond your cost of goods sold you will also have some operating costs associated with your car wash. This will vary depending on your model, but each model will likely have the following operating costs:

If you operate a tunnel car wash, you will have additional labor costs with salaried positions like a general manager.

It is clear that a tunnel car wash model is going to be the most profitable car wash business model from an absolute dollar amount level, but our car wash financial model will help you actually calculate your profit margin as a percentage of sales and your return on investment once you enter in all of your specific assumptions.

Below you can see an example output of key ratios that will be calculated for you once you input your specific car wash assumptions into the financial model .

According to a report by Auto Laundry News a full service tunnel car wash can generate between $500,000 and $900,000 in annual profits on the high end. On the low end we estimate that a single self service car wash bay can generate $18,000 in annual revenue with a 70% profit margin which means that a small self service car wash should be able to generate $12,600 in annual profit.

As you look to secure a loan or investment for your startup car wash you are probably going to need to produce a set of financial projections. We hope you will give our template a try and contact us if you have any questions along the way. Best of luck!

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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5 Secrets of Successful Car Wash Businesses

As long as vehicles travel the roadways, there will always be a need for car washes. For the budding entrepreneur looking to invest in a lucrative opportunity, a car wash business can be just the ticket.

The Houston Chronicle , reporting on a survey conducted by Auto Laundry News , a leading car wash industry publication, said that profits can range from $55,000 to $100,000 per year for a self-service car wash to $500,000 to $900,000 for a full-service business.

If you’re looking to invest in the car wash business, here are five secrets successful operators will tell you helped them get started on the right track.

1. Know What You Don’t Know

There is a lot you may not know about what it takes to run a successful car wash business, including everything from site selection to water conservation to the chemicals and equipment used in marketing, advertising, hiring, pricing and even the software needed to run your business.

There is a lot to learn… and the best place to start is to “know what you don’t know” then task yourself with gaining as much knowledge and expertise as possible about every facet of the car wash operation.

2. Ask for Help

If you are new to the business, seek advice from those in the know — and listen to what they have to say. You’ll save yourself a lot of headaches by learning from the experience of others.

According Steve Gaudreau , a 25-year car wash veteran and the author of “ So You Want to Own a Carwash ,” when asking for help do what you would do in any business: Check references, visit successful car wash sites to see what success looks like and ask operators their opinion of who you are thinking of working with. The more you learn, the better your chance of success.

A good place to gain insider information is LinkedIn car wash industry groups, such as the Midwest Car Wash Network and others. Industry publications like Auto Laundry News and Professional Carwashing & Detailing also contain a wealth of knowledge.

3. Select the Best Site Possible

“Location, location, location” is the real estate industry’s mantra. It should be in our industry as well. For a car wash business, location is everything, so select the best site you possibly can.

A good site will have the following characteristics:

What locations work best for car washes?

Andy Pazz, the author of “ How to Set Up an Express Exterior Car Wash ,” provides some sound advice about selecting a prime location:

“Primarily, a location that would be in an area like near a Wal-Mart, near a commercial area like a strip mall, close to a light or a stop sign on a main thoroughfare. … You have to be near a destination … where people are actually shopping … Anywhere around a commercial area like that, you’re going to generate a lot better than you are out in an area that’s predominantly residential.”

4. Know Your Competition

Gaudreau says in his book to use a map to identify all of the competition within a 5-mile radius and determine what their trade area is, what your natural trade area is and where there is overlap.

5. Choose the Right Manufacturers and Suppliers

Selecting a manufacturer who provides high quality tunnel systems, components and parts and who backs up sales with prompt, expert support and service is one of the most important decisions you can make.

Also, don’t overlook the importance of the chemicals you use as they are vital to your success.

According to Gaudreau, the key issues regarding chemical usage are:

You may be tempted to go with the least expensive products but don’t give in. The chemicals you use are like a business card for your car wash. You don’t want a dull finish, water spots and other blemishes to keep customers from coming back.

While these five secrets are vital to the success of your car wash business, they are only the tip of the iceberg. You must also consider factors such as financing, construction, zoning rules and permits, marketing and advertising, employee hiring and much more.

That’s why it’s important to connect with and learn from established operators. You’ll find that most will be happy to share their knowledge.

Motor City Wash Works is in the business of helping new investors get started. Give us a call at 866-362-6377 or send us an email to discuss your interests and needs.

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