How to write the business plan for a car wash
If you've long been interested in cars and keeping them in tip-top condition, you may have decided to open your very own car wash business.
Before diving headfirst into launching your car wash, however, you're gonna need a solid business plan.
To help you through this process, we've written the guide below to offer our top tips to help you write your car wash business plan.
Why write a business plan for a car wash?
The business plan for a car wash enables an entrepreneur to examine their business in detail, evaluate the amount of funding needed to get it up and running and assess its expected profitability.
It also serves as a roadmap for the business' first three years of operation. As your car wash business moves through its first throes of operation, you can use the business plan to track whether it's flourishing as it should, by comparing the figures estimated in your initial forecasts.
A car wash business plan will also be specifically requested by any bank or investor you decide to approach, so drafting one up is a mandatory step when it comes to securing financing.
So what does a car wash business plan look like? In a simplified way, it consists of two main parts:
- A financial forecast highlighting the expected financial performance over the next 3 years and the potential for profitability
- A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
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Information needed to create a business plan for a car wash
Carrying out market research for a car wash .
Conducting market research for a car wash will be the very first step of creating your business.
Market research has three objectives:
- To enable you to verify whether there's an unmet demand in the area you'd like to set up your car wash
- To help you come up with a strong business concept to meet this demand
- To assist you in the collection of data required to estimate your car wash's sales potential
With the population growing more environmentally conscious, car wash's are evolving - with an increasing number of waterless car washes in the UK.
There is still, however, a strong presence of car washes that use rollers and pressure jets. The challenge for you is to choose a concept that meets the desires of your target customers.
Thanks to market research, you'll be able to understand not only what your customers need, but also how often they go to a car wash and their favourite type of washing solution.
For this, you'll have to ask yourself a number of questions:
- How many times do your customers, on average, wash their car per year?
- Who prefers which type of wash: roller, hand wash or pressure washer?
- What is the average budget per customer?
By answering these questions as you go along, you'll be able to make a compelling case that there's space on the market for your car wash. You should also consider analysing trends within the car wash industry to get a grasp on the different types of services you can offer customers.
Next, you need to check out the competition around you (who they are, what services they offer and how much they're making), and get in touch with car wash owners in the area to get a ballpark figure of the number of customers they welcome each year.
When it comes to the car wash business, leave no stone unturned. If you want to convince the investor reading your business plan that your car wash is worth pumping money into, your market research needs to be precise and detailed.
Developing the marketing plan for a car wash
Once the market research has been carried out, it's time to focus on your marketing strategy.
First, take a look at the communication methods used by your competition to attract and retain customers, whether that includes disrupting the local radio's airwaves with a jingle about their services or posting about car wash discounts on their Instagram feed.
Doing so will give you a better idea of what strategy you can adopt to promote your car wash. Even if your location is your biggest asset, you'll still need to establish a few marketing actions to turn these circumstantial customers into regulars.
Advertising online or in your local newspaper, creating loyalty cards or coming up with promotional offers are all excellent ways to do so. The most important thing, as far as the car wash business plan is concerned, is that you have a clear idea of how much money you can afford to spend on each action, as well as what you can expect back in terms of sales.
The staffing and equipment needs of a car wash
Last but not least, before writing the business business plan for your car wash you'll need to take note of the staffing requirements, as well as the equipment needed to get it up and running.
Both of these factors will depend on the concept you choose. If you decide to launch an automatic car wash with rollers, for example, you'll be able to operate without paying for on-site employees, but will have significant investments when it comes to equipment and renovation work.
Adversely, opening a car wash that offers only hand washing will require very little investment but have pretty hefty staffing requirements.
What is the financial forecast for a car wash?
Establishing the financial forecast is an integral step in the development of your car wash's business plan.
It is composed of 4 main tables, highlighting different financial aspects of the company:
- Projected P&L statement
- Projected balance sheet
- Projected cash flow statement
- Initial financing plan
The projected P&L statement
The profit and loss statement, which starts with the turnover, allows you to evaluate the growth, evolution of your car wash's cost structure, and its expected profitability over the coming years.
The projected balance sheet of your car wash
This table shows the value of the company's assets at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc).
The projected cash flow statement
With the help of a projected cash flow statement, you will see how much cash is generated by your car wash, where it comes from, and how it is used, whether it's to repay its loans or regularly renew equipment.
You'll also be able to see if you have enough cash to fulfil these obligations, or even if you might soon have enough cash to expand your business by opening more car washes.
The initial financing plan
This section of your car wash's financial forecast gives your bank or investor a quick overview of the resources needed to launch your business and their costs - as well as the personal contribution you plan to make.
The editorial part of a car wash business plan
Once the financial forecast of your car wash has been set up, you have the opportunity to put these figures and estimations into context by delving into the written part of your car wash business plan.
The editorial section of your business plan is just as important as the financial forecast because it presents each aspect of the business in detail and proves to investors that you've thought carefully about the risks associated with it.
It's broken down into 6 sections, which we have summarised below:
The executive summary
Think of this section as the equivalent of a cover letter for your car wash business plan. The aim here is to introduce your project to investors in as engaging and concise a manner as possible, encouraging them to read on and learn more about your exciting venture.
This part contains all the administrative information about your company, including the business partner's and their roles, the legal status of the company and its location.
Products and services
Whether you've decided to set up an automatic car wash bay or decided to go for hand washing, you'll use this section to explain the services offered by your car wash.
It's within this section of your car wash business plan that you'll present the results of the market research we mentioned at the beginning of this article. The objective here is to demonstrate, through knowledge of the national and local market, that there is indeed a viable business opportunity for a new car wash in the area you've chosen.
In this part, you'll reveal three key plans:
- Your sales strategy - the prices you'll set
- Your marketing strategy - the actions you'll take to attract customers and build customer loyalty
- Your risk management strategy - how you'll minimise the risks related to your business
In this section, you will give the reader an idea of the day-to-day operation of your car wash, including your opening hours, members of staff (if any) and the suppliers used, as well as how often you'll renew the stock.
The financial plan
Like we said, numbers need context. In this section, you'll illustrate the various financial tables and the assumptions you've made for them.
What tool should I use to write my car wash business plan?
Writing a business plan for a car wash can get pretty complicated, especially if you've never done it before. There are, however, several options at your disposal to help you draft one up:
Create your car wash business plan using Word or Excel
Using Excel and Word to create your car wash business plan is the cheapest solution, but not the most efficient.
While these software programs can be useful, they require that the user has good computer skills and a solid background in accounting to avoid mistakes.
Hire a consultant to write your car wash's business plan
Hiring a chartered accountant or consultant to take care of the financial part of your business is a good way to avoid errors.
However, the fees are generally quite expensive: budget around £1.5k ($2.0k) for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).
If you decide to hire a consultant or accountant, remember to check what's included in the service - are they developing a complete business plan or just doing the financial forecast? And are you will to pay extra for them to make changes, if necessary?
Use an online business plan software for your car wash's business plan
Another alternative is to use online business plan software . There are several advantages to using specialised software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you
- You get a professional document, formatted and ready to be sent to your bank.
If you're interested in using this type of solution, you can try our software for free by signing up here .
We hope that this article has helped you to better understand how to write the business plan for a car wash. If you still have questions, do not hesitate to contact us for any questions related to the creation of a car wash.
Also on The Business Plan Shop
- Business plan template of a car wash
- How to optimise profitability for a car wash
- How to open a car wash
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Car Wash Business Plan
Start your own car wash business plan
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.
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.
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
Mark Deshpande will invest $40,000 dollars to change the the location into a car wash.
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Car Wash Business Plan Template
Car wash business plan.
You’ve come to the right place to create your Car Wash business plan.
We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their car washes.
Below is a template to help you create each section of your Car Wash business plan.
Eco-Clean Car Wash is a startup car wash company located in Boston, Massachusetts. The company is founded by Thomas Wright, a former car wash manager who has gained valuable insights in how to run a car wash during his time working at Clean & Dry Car Wash. Now that Thomas has garnered a positive reputation for his exceptional management skills, he is ready to start his new company, Eco-Clean Car Wash. Thomas is confident that his ability to effectively manage staff and operations combined with his winning customer service record will help him successfully open and run a profitable car wash.
Eco-Clean Car Wash will provide a comprehensive array of car wash and car detailing services sure to impress any vehicle owner. Eco-Clean Car Wash will be the ultimate choice in Boston for people looking for an eco-friendly car wash option. The company uses eco-friendly technology to ensure smart water usage, runs on solar power, and uses chemical-free products to clean and detail customers’ automobiles.
The following are the services that Eco-Clean Car Wash will provide:
- Eco-Express Car Wash
- Full Service Eco-Clean Car Wash
- Eco-Car Detailing
- A La Carte Services (vacuuming, window cleaning…)
Eco-Clean Car Wash will target all vehicle owners in Boston. The company will target owners of cars, trucks, SUVs, RVs, motorcycles, and vans. Eco-Clean Car Wash will also target those individuals who prefer to do business with eco-friendly companies and are willing to spend more for an eco-friendly car wash. No matter the customer, Eco-Clean Car Wash will deliver the highest quality car care and the best customer service.
Eco-Clean Car Wash will be owned and operated by Thomas Wright. Thomas is a former car wash manager for another local car wash. He has gained valuable insights in how to run a car wash business during his time working for Clean & Dry Car Wash. Thomas is a graduate of the University of Boston with a Bachelor’s degree in Finance. He will be in charge of the finances, supplier relationships, and eco-initiatives for the company.
Thomas has recruited an experienced car wash attendant, Patrick Collins, to be his co-manager and oversee the maintenance of the equipment and handle the training and management of the car wash attendants. Patrick Collins has been the top performing car wash attendant at Clean & Dry Car Wash for over five years. Thomas relies strongly on Patrick’s diligence, attention to detail, and focus when providing car detailing services, inspecting equipment, and training car wash attendants.
Eco-Clean Car Wash will be able to achieve success by offering the following competitive advantages:
- The management team, car wash attendants, and car detailers will all provide exceptional service for every customer that comes in for a car wash. The attendants will be trained to employ a high attention to detail to ensure every vehicle is cleaned to perfection.
- Eco-Clean Car Wash strives to live up to its name. The company uses an eco-conscious approach in every aspect of the business from the chemical-free products and water conservation to the recycling program and incentives for customers and employees who make green choices.
- Flexible pricing options – customers can choose from multiple packages, monthly memberships, or a la carte pricing for smaller services like vacuum only or window cleaning only.
Eco-Clean Car Wash is seeking $350,000 in debt financing to launch its car wash business. The funding will be dedicated towards securing the property and purchasing car wash equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, utilities, and marketing expenses. The breakout of the funding is below:
- Property purchase and build-out: $200,000
- Car wash equipment and supplies: $40,000
- Three months of overhead expenses (payroll, utilities): $90,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph below outlines the pro forma financial projections for Eco-Clean Car Wash.
Who is eco-clean car wash.
Eco-Clean Car Wash is a newly established full-service car wash located in Boston, Massachusetts. Eco-Clean will be the most reliable, eco-friendly, and high quality choice for vehicle owners in the Boston area. The company’s eco-friendly approach is built on less water, less energy, and more customer service. Eco-Clean Car Wash will provide a comprehensive array of car wash and car detailing services sure to impress any eco-conscious vehicle owner. The company uses eco-friendly technology to ensure smart water usage, runs on solar power, and uses chemical-free products to clean and detail customers’ automobiles.
The company’s management team is dedicated to training all employees on the best practices for car detailing and customer service to exceed customer expectations. Each car wash attendant and auto detailer is trained to practice attention to detail and thorough cleaning of each car that comes through the car wash.
Eco-Clean Car Wash History
Eco-Clean is owned and operated by Thomas Wright, a former car wash manager who has a Finance degree from the University of Boston. Thomas has worked for a local car wash company and managed a small team of car wash attendants. Thomas’s tenure with the car wash company has given him the skills and knowledge required to venture out on his own and start his own car wash. Thomas has gained a reputation for being an exemplary manager and has a list of car wash attendants who have expressed interest in working for his new company.
Since incorporation, Eco-Clean Car Wash has achieved the following milestones:
- Registered Eco-Clean Car Wash, LLC to transact business in the state of Massachusetts.
- Has identified the desired location and vacant property to purchase for the car wash.
- Reached out to potential suppliers of chemical-free products and eco-friendly car wash equipment to get quotes.
- Began recruiting a staff of car wash attendants and car detailers to work at Eco-Clean Car Wash.
Eco-Clean Car Wash Services
The global car wash industry is an estimated $33B market with North America boasting the most car washes of any region. The United States alone contributes to approximately 43% of the total global market share with over 60,000 car wash locations operated by 16,000 companies with over 163,000 employees across the country. The states with the most car washes are California (2,025) followed by Texas (1,465), Florida (1,289), and New York (901).
The market for car washes is highly fragmented with no major players and no companies with more than 5% market share. The most common types of car washes are self-service bay, detailing services, in-bay automatic wash, hand washing, exterior only, and full service. In-bay automatic car wash stations are the most popular, with 51% of customers preferring this type of car wash.
Car wash operators who use eco-friendly products and run eco-friendly facilities can gain a competitive advantage especially among millennial and Gen Z customers who prefer eco-friendly options and are willing to spend more money on these products and services.
Demographic profile of target market.
Eco-Clean Car Wash will target all vehicle owners in Boston. The company will target owners of cars, trucks, SUVs, RVs, motorcycles, and vans. Eco-Clean Car Wash will also target those individuals who prefer to do business with eco-friendly companies and are willing to spend more for an eco-friendly car wash.
The precise demographics for Boston, Massachusetts are:
Eco-Clean will primarily target the following customer profiles:
- Owners of cars, trucks, vans, SUVs, motorcycles, and RVs
- Eco-conscious consumers
Direct and indirect competitors.
Eco-Clean Car Wash will face competition from other companies with similar business profiles. A description of each competitor company is below.
Clean & Dry Car Wash
Clean & Dry Car Wash is a full-service car wash located in Boston, Massachusetts. The car wash offers a wide variety of car wash and detailing services including automated, self-service, handwash, and no-water wash options. The company is owned and operated by car enthusiasts who know the importance of car care and are dedicated to providing quality service for their customers. Clean & Dry Car Wash ’s promise is to deliver personalized customer service, exceptional car washes, and low prices.
Classy Bubble Car Wash
Classy Bubble Car Wash is a Boston-based car wash and auto detailing company that provides outstanding service to car owners. Classy Bubble Car Wash makes it easy to get a high quality car wash without the hassle. The company provides comprehensive full-service car wash services for cars, trucks, vans, and any other standard-sized vehicle. The owners of Classy Bubble Car Wash are car detailing professionals so they understand how a thorough detailing job should look. The company has three tiers of car wash packages to choose from – basic, premium, and extra premium. Customers can choose eco-friendly product options like chemical-free soap and waterless washes for an additional fee.
Shine Clean Car Wash
Shine Clean Car Wash is a trusted Boston-based car wash that provides superior service to car owners in Boston and surrounding areas. The company has three locations throughout the city and is able to provide a one-stop shop for anyone looking to get a quality car wash fast. Shine Clean Car Wash provides full-service car wash and auto detailing packages. The company’s car wash attendants are trained in efficiency to provide the quickest service possible and get customers back on the road sooner.
Eco-Clean Car Wash will be able to offer the following advantages over their competition:
- Flexible pricing options – customers can choose from multiple packages, monthly memberships, or a la carte pricing for smaller services such as vacuuming or window cleaning.
Brand & value proposition.
Eco-Clean Car Wash will offer the unique value proposition to its clientele:
- Eco-Clean Car Wash uses an eco-conscious approach in every aspect of the business from the chemical-free products and water conservation to the recycling program and incentives for customers and employees who make green choices.
- Flexible pricing options – customers can choose from multiple packages, monthly memberships, or a la carte pricing.
The promotions strategy for Eco-Clean Car Wash is as follows:
Social Media Marketing
The company will invest in professional marketing services provided by a local marketing firm. Social media marketing will be one of the most effective and low-cost strategies for gaining brand awareness and increasing the company’s customer base. The marketing firm will help manage the social media presence by creating and updating various social media accounts such as Twitter, Instagram, Facebook, and TikTok.
Eco-Clean Car Wash will invest in professionally designed print ads to display in flyers, newspapers, magazines, and direct-mailers.
Broadcast & Streaming Media Advertising
The company will invest in commercials to be played on broadcast networks, podcasts, and streaming services.
Eco-Clean Car Wash will work with the same local marketing firm that created their social media strategy to also make the company website. The website will be well organized, informative, and list all the services and pricing options that Eco-Clean is able to provide. The website will also include information on all of the eco-friendly initiatives the company is implementing and ways customers can get involved. The marketing firm will also manage Eco-Clean’s website presence with SEO marketing tactics so that when someone types into the search engine “Boston car wash” or “car wash near me”, Eco-Clean Car Wash will be listed at the top of the search results.
The pricing of Eco-Clean Car Wash will be premium. Customers come to Eco-Clean Wash for high quality eco-friendly washes and superior service. However, customers will also have the opportunity to receive steep discounts for participating in eco-friendly incentives and promotions.
The following will be the operations plan for Eco-Clean Car Wash.
- Thomas Wright will be the Owner and Co-Manager of Eco-Clean Car Wash. He will oversee all finances, supplier relationships, and eco-initiatives for the company.
- Patrick Collins – Co-Manager who will be responsible for all car wash equipment inspections, car wash operations, and attendant training/management.
Eco-Clean will outsource many of its business functions including marketing, maintenance, and recruitment. The company will use business management software for customer relationship management (CRM), accounting/bookkeeping, and employee scheduling.
Eco-Clean Car Wash will have the following milestones complete in the next six months.
10/1/2022 – Finalize contract to purchase property.
10/15/2022 – Purchase car wash equipment and supplies.
11/1/2022 – Begin build-out of the car wash facility.
12/15/2022 – Begin recruiting and training car wash attendants.
1/22/2023 – Implement the marketing campaign.
2/1/2023 – Eco-Clean Car Wash opens for business.
Key revenue & costs.
The revenue drivers for Eco-Clean Car Wash are the car wash fees that will be charged to the customers in exchange for car wash and detailing services.
The cost drivers will be the overhead costs required in order to staff a car wash. The expenses will be the payroll cost, utilities, car wash supplies, and marketing materials.
Funding Requirements and Use of Funds
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of car washes per month: 2,000
- Average fees per month: $35,000
- Commercial property mortgage payment per year: $60,000
Income statement, balance sheet, cash flow statement, car wash business plan faqs, what is a car wash business plan.
A car wash business plan is a plan to start and/or grow your car wash business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your car wash business plan using our Car Wash Business Plan Template here .
What are the Main Types of Car Wash Businesses?
There are a number of different kinds of car wash business , some examples include: Automatic or Tunnel Car Washes, In-bay Automatic Car Washes, Self-service, and Mobile Car Washes.
How Do You Get Funding for Your Car Wash Business Plan?
Car wash businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Car Wash Business?
Starting a car wash business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Car Wash Business Plan - The first step in starting a business is to create a detailed car wash business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your car wash business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your car wash business is in compliance with local laws.
3. Register Your Car Wash Business - Once you have chosen a legal structure, the next step is to register your car wash business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your car wash business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Car Wash Equipment & Supplies - In order to start your car wash business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your car wash business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful car wash business:
- How to Start a Car Wash Business
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- Business Plans - Volume 01
- Car Wash Business Plan
THE DIRT BUSTER
11535 Cornish Blvd. Detroit, MI 46778
March 15, 1993
The Dirt Buster was designed by entrepreneurs wishing to provide a high quality car wash service in a virtually untapped market. Because new construction is necessary, a large amount of initial capital is required for this venture .
Market/marketing, background and purpose, market analysis, financial data, organization and management, miscellaneous issues, critical risks and problems: description, summary of unique features and benefits, overall strategic direction, available materials, description of business, nature of service.
The Dirt Buster is to be a full-service car wash facility comprised of the following features: a one hundred-twenty foot, fully automatic tunnel; four high pressure wand self-service bays; and six vacuum stations complete with fragrance and carpet shampoo dispensing machines. In an effort to optimize our position as premium car care specialists, we will offer our customers the opportunity to purchase quality car care products in our reception area. The full service operation will offer three basic wash packages: a $7.50 Basic wash, a $9.50 Deluxe wash and a $12.50 Super wash.
All full-service wash packages will include an interior cleaning service, which consists of carpet vacuuming, window and dash cleaning, and a preservation treatment. Our coin-operated, self-service bays will cost $1.50 per 4.5 minute cycle. Additionally, all customers will have access to vacuum islands which will cost $.50 per 4.5 minute cycle. Fragrance and shampoo dispensing machines will also be offered, and will range in price from $1.00 to $2.50 per cycle.
Unique Features of Service
The property on which The Dirt Buster is to be located was the site of a car wash approximately ten years ago. For reasons external to the business itself, the owners decided to terminate operations. The existing tunnel structure is ideally suited to house our tunnel operation. The original tunnel's one hundred-twenty foot length, versus today's standard ninety foot tunnel length, provides a significant service advantage over other car washes in the area. Very simply, the longer the tunnel, the more wash and drip space is available and the better an automobile is cleaned and dried during each cycle. Unfortunately, most car wash operators know it is possible to provide reasonably good service utilizing just ninety feet of tunnel space. This reduces the initial construction costs by approximately 25 percent (based on a tunnel structure of 90' × 25' versus 120' × 25' at construction costs of $100/sq.ft.). The bottom line is that most car wash operators sacrifice service to minimize costs. The Dirt Buster's unique position of not having to sacrifice service to lower costs will allow us to provide superior service at a competitive price.
Our market area is characterized by wide ethnic and economic diversity. To capitalize on these demographic factors and concentrate on the unique demands each group asks of the market, our facility will incorporate both a full-service tunnel operation (for those who wish to allow our service team to clean their car) and a self-service facility (for those who wish to take a more active role in their car's maintenance). This type of car wash operation will be one of only three such facilities in the area. Additionally, we plan to provide an automatic dryer for each self-service bay, which will increase customer satisfaction by eliminating the need to hand dry an automobile after washing. Automatic dryers are a new and effective market innovation which currently exist in only one other car wash operation in our region.
After in-depth analysis of our specific market area, national statistics on the car wash industry, and detailed evaluation of nine car wash operations in the area, we expect to generate sales revenues of $667,508 in the first year of operation. We believe our initial customer base will substantially increase as the community becomes aware of our existence, our reputation for excellent service, and our active involvement in community affairs. We then expect our growth to mirror the community's projected market growth, which is approximately 3.5 percent to 5 percent per year. Because there are no other car wash operations within a four mile radius of our site location, we feel confident our predicted growth will, ataminimum, follow industry trends. Therefore, we expect to have a 100 percent market share of our target market for at least the short term.
Stage of business.
A start-up business designed to fill a service void which was created ten years ago after the last full-service tunnel wash facility in this market area terminated its operations. Again, the last full-service tunnel terminated its operations for reasons external to the business itself.
Long Range Direction
We are dedicated to establishing and maintaining the finest car wash operation in the area, specifically known for the quality of service provided and the management's commitment to the betterment of the community.
Market Segment Sought
We are extremely fortunate our service is not limited to a specific segment or group of the market. In fact, The Dirt Buster's sole limiting factor is the small segment of its specific market which is without an automobile. In our market area alone, there are approximately 400,000 automobiles, or .8 automobiles per person.
Benefits of Service to the Market Segment
We will provide the only full service facility within ourmarket area. Additionally, our water reclamation system will provide an environmentally safe means for our customers to clean their automobiles. This differs from residential car washing, where untreated wash water fills storm drains and ultimately empties into our waterways.
Summary of Advertising and Pricing Policies
Our Basic, full-service tunnel wash will cost $7.50. It will entail a full exterior vehicle wash, as well as an interior service to include vacuuming, window cleaning, and dashboard cleaning. Our Deluxe Wash will cost $9.50 and will include all the Basic Wash services as well as an undercarriage wash, a rust inhibitor, and a wheel brightener. The Super Wash will cost $12.50 and will include all Deluxe Wash services as well as a polishing wax and a wax sealant.
We have investigated all available advertising mediums. After in-depth consultations with amyriad of car wash operators in the area, we have decided to utilize the advantages of a variety of mediums. Initially, we will utilize cable television and radio spots, in conjunction with newspaper advertisements, to announce our Grand Opening. We will also use direct mail coupons to increase consumer awareness of our existence. Additionally, we will work cross promotions with businesses in the area as a means to tap the client base they have established. Already, several existing businesses have expressed a desire to do so.
We expect to wash 63,700 cars in the full-service operation and 29,440 cars in the self-service operation during The Dirt Buster's first year of business.
The principal owners will be the full-time managers. Both individuals have served in the United States Army as commissioned officers since graduation from college 12 and 10 years ago, respectively. They have vast experience in the management of finances, personnel, and equipment. While in the Army, both individuals successfully completed two years of company command, which closely parallels the running of a small business; it requires the managing of all associated personnel, budgetary, and operational situations. In addition, one manager is currently working as the assistant manager for a local car wash. This experience has provided invaluable insight into the operational aspects of managing and maintaining a car wash.
One manager will focus on daily operations, including employee hiring, building maintenance, property maintenance, and equipment maintenance. The other manager will focus on marketing, advertising, and community relations, as well as all fiscal matters, including employee pay and benefits, taxes, payables, and receivables. Other members of the management team will provide support to the owners with regard to their specific areas of expertise.
The capital needed to underwrite this proposal will be utilized to renovate the existing tunnel structure, construct four self service bays and one equipment room, and institute site improvements, including landscaping, asphalt repair, night light installation, and installing signs. Additionally, the capital would be used to purchase both full-service and self-service equipment, a water reclamation system, administrative equipment and supplies, the chemical inventory, and to provide operating capital to maintain the operation through its first four months.
Expected annual return for investor.
Given an investment of $683,000, an investor could expect a total return of 20%. This is calculated by dividing net profit by total investment, where net profit does not make a provision for taxes, and includes expense depreciation.
Number of Investors/Minimum Investment
One investor is preferable. However, we have made a conscience decision not to limit the number of investors that may invest in order to retain financial flexibility. Ideally, we would prefer that no investment be less than $50,000, which would purchase a 4 percent equity position. It is our desire that all equity partners be limited partners.
How Investors will Get their Money
Each investor who purchases an equity position will receive their equity share of the net profit at the close of each business year. It is our intention to repurchase all equity stock within seven years, offering a balloon payment.
Our objective is to obtain the financing necessary to bring our concept to fruition. The aforementioned financing package merely outlines one possible financing option. We understand there are a myriad of ways to structure financing, and we welcome the opportunity to explore additional alternatives.
The Dirt Buster concept was born from the frustration we experienced when trying to find a car wash in the vicinity of our homes. Our frustration lead us to investigate the possibility of building a car wash facility. Twenty months of exhaustive research revealed three facts that propelled us forward in our pursuit to build a car wash. First, there is an enormous demand for a car wash in the area. Second, there are no car wash competitors in the area. Third, we were able to negotiate a lease for property ideally suited for a car wash; the traffic count, a key element in predicting a car wash's success, is twice the national average.
Description of products/services.
The Dirt Buster is designed to be a complete car care facility. The operation is comprised of two complementary systems: a full-service system for those customers who wish to allow our service team to clean their car and a self-service facility for those who wish to take a more active role in their car's maintenance. Both systems will be outfitted with the most technologically advanced equipment available, thereby providing our customers with the best service possible. The Dirt Buster's unique operational concept of combining a full-service tunnel operation with a self-service operation provides our customers with service flexibility unmatched by any other car wash facility within a twenty mile radius. Additionally, within our market area, which is determined by the industry to be a 3.5 mile radius from our site location, we have absolutely no competition.
Unique Aspects of our Strategy
We plan to market our car wash utilizing four primary mediums: Discount coupon mailings to selected ZIP Codes, radio and cable television spots, and cross promotions with local area merchants which will allow us to tap into their firmly established customer bases. Additionally, we will approach apartment and condominium management offices, asking them to include promotional coupons in their monthly newsletters.
To develop a highly successful, profitable car wash business which provides our community with a much needed service.
To clear The Dirt Buster of accrued debt and develop it into a $1,000,000 per year operation that is respected as a hallmark of successful customer service.
Our first year's objective is to realize a gross profit of $667,508 based upon an expected service volume of 113,748 vehicles. The full-service tunnel operation will account for 85 percent of revenue on 56 percent of the sales. The self-service operation will account for approximately 12 percent of the revenue on 26 percent of the sales. The vacuum operation will account for approximately 3 percent of the revenue on 18 percent of the sales.
Based on one year's revenue of $667,508 and one year's fixed, variable, and depreciation expenses of $504,364, we expect a net profit, before income taxes and interest payment, of $163,144. This computes to a 24 percent return on a $683,000 investment.
There are no car wash facilities within our target market area, which is defined as a 3.5 mile radius from the location. The closest car wash facility to our proposed location is 4.5 miles away. Therefore, we have no direct competition within our target market area.
Providing our customers the very best possible service is our primary objective. We will achieve this by equipping our full- and self-service facilities with the finest equipment available, supporting our superior technological foundation with the region's best service to cost price package, and by insisting upon a highly trained and motivated service staff.
Our objective is to cultivate our managers from within the organization. This practice is essential to ensuring that our business philosophy and management style remain consistent. Additionally, by adhering to this objective, we possess a means in which to reward employees who continually perform in an outstanding manner.
Our objective is to become an active and solid member of the business community in Hampton County. Additionally, we believe that we should provide an employment opportunity for members of our community.
Nationally, the car wash industry experienced a downturn in sales volume and an upturn in gross profit per car washed in 1990 and 1991. Specifically, between 1990 and 1991, sales volume declined 3.1 percent and gross profit per car increased by 7.9 percent. Thus, on the average, car washes experienced a small increase in gross profit. Industry experts blame the sluggish economy and unusual national weather patterns for the decrease in sales volume and predict volume will rebound to pre-1990 levels as the economy improves.
The location is the most important aspect in predicting a car wash's success. Ideally, a car wash should be situated on a thoroughfare which possesses a heavy volume of traffic, often referred to as "traffic count." The wash location should have readily accessible ingress and egress routes. The target market's population should be at least 30,000 people. A majority of the target market should reside in apartments, townhouses, and/or condominiums.
Our location is easily accessible from two major roads. The population within a three mile radius of our location is 206,909. According to the 1990 survey, our target market is expected to grow at a rate of approximately 3.5 percent per year. Industry studies state a car wash will capture .06 percent to 1.5 percent of the daily traffic which passes its location; thus, the higher the traffic count the better the business's chance of success. Industry studies also reveal the average car wash location's daily traffic count is 24,000 cars. According to the 1990 survey, the daily traffic count in front of the proposed location is 50,000. This translates to between 300 and 750 cars washed per day. It is projected the traffic count in front of the proposed location will grow at an approximate rate of 5 percent per year. This projection bodes exceptionally well for The Dirt Buster.
A recent demographic study predicts a slow, but steady, increase in our target area's population over the next 10 years. Additionally, this study predicts the number of cars registered in our target area will also show a slow, but steady, increase over the next ten years.
Our target market is the most densely populated area in the city and is comprised of a diverse mixture of ethnic and economic groups. This diverse economic and ethnic make-up supports our view that there is a strong demand in our market area for a complete car wash facility that possesses both full-service and self-service facilities. Industry surveys reveal that young people between the ages of 18-25 (11% of the target market), blue collar workers of all ages, and those with little disposable income will patronize a self-service facility. Individuals over 25 (72% of the target market), white collar workers, and those with disposal incomes will patronize full-service facilities.
Buying Habits of Customers
In talking with hundreds of people in our target area over the past eighteen months, we have determined there is an enormous need for a car wash facility in this area. Currently, there is not a car wash facility within a 4.5 mile radius of the proposed location, and our proposal has received enormous support from both civic and government groups in our target market.
Companies in Specific Target Market
There are no car wash facilities within our target market area, which is defined as a 3.5 mile radius from the location. The closest car wash facility is 4.5 miles away. However, there are a number of car wash facilities located in the suburbs, most of which we have made contact with during our investigation into the industry, but who are not competitors due to their distance from our site.
It is virtually impossible to ascertain the industry's sales in the Hampton County and Monroe County areas, as there is no regional association which binds the individual businesses together and maintains such figures. The only way to obtain an active car wash's figures is to ask individual owners. Because this business is a cash business, many operators would not share their revenue figures with us. However, we were fortunate enough to obtain the actual annual financial operating figures from four car wash operations. We were given these figures in confidence and asked not to repeat them. We did, however, use these figures as a gauge to measure the validity of the calculations presented in our pro-forma financial statements. We believe our revenue calculations are extremely conservative, and our expense calculations are as accurately portrayed as possible.
Assessment of leading competitors.
In our target market area we have no direct competition. There are cases where car wash owners have built their business in an area which put them into direct competition with another car wash operation. Business logic dictates that unnecessary competition benefits neither operation.
Current Business Focus
The Dirt Buster's focus in this service-dependent business is to provide the highest quality service, at the fairest price, to the largest percentage of the target market population as possible. This will foster a repeat customer base.
In a cash business, such as a car wash, it is difficult to obtain accurate annual revenue figures for the industry as a whole, and especially for individual operations. However, a number of the car wash owners in the city shared their general revenue figures with us and four car wash operations we studied in depth gave us detailed monthly and yearly revenue and expense break-outs.
Of the four car wash operations we studied extensively, three are just one-year old and the fourth is thirty-years-old. Two of the operations are exterior wash conveyor system washes, one is a self-service wash, and one of the operations is a full-service conveyor system wash. Additionally, one operation combines an exterior wash conveyor system with a five bay self-service facility. We point out these operational and facility configurations because different operation and configuration arrangements drastically affect revenues. For example, revenue produced by an exterior wash conveyor system will be substantially less than a full-service wash facility, given operations with similar traffic count and population figures. Similarly, car washes which combine conveyor wash operations with a self-service operation will, under normal circumstances, produce more revenue than either the full-service conveyor wash operation or the self-service wash facility by themselves. Therefore, the optimum configuration for revenue maximization is a facility which incorporates both a self-service wash facility and a full-service conveyor wash facility. This is The Dirt Buster's operational concept.
Each car wash facility we studied produced a profit, including the two newer facilities. The full-service facility's annual revenues total $432,000. The self-service facility's annual revenues total $121,000. The exterior wash facility with the self-service facility's annual revenues total $522,000 and the exterior wash facility, which is thirty-years-old and possesses the best demographic figures of the washes we studied, generates $687,486 in annual revenues.
Two of the four operations studied possessed a 100 percent market share of their target markets. The other two share their markets equally. However, there is no doubt the close proximity, one mile, of the two washes has adversely affected their profit margins.
All four car wash operations are profitable. However, as could be expected, the oldest car wash enjoys the most lucrative profit picture as it no longer experiences debt retirement concerns. Equipment purchase, construction of building and land, and debt retirement, based upon the averages given, is expected to be approximately 20 percent of gross profit. Fixed and variable expenses, on the average, are approximately 60 percent of gross profit.
In careful examination of the car industry as a whole, the most important factor in an operation's profitability is location. Those that possess superior location produce sound financial pictures 99 percent of the time. Additionally, not enough can be said about a strong clientele base which, because of good service, continues coming back again and again. The chosen location of The Dirt Buster is indeed superior, and our excellent service will guarantee the development of a strong clientele base.
Advantage Over Competitors
To arrive at our price listing for each car wash package, we carefully examined fifteen car wash facilities in the state. We analyzed each facility's wash packages and then compared the price of the package to its service contents to make a qualitative determination on the quality of service provided versus the cost of the service. Unfortunately, what we discovered was that, in most cases, the service provided did not warrant the higher price charged to the customer. The customer was not receiving any significant increase in the service received. Therefore, we carefully constructed our wash packages to ensure that our customers received the best possible service for the price charged.
Our research repeatedly indicated that the wash's performance is directly proportional to the type and make of equipment used. Therefore, in keeping with our business objective of providing the highest quality service possible, we've decided to purchase the most technologically advanced conveyor and self-service equipment available. This technologically advanced equipment will provide us with a qualitative edge over all the car wash facilities within a 20 mile radius of our location.
Advantages of Competitors Over Us
We believe there are only two temporary advantages a competitor could have over The Dirt Buster.
Customer base We will need time to firmly establish a sturdy customer base.
Business experience We lack daily experience in the industry, which our competitors have garnered over time. However, we believe our work at two separate car wash facilities over the last seven months greatly reduces this initial experience advantage.
Description and Assessment of Potential Competitors
We do not believe it likely we will face any competition in the near future. Quite simply, there are only a few pieces of property available which are zoned for and large enough to support a car washing operation in our target market area. The few available are also extremely expensive. Additionally, the majority of the available property we examined during our location search are much too diminutive to host a conveyor system. Thus, any potential competition would be limited to a self-service-only facility which cannot generate sufficient income throughout the business year to render it a profitable venture.
Other Market Features
Impact of the following:
While the sluggish economy of the last few years has had a slightly negative impact on the car wash industry as a whole, more than half of the car wash owners surveyed by the International Car Wash Association Survey in 1990 and 1991 experienced an increase in levels of profitability. While not completely recession proof, the industry has retained a very strong financial picture through difficult economic times created by the prevailing economic downturn, even managing to increase revenues by 10 percent in each of the last three years.
The governmental influence on our business is not extensive. One government mandated facility-design feature is the installation of a water reclamation system. This design feature is one that we would have added to the facility even if not mandated by the county. It greatly reduces our fresh water consumption, which in turn reduces our water bill. In the future, governmental efforts to purify the area's bodies of water may result in legislation eliminating the release of soap, oil, waxes and other contaminants into storm drains by people washing their cars at home. Obviously, legislation of this kind would only enhance our business position.
These factors are critical when selecting a car wash location and determining the type of facility to build. Obviously, the larger the population base in the market area, the better the chance of the business succeeding. Industry surveys indicate that the average car wash operation shares a population base in its target market of 118,000 people with four other competitors. We are in the unique position of having a 100 percent market share of the 206,909 people who make up our target market. Research in the industry reveals specific types of car wash facilities appeal to different social groups. Eighteen to twenty-five year olds, regardless of ethnic group, blue collar workers, and minority groups tend to make the most use of self-service facilities. Twenty-six to sixty-five year olds, white collar workers, and mothers with children utilize conveyor facilities. Therefore, the makeup of a target area influences the design of the car wash facility. Our target area is a diverse mix of ethnic and social groups. We feel it is the most advantageous to build a facility which would cater to all groups in our target market. This is our rationale for developing an operation incorporating both a self-service facility and a conveyor facility.
Seasonal fluctuations, as defined by changes in the weather, directly impact a car wash's business volume. Contrary to logic, the winter months are the peak months for full-service volume, while the self-service volume remains constant throughout the year, with a slight decrease occurring in the November to February time frame. It is not uncommon for a car wash to generate enough sales volume from November through February to underwrite its expenses and debt load throughout the remainder of the year.
Our marketing philosophy is to present our company as an independent, service oriented small business, which is genuinely concerned with providing high-quality service at a reasonable price.
An issue of great concern in the area is water pollution. Efforts are being coordinated state-wide to stop the dumping of untreated sewage into the Bay. Car washing, in an uncontrolled environment, such as at one's home, directly contributes to the pollution of the bay by allowing soap, waxes, dirt, oil, and grime to flow untreated into the neighborhood storm sewer systems which in turn flows directly into area waterways. The Dirt Buster will utilize only biodegradable chemicals which will be cycled through the purification component of our water reclamation system prior to being released into the county sewer system. Once in the county's system, the water will be sent to the sewage facility for recycling and purification. Additionally, 30 percent less water is required to clean an automobile at a commercial car wash than at an individual's home. This helps conserve a precious, and often scarce, natural resource.
One obvious strength of our company is market share. Since no competition exists in our target market, we will possess a 100 percent market share the day we open for business. Another strength is the management team. Both owners possess vast experience in budgetary, equipment, events, and personnel management. Finally, the superior quality of our equipment, in terms of efficiency and effectiveness, allows us to provide a superior quality service to our customer at a cost below that of the regional average.
Overall Marketing Strategy
Our marketing strategy is two-fold. First, we must develop a loyal customer base on which to build our business. Second, we must cultivate and expand this customer base to ensure a long lasting and solid relationship with our repeat customers and continued vitality of the business with the addition of new customers.
Image We Want to Portray
The entire foundation of our business rests on our pledge to provide quality service at a reasonable price. We will portray our business in such a manner. Additionally, we are genuinely interested in the positive development and quality of our market area's business community.
After careful analysis of this region's car wash operator's pricing practices, we crafted a pricing strategy that we believe more closely aligns service with price. Our system incorporates a three tier pricing scheme. In accordance with our pricing strategy, our Basic Wash will cost $7.50, our Advanced Wash will cost $9.50, and our Deluxe Wash package will cost $12.50. Additionally, we will provide customers the option to build their own wash package from a list of individual service options offered. These options will range in price from $1.00 to $3.00. We plan to charge $1.50 per 4.5 minute cycle in our self-service facility, and $.50 per 4.5 minute cycle for the vacuum service, which is in line with the prices that are currently being charged by the majority of the region's self-service facility operators.
Calculating profit margin based upon the projected year-end financial figures is relatively clear cut and yields a profit margin of 40 percent. This percentage was determined by calculating the percentage of gross revenue that both expenses and debt retirement figures yielded, and subtracting that figure from 100 percent. [100% - (percentage of gross revenue expense+debt retirement)=profit margin]. For example, based upon industry averages, our variable expenses represent 45 percent of our gross revenue, while fixed expenses represent 20 percent of our gross revenue and debt retirement represents 15 percent of our gross revenue. These figures added together and then subtracted from 100 percent leaves a figure of 20 percent, which represents the overall businesses profit margin. Individually, our full-service package yields a profit margin of 8 percent, our Advanced Wash package yields a profit margin of 34 percent, our Deluxe Wash package yields a profit margin of 45 percent, our self-service wash yields a profit margin of 67 percent, and our vacuum service yields a profit margin of 87 percent.
As part of our marketing strategy, we will at various times offer discounts on selected wash packages. Discounts will vary from a $1 to $3 reduction of the standard price.
Although we do not have any competitors in our target market to use as a guide for establishing our pricing system, we did evaluate several pricing schemes to assist us in developing one appropriate for The Dirt Buster.
During eighteen months of research and hundreds of conversations with owners of regional car wash operations, two points became very apparent. First, older, established car washes do little to no advertising. Second, new, upstart car washes advertise extensively in an attempt to establish themselves in the community. We found no middle ground in the industry with respect to advertising, and most car wash owners who do advertise believe their best results have come from utilizing direct ZIP Code mailings, local cable TV spots, and cross-promotions done in conjunction with other local businesses.
During our first month of business, we plan to conduct a drawing to giveaway a big screen TV and two plane tickets to the Bahamas. The drawing will take place over the first month we are open for business. To enter, a customer will fill out an entry card with name, address, and make and year of car. The entry form will then be deposited into a central repository until the official drawing on the last day of our first month of operation. Customers need not be present to win; we will notify the winners by mail. The drawing will enable us to build a customer mailing list, to be used in future direct mailing promotions, from the entry cards, and gain initial exposure by bringing customers into the wash.
We plan on advertising our Grand Opening in all advertising mediums, including radio, television, news print, and direct ZIP Code mailings. During our first year of business, we will be actively involved in developing customer awareness of our business through extensive use of the radio, television, promotional giveaways, and direct mailings. We plan to dedicate 7 percent of our monthly gross revenues to advertising and promotions. At the end of each quarter, we will assess the effectiveness of our advertising campaign and make any adjustments necessary to provide us with the most positive community exposure.
Additionally, adjacent to our car wash facility is a 13,000 square foot building. Our plans are to lease the building to a business which operates within our industry, thereby allowing us maximum flexibility in developing cross-promotional plans. Tentative arrangements have been made to lease the property as a detailing shop when The Dirt Buster opens for business.
To build a solid repeat customer base, we will offer bonus services. On a customer's first visit we will provide them with a book to keep track of visits. On a customer's ninth visit to the car wash, he or she will receive a free basic wash. To build return customer traffic, we will also randomly hang scented discount wash coupons on each customer's rearview mirror which are redeemable on the customer's next visit to the car wash. Additionally, as a means to assess adherence to our primary goal of providing exceptional service, we will provide each customer with a postage paid comment card.
Cost of Advertising
Regional cable tv advertisements.
It will cost $1,260 per month to purchase seven daily ads, four before 4 p.m. and three after 4 p.m., 7 days per week on CNN, ESPN, and TNT.
It will cost approximately $1,500 a week for twenty radio spots per radio station. This medium will only be used for the initial advertising campaign as a means to obtain mass market exposure. Cost would not justify extended use.
Direct mail will cost $350 per 10,000 pieces sent. It is the most effective means to reach specific target market patrons, as it offers the most bang for the buck.
The cost of cross-promotion is minimal, and it will allow us to tap into an established customer base.
One big screen TV will cost $1,000. Two plane tickets to the Bahamas will cost $500.
Comment cards will be computer generated at minimal cost.
Fragrance Discount Coupons
The coupons will be computer generated and the scent applied by the car wash. Again, there will be only a minimal cost.
Current Financial Position
In developing our projected financial statements, projected revenues and expenses were calculated, both fixed and variable, by using statistical reference data provided by the industry's national association, the International Car Wash Association (ICA). We coupled the information received from ICA with regionally specific data provided by regional car wash operators and government agencies. In constructing our financial pro forma statements in this manner, we hope to portray as accurately as possible the revenues and expenses we can expect to see. Any errors should be to the high side of expenses and to the low side of revenues; all projections are extremely conservative.
For example, to calculate our projected revenue, we used the industry's capture ratio of the percent of traffic count in any given 24 hour period which a business could expect to utilize its facilities. We then multiplied that figure by the cost of our projected revenue per car, $9. The ICA states that a car wash owner can expect to capture .6 of 1% to 1.5 of 1% of the traffic count on the road on which the car wash is situated. According to government officials, the traffic count passing in front of our site is 55,823 cars a day. Armed with the statistical data needed to project the revenue figures, we examined various car wash operations in the county to gain an appreciation for the validity of the capture ratio. Our investigation showed that, in this region, the capture ratio was an accurate gauge on which to project the business a car wash operation can expect based upon its location.
The car wash industry is cyclical in nature, with the highest point of revenue occurring during the winter months and the low revenue point occurring during the summer months. Our revenue projections reflect that trend. Conservatively, over the course of the first business year, we predicted that, on the average, we will capture .39% of the 50,000 cars that travel pass our location daily. Keep in mind, our projected capture ratio is .21% less than the industry's worst case capture ratio.
To calculate fixed and variable expenses, we used ICA's national statistical information as a guide and spoke with local car wash operators in order to achieve actual monthly expense figures. We then compared these sources of information and developed our own expense analysis ratios. Our fixed expense figures are based upon actual figures gathered from local operators and our variable expenses are based upon a combination of industrial statistical averages and local operator figures. The only expense not strictly in keeping with both national and local operator figures is our advertising expense. We have decided that it is extremely important for us to make our target market realize our presence from day one, so we decided to budget 7.5% of our gross revenue to advertising versus the 4.5% of gross revenue recommended by the ICA.
We calculated our total start-up costs to be $683,000. This figure includes $135,000 for operating capital and a contingency fund.
Profit and Loss Statement
Our pro forma profit and loss statement projects the first year's operating profit to be $163,144.
Cash Flow Analysis
Our pro forma statement of cash projects a positive cash flow starting in month one. At the end of the first year of business, we project a closing cash balance of $281,989.
- Balance Sheet
Our pro forma balance sheet projects our net worth to be $207,745 at the conclusion of the first year of operations.
All fiscal control and accountability will rest with the management, who will be responsible for insuring that daily receipts are properly accounted for, properly documented, and deposited with a financial institution. In conjunction with the CPA, management will prepare the monthly, quarterly, and yearly financial statements.
Our break-even figure in automobiles washed in the full-service operation is 47,154 and, in the self-service operation, including vacuum figures, it is 36,516. These figures represent a 26 percent reduction in automobile wash volume.
The total gross revenue generated with respect to the break-even analysis is $493,470, with $424,386 coming from the full-service operation, and $69,084 coming from the self-service operation, including vacuum figures.
Current assets and current liabilities are 281,899 to 101,356, respectively. This is a 2.78 to 1 ratio.
Implications of Liquidity Ratios
Liquidity ratios provide insight into a businesse's ability to meet all financial obligations incurred during the course of the business year. Normally, financial ratios are used as analytical tools to compare one business to another within a specific industry. Because the ICA has not established any industry ratios, there are none available to compare to the ratios generated in this business plan. However, according to most business analysts, a good target ratio for most upstart businesses is 2 to 1. Therefore, our liquidity ratio of 2.78 to 1 further supports our financial analysis, which suggests The Dirt Buster will meet all liabilities incurred during our first year of operation.
Our gross profit margin is defined as our gross profit divided by our total assets, where gross profit does not include taxes, interest, or the reintroduction of depreciation. Our figures show a margin of 21 percent (163,144/789,389=21 %) .
For our purposes, return on equity and return on investment are defined without figuring depreciation or taxes into the net profit. Our return on equity, using the formula net profit/total owner's equity, works out to 14 percent (96,336/683,000=14%). Our return on investment, or net profit/total assets, works out to 12 percent (96,336/789,389=12%).
Profitability ratios provide insight into a business's ability to make money. As previously stated, financial ratios are used as analytical tools to compare one business to another within a specific industry. Because the car wash industry has not established any industry ratios, there are none available to compare to the ratios generated in this business plan. The examination of our profitability ratios supports our financial analysis which suggests The Dirt Buster will experience a profit at the conclusion of the first year of operations.
We assumed that the interest rate applied to the purchase of our assets would be 10 percent. Additionally, we assumed the useful life of the service equipment and office equipment to be ten years and that of the building and grounds to be fifteen years.
Financial Statement Highlights
The financial figures presented in our pro forma statements are extremely encouraging in that a monthly positive cash flow is predicted. This in turn leads to an expected positive net income and an increase in owner's equity at the year's end.
It is important to note that during the preparation of our financial statements, we endeavored to be conservative in our revenue calculations and liberal in our expense calculations. This approach was intentionally adopted to ensure we maintained a cautious, if not slightly pessimistic, approach to the evaluation of The Dirt Buster's liability.
The executive team consists of the company's two owners, one of which will be located on-site during each normal business day to oversee operations. The managers will divide the duties necessary to maintain the business, which include employee hiring; building, property and equipment maintenance; marketing; advertising; community relations; fiscal matters; employee pay and benefits; taxes; payables; and receivables. Military experience has provided both owners with a vast reservoir of knowledge in the management of personnel, equipment, events, and budgets. While in the military, both were schooled and promoted ahead of their contemporaries and assigned the Army's most challenging jobs. To enhance their professional knowledge of the car wash industry, as well as to gain a greater appreciation for the intricacies of owning and operating a car wash, both are currently working for different car washes in the tri-state area.
Each owner/manager will receive a salary of $2,500 permonth. In the event a net profit is accrued at the conclusion of the fiscal year, it will be equally divided amongst the owners.
Key Managers Needed
Initially, the company will be run solely by its owners. However, during the second year an assistant manager may be hired to assist with the day to day operations and maintenance. Our goal is to develop management from within the company, thereby insuring that positive management policies and practices are continued. Additionally, our policy of hiring from within provides us a means to recognize outstanding work performance and to develop a cohesive management team critical to The Dirt Buster's success.
We plan to hire eleven full-time and seven part-time employees. Sixteen of the employees will constitute our operational personnel, while the other two employees will constitute our sales staff. The sales staff will be responsible for operation of the cash register and the accessory sales area.
Skilled Versus Unskilled
No special skills are required of our operations personnel. Sales staff must possess basic mathematical skills, be able to operate a cash register, and diplomatically interact with the general public.
Our operational employees will receive a beginning salary of $5.00 per hour and will be offered an opportunity to increase their hourly pay in $.50 increments. Our sales employees will receive $5.50 per hour initially, with the same opportunity for the incremental $.50 per hour raise. All raises in base salary are dependent upon performance and the company's financial success. Additionally, the employees will, at the conclusion of each business day, receive their fair share of the collected tips.
Staff size is dependent upon time of day, day of the week, and weather conditions. During traditional peak wash periods, twelve operational employees and one sales employee will be scheduled to work. During traditional off-peak times we will schedule eight operational employees and one sales employee. We will remain flexible in our staffing policy in order to best meet customer demands and most efficiently utilize our employees. Our employee handbook will ensure that each employee understands the importance and applicability of a varied and flexible scheduling process. Our plan is to ensure that each employee receives the training necessary to be proficient in their assigned tasks. Our training program will focus on improving the employees' operational knowledge of the business as well as their interpersonal skills. The program is designed to ensure that our employee-customer interactions are as positive as possible.
The Dirt Buster's employees will be given the opportunity to participate in a health insurance program.
4,001 shares of common stock have been issued. The total value of shares of common stockis $4,001. Presently, 100 percent of the common stockis controlled by two people, who therefore control the operational direction of the business. However, limited partners will be considered in exchange for financing.
Collateral for debt issuance.
All equipment will be used as collateral for debt issuances, as well as the lease to the site location. If we are unable to meet our business obligations, the lending institution controlling assets and the land lease could sell the lease to another business group. They would assume operational control of what would, in essence, be a turnkey operation.
Amount of Equity to be Relinquished in Exchange for Funding
We would consider an equity-limited partner in exchange for financing. The amount of equity to be exchanged for financing would be negotiated on an individual basis.
The expected annual return for an investor depends on the type of investment arranged. Expected annual return for debt financing is approximately 15 percent. The expected annual return for equity financing is approximately 18 percent.
Number of Investors Sought
We have not set a limit on the number of investors we will accept. However, for accounting purposes, a minimal number of investors is the most appealing option.
Minimum Investment Required by Each Investor
Again, we will not set a bottom limit on the size of investments. However, our preference is a $50,000 or greater investment.
How Investors Will Get Their Money Out of the Investment
Each investor will receive a yearly return on their investment based upon the investment contract negotiated. It is the intention of the original partners to buy back all outstanding shares of stock within seven years.
Sales Projections Not Attained
Based upon the extremely conservative figures used throughout our financial calculations, it is possible, although improbable, that we will not meet our projected sales goals. To demonstrate this point, we used the bottom end of the capture ratio the industry experts say a business ought to achieve, and reduced that figure by two full percentage points. We then used that number to calculate the project revenue we can expect to generate during our first year of business.
Unforeseen Industry Trends
Presently, the car wash industry is not expected to undergo drastic changes. Future industrial efforts are focused upon improving the quality of existing methods and machinery.
Competitive Price Cutting
Because we have no direct competition, we are semi-insulated from price cutting schemes. However, we realize we do not operate in a vacuum, and pricing schemes offered by area car wash operators do impact us. In light of this, we've developed our pricing scheme by examining eighteen separate car washes in the tri-state area. We then highlighted the best qualities of each package and built our own unique pricing scale, which we believe fairly balances quality and price.
Unforeseen Economic, Political, Social, and Technological Developments
Two critical environmental issues which concern everyone are the cleanliness and conservation of our finite water resources. Unlike waste water generated from residential car washing, which is discharged directly into storm sewers carrying contaminants directly into our local water ways, the wash water generated at The Dirt Buster will be recycled through a reclamation system. This will cleanse the water prior to its being discharged into the community water sewage treatment plant for further purification. Additionally, the chemicals used by the washing process are specifically engineered to be completely biodegradable and environmentally safe. It is also important to note that residential car washing, on the average, uses 200 gallons of water per wash. Self-service car wash customers use approximately 50 gallons per wash, resulting in a 75 percent water savings in comparison to residential automobile washing. Full-service car wash customers use approximately 84 gallons per wash, resulting in a 58 percent water savings in comparison to residential automobile washing.
The car wash industry does experience cyclical fluctuations in business volume. Peak months correspond to winter months and off-peak months correspond to summer months. It is during these known off-peak months that car wash owners carefully manipulate and orchestrate operations to insure peak efficiency is achieved. Also, during the off-peak period variable expenses decrease by approximately 40 percent of gross expenses as they are directly tied to business volume.
Perhaps the most critical risk we face is that of the establishment of a competitive wash in our target market. While it seems unlikely this will happen due to the cost of obtaining the land necessary to build a car wash facility, it is possible. One very real way we foresee competition presenting itself is in the form of an adjunct wash built onto an existing full-service gas station. While these adjunct washes will not compare to our facility in service or quality, they are less expensive and at times more convenient.
An extremely important feature of our business is its location. Without the proper location, the chances of succeeding are drastically reduced, although not impossible. It is interesting to note that, for the last five years, a regional car wash corporation with eight locations in the tri-state area has actively pursued the property owner to sell so they could establish a car wash on it. For personal reasons, the land owner refused to sell. Such a successful company would not have so vigorously pursued the site if they did not feel the land had enormous potential. We share their enthusiasm.
Our operation will incorporate the newest and most technologically advanced wash equipment in the industry. This will enable us to provide our customers with the best possible service at the best possible price. It will also allow us to ensure that the environmental concerns of the community are respected and acted upon. Additionally, we believe the strongest point in our business is our management team. Both owners possess vast knowledge, gained from operational, budgetary, and personnel experience, from which to direct the business and provide for outstanding customer service.
We are determined to establish a business known for its high quality service at a reasonable price. We see ourselves playing an important part in community activities. We will provide employment opportunities for area residents, as well as a much needed service to the community which protects and conserves our finite water resources.
The following materials are available upon request:
- International Car Wash Association Industry Survey
- Traffic Volume Survey
- Market Survey
- Capture Ratio Calculations
- Break Even Analysis
- Organizational Structure and Concept
- Funding Timeline
- Start-up Costs
- Income Statement
- Cash Projections
- Owner's Financial Statements
- Owner's Resumes
Other articles you might like:
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Car Wash Business Plan Template
If you want to start a car wash business or expand your current one, you need a business plan.
Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their car wash businesses.
Below are links to each section of your car wash business plan template:
Next Section: Executive Summary >
Car Wash Business Plan FAQs
What is the easiest way to complete my car wash business plan.
Growthink's Ultimate Car Wash Business Plan Template allows you to quickly and easily complete your Car Wash Business Plan.
Where Can I Download a Car Wash Business Plan PDF?
You can download our car wash business plan PDF template here . This is a business plan template you can use in PDF format.
What Is a Car Wash Business Plan?
A business plan provides a snapshot of your car wash as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why Do You Need a Business Plan?
If you’re looking to start a car wash or grow your existing car wash you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your car wash in order to improve your chances of success. Your car wash business plan is a living document that should be updated annually as your company grows and changes.
What Are the Sources of Funding for a Car Wash Business?
With regards to funding, the main sources of funding for a car wash are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a car wash is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a car wash. They might consider funding a chain of car washes, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.
CAR WASH BUSINESS PLAN OUTLINE
- Car Wash Business Plan Home
- 1. Executive Summary
- 2. Company Overview
- 3. Industry Analysis
- 4. Customer Analysis
- 5. Competitive Analysis
- 6. Marketing Plan
- 7. Operations Plan
- 8. Management Team
- 9. Financial Plan
- 10. Appendix
- Car Wash Business Plan Summary
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Creating a carwash business plan
A lesson in drawing the best road map to your success..
- - By the books
- - Apps of opportunity and convenience
- - Tips for managing your finances as a carwash owner
When writing your carwash business plan, you need to keep in mind who your intended audience is and why you are writing the plan. Your bank will be less interested in exit strategy and return on investment than equity investors, who will want this critical information. Additionally, a plan written for internal use will be different than a plan written to seek financing as a bank is not necessarily interested in detailed operations of the business.
A good business plan consists of six key components:
- Executive summary;
- Business description;
- Managers and employees;
- Operations and location; and
- Financial projections.
In addition to these sections, a business plan should also have a cover, title page and table of contents. Your business plan can be as long or as short as it needs to be, so long as it addresses the critical points. An average carwash business plan narrative should be 4-15 pages plus financials and appendix items.
The executive summary should be about one-half of a page in length and include what you would cover in an elevator pitch such as:
- A condensed version of the business concept;
- Your service proposition, emphasizing any unique features or benefits of your carwash;
- The demographics of your market;
- A list of the persons on your management team;
- When the anticipated start date is;
- Your equity position; and
- The amount of money needed to start the project.
It is important that your executive summary is concise and to the point. You will go into more detail later in the business plan.
Business description The purpose of the business description is to objectively describe the carwash business and its future potential. You are trying to paint a picture of the potential of your business along with the facts to support it. Try to inject energy and excitement to get the reader enthusiastic about the idea, without going overboard of course.
Be sure to include:
- Your mission;
- What the business does;
- Description of the carwash services;
- Carwash industry information;
- How your business will be organized;
- Status of the business (start-up, expansion or purchasing); and
- Current and future goals.
After describing the business, it is time to describe any additional products or services your carwash is selling. Keep in mind that it is important to show how your services are better than the competition. If you don’t have a good answer then you should rethink your strategy. What is it about your carwash that is going to get the customer to change doing business with the competition?
Marketing The first step in identifying your marketing strategy is to determine who your customers will be. Consider characteristics of your market, such as age, income, interests and/or geographic locations. Carwash customers come in all types; decide who you want your average customer to be and explain what you will do to make them your customers.
Next, you must consider your competition. Attempting to run a portion of your carwash business better than the competition may be difficult, so it is a good idea to focus on being different instead. Can you serve a particular market niche such as the elderly that isn’t being looked at? Can you identify a unique marketing strategy or profit center combination that hasn’t yet been introduced?
Optimally you will want information on at least three but no more than five competitors. List information about what type of carwash the business is, how long it has been operational, its location, services, pricing, quality, etc. and compare your advantages and disadvantages.
With the above steps researched, the promotional strategy follows. The promotional strategy is where most entrepreneurs fail. Do not use a blanket statement like, “I am going to advertise in the newspaper, radio and/or television” without thinking through the process or the customer. The promotional strategy provides you a map of how you are going to reach your market in the most efficient manner possible. Advertising is expensive, use it wisely.
Sales projections One of the more difficult areas of the business plan is coming up with sales projections. This number is probably going to be wrong and that’s okay. What you want is a figure backed up with justifiable data. Just grabbing a number out of the air won’t work. There are many sources to help come up with this number including:
- Industry journals (PC&D publishes an annual benchmark survey for every segment of the industry);
- Trade groups;
- Carwashes in similar demographic areas;
- Industry experts; and
- Census data.
Here are a few things to keep in mind:
- Make sure you can make a profit at whatever price you are selling at;
- If you want to have lower costs and “get your foot in the door” it may be better to offer discounts or coupons initially until your business is better known;
- Don’t be afraid to charge more for your product or service than the competition if you have something of more value to offer.
Management and employees In this section, you describe who is going to manage the business on a daily basis as well as provide strategic direction (if these positions are separate). Each of these people needs to have a brief biography included as well as a resume in the appendix. Try to show how the experience and education of these people will be able to successfully execute the strategy in the business plan and succeed.
Many times the owner may not have the specific experience for this business, so it is very important to use the team’s other professional experiences and explain how it will make for a successful operation.
Next, a brief explanation of the staff, including:
- What positions need to be filled;
- When they need to be filled (this is important in developing financial projections as you may have some employees come on after you start); and
- How much they get paid (be sure to calculate payroll taxes as well, estimate 15 percent if not sure).
- Board of directors;
- Bankers; and
Operations and location The operations and location section of the plan illustrates how you are going to make or acquire your product and information about your business location.
Explain how and where your products or services are made. A few points to include in your plan:
- How does your carwash operate, what steps are in your service?
- Who are your suppliers?
- What are the terms and lead time for this product?
If you are in the classic “I can’t get my location until I get a loan, so I can’t finish my business plan” scenario, list what features you are looking at in a building along with average prices or rents and pad that number a little just in case.
A few things to add:
- Traffic count;
- Building description;
- Specific reasons for this property;
- Proximity to suppliers, roads;
- Average utilities. Be sure to get the last 12 months from the electric company if the building had been occupied. This could be an expensive lesson from a dishonest landlord. If you are opening a new location, try to talk with other carwash operators in a non-competitive area to get an estimate;
- Pictures of the proposed site;
- Floor plan;
- Purchase price or monthly rent/lease;
- Include sales/rent/lease agreement in appendix; and
- If building or renovating be sure to include quotes as this is an area frequently underestimated in costs.
Most financial projections are three years in length. It is a good idea to include a notes and assumptions section to the financial projections page to help make sure all of your numbers come through and provide an itemized list to provide clarity for the reader.
Notes and assumptions to financial projections
- Break out each loan (building, equipment, inventory);
- Interest rate; and
- Cost of goods/inventory;
- Employee wages;
- License and fees;
- Professional fees;
- Rent/property taxes;
- Repairs and maintenance;
- Telephone; and
- Anything else that needs to be explained in the financials that is not in the narrative.
Startup expenses: These are all expenses you will incur prior to opening your carwash. It is recommended to have quotes available or in the appendix for the larger items. It is also recommended that you pad your numbers some as there will always be unexpected expenses that were not accounted for.
Cash flows: The cash-flow statement is one of the most important pieces of your business plan. It shows a schedule of the money coming into the business and expenses that need to be paid and whether you have enough cash to sustain the business gained during the warm month to cover the costs during the winter months.
Every part of your business plan is important, but none of it means a thing if you run out of cash. Should this number be negative, you either need to raise sales, reduce expenses or have more cash.
Your cash flow statement will typically be three years in length with the first year analyzing the monthly figures and later years by quarter.
Profit and loss: This statement, while similar to the cash flow statement but illustrated annually looks at the effects of non-cash charges such as depreciation and amortization to get an accounting overview of the operations of your business.
Personal financial statement: If you are looking at bank financing, every person who will have a 20 percent or more ownership position will need to provide a personal financial statement to show how effective they are at managing your money.
Appendices Appendix items are various pieces of information that help make your case. Include details and studies used in your business plan; for example:
- Quotes for items over $500;
- Resumes of the management team;
- Industry research;
- Demographic data and trends;
- Maps, floorplans or blueprints of location;
- Leases and contracts; and
- Letters of support.
There is a lot to creating your business plan but will definitely make your business stronger. While it may seem easier to have someone else write your plan, there is no substitute to writing it yourself. This is your business and by writing it yourself you will have a better understanding of your business and strategies for success.
Looking for more information and advice on starting a carwash business? Hear from one of the industry’s top experts in the below video interview.
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Sample business plan: How financing your car wash works
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If you want to start your own car wash business , one of the most important issues is financing. In order for your potential lenders to see that you have given thought to this and your planning stacks up, you must provide them with a suitable business plan that pays close attention to all aspects of the project. Here's an example of a business plan for a self-service car wash.
Initially, you have to present your idea in full. What type of car wash is it, how big will it be, where is it going to be located, which customers do you expect to have their car washed there and what is the expected cost? This might look as follows:
Set-up idea car wash
I, John Sample, present with this business plan my idea for the construction and operation of a self-service washing facility including vacuum cleaners and vending machines for detergents and accessories.
The desired location is a site to be purchased in Sampletown with an area of XXXX square metres and which is located next to a petrol station and in the immediate vicinity of the XY shopping centre. The facility is expected to attract customers of the petrol station and the visitors to the shopping centre.
This business plan envisages a car wash of average size with five booths and three vacuum systems. If necessary, it should be easily possible to extend the facility, which is to be taken into consideration during the construction. The investment volume is about €XXX,XXX.
Now you yourself come into play. Who are you, what do you do for a living, what is your marital status? Are you married, is your partner working? Explain what makes you suitable for running a car wash and what your financial background is. Here is an example:
Personal information on qualifications and background
I, John Sample, born xx.xx.xxxx, marital status ..., if applicable partner's profession, live in Anytown. – brief information on vocational training and career history, especially with regard to suitability for operating a car wash – The manufacturer, with whom I also intend to conclude the maintenance contract, supplies the car wash as a turnkey system. The model I have chosen is not only environmentally friendly but also low maintenance.
On the financial situation – providing information about possible reserves, the job and earnings of the partner, existing loans, current expenses and earnings -
Your ideas about organisation and planning
In what form would you like to run the car wash? How will you organise the work? Do you need a lot of staff and what costs do you expect? This paragraph may look something like this:
Legal form of the company, organisational structure and personnel planning
Initially, I plan to operate the car wash as a sole trader, where I as an entrepreneur am liable with my private assets. This decision has been taken because of the low financial investment required. In the long term, however, the company is to be converted into a limited company, so that my personal assets are protected. I will manage the facility and take over the management. My responsibilities include marketing, strategic development and accounting, but also keeping the facility clean, collecting daily takings, and performing minor maintenance tasks.
Since it is not necessary for a self-service car wash to have staff permanently on site, I will only need a temporary worker on a 450-euro basis, who takes over the tasks that arise when I am prevented due to illness or holiday.
Go into detail
Explain in greater detail which offers customers receive at your car wash. You can also list any additional services here, for example:
The product and the type of service
The customers select the programmes in the planned self-service car wash. They can independently combine the pre-wash, the care wash, spot-free rinsing and drying. The vacuum cleaners are an additional offering. In addition, the installation of a vending machine is planned, from which customers can buy additional cleaning products and accessories.
Is it worth it?
Whoever supports you with your financing needs to believe in your financial success. Therefore, explain exactly why the market in your area is not saturated and why you assume that you can win numerous customers. You should include individual figures from the region and describe the localities, such as here:
Market and customers
Since hand car washing in public places is no longer allowed in most areas, the number of customers for car washes is increasing. Those car owners who used to wash their cars by hand prefer to use self-service car washes. The local car wash potential depends on the population density within the immediate vicinity of five kilometres (here about XX,XXX persons) and on through traffic in front of the site. An additional revenue generator is the nearby shopping centre and the petrol station, which does not offer self-service washes. The environmentally friendly detergents planned to be used are in tune with the spirit of the times.
Evaluate the competition
Financiers are also interested in whether and how much competition there is in the area. Describe your competitors and explain why your car wash will still be a success in spite of them.
The next self-service car wash from the intended site is located in XXX, which is XX kilometres away. The car owners from the local area will therefore rather use the new car wash. The car wash in XXX is not to be considered a direct competitor, because the way of washing is different and is preferred by different people – car owners have their cars washed in the conveyor tunnel system, at the self-service car wash they wash them themselves.
Why this is the ideal location
The location of a car wash is key to deciding its success or failure. Explain why the place you have found is ideal for the car wash. Explain why large numbers of customers will use the facility.
The desired location for the self-service car wash is its greatest potential. The regional competition is negligible, and the size of the site of XXXX square metres is ideal for the intended purposes. The site is situated directly adjacent to the main road, which makes wide accesses and exits possible, and has connections for electricity and water. There is a development or zoning plan. Potential customers drive relatively slowly on this stretch of the main road due to the entrances and exits for the petrol station and the shopping centre. They will not be able to overlook the new self-service car wash. It is to be expected that particularly the people who live in the nearby residential area, who refuel and shop here, will soon integrate the car wash into their familiar routine.
What is planned in terms of Advertising?
Even the best car wash is nothing without the right marketing. Present your plans on how you aim to advertise the car wash. Include short-term strategies for the start-up stage, but also your long-term plans. Show that you have dealt with the topic and are using different marketing strategies.
Sales and Marketing
With a self-service car wash, there is no customer loyalty through offering a friendly service. Accordingly, the marketing strategy must ensure that advertising can always be seen, for example, on posters in and around the local area. Alternatively and additionally, advertisements in newspapers or commercials on local radio inform people about the car wash. Particularly during the start-up phase, offering discounts is also a good idea, where potential customers are informed by flyers tucked behind the windscreen wipers – thanks to the nearby car park of the shopping centre, I can quickly reach lots of car owners with this information. It is also possible to ask the owner of the petrol station to put the flyers on display. Other forms of cooperation may be possible here.
How much will you charge?
Anyone drafting a business plan, has to speak about money. The point has now come where you specify concrete sums for your prices. Do not limit yourself to the average prices for the most popular washes, but list all sums in detail. This might look as follows:
In addition to easy accessibility, it is the price that keeps customers coming back. The various programmes have different prices. Whilst pre-washing and spot-free rinsing are slightly cheaper, care wash and wax are slightly higher in price per minute.
- Pre-wash: €X.XX
- Care wash: €X.XX
- Underbody wash €X.XX
- Spot-free rinsing €X.XX
- Drying: €X.XX
- Vacuuming: €X.XX
Altogether, this results in an average total price of around €X.XX per X minutes of washing.
In the founding year, net sales of approx. €XXX,XXX are expected. Assuming net sales per customer of €X.XX, that would mean that XX customers would have to wash their car per day, that is about X per hour in a 10-hour day. After a certain establishment phase, during which the potential customers in the area get used to the car wash, I assume that the annual turnover for the following two years will increase by about 10%. Approximately XX% of sales are spent on goods such as wax, detergents and accessories, and another XX% on site, electricity and water costs.
How you plan to address the local people
You need to tell local people that there is a new car wash in their area and persuade them to visit. What are your plans to do this? Write them down in detail.
The potential customers for the planned self-service car wash come from the surrounding area. Advertising locally is therefore essential. The planning takes several marketing options into account:
- The car wash will be equipped with highly visible flags bearing the logo, and the routes from the main road, petrol station and shopping centre car park signposted (in each case with the permission of the petrol station owner and the shopping centre manager).
- With the local council's approval, signs are put up in the surrounding roads. Billboard advertising in a central location is also planned.
- Flyers are placed under the windscreen wipers of the cars parked on the shopping centre's car park, displayed at the petrol station with the owner's permission and distributed through letterboxes.
- Advertising through ads and local radio stations is costly, but it's likely to be worthwhile for the opening of the car wash. After this, it is used only occasionally, such as when advertising special seasonal discount promotions.
Set out the financial planning
Simply listing the prices is not enough – you now have to sketch out the bigger picture. As part of financial planning, you first estimate the initial outlay.
On the basis of the current planning, the initial outlay comes to around €XXX,XXX. This is made up of the cost of
- the permits
- the purchase and installation of the car wash
- the start-up costs for the business
- the liquidity requirements for ongoing operations
Further information can be found here in the investment, liquidity and profit projection plan.
What do you need to invest?
In addition to the initial outlay from the previous point, you also need to estimate the costs for advertising. All costs for the foundation and starting up the business are listed in the investment plan:
Here is a list of the above-mentioned initial costs including the investment in advertising for the start-up period.
In each case the individual sums with a percentage of the total of:
- Preparation costs (training, courses, exams, consulting, market surveys, etc.)
- Start-up costs (registration costs, permit/business licence, taxes/fees/duties, etc.)
- One-off start-up costs (business acquisition, takeover of addresses, advertising for opening, etc.)
- Investments (site, connections, installations, conversion, vacuum cleaners, car washing equipment, tools, office equipment, etc.)
- Basic equipping with operating supplies (storage facility, wax, detergents, accessories, etc.)
- Total sum start-up and investment costs
How do you remain solvent?
How much will you take in the first few months, what will you spend? Will you always remain solvent? You answer these questions in the liquidity plan:
This entails considering the permanent solvency. Payment delays and outstanding accounts are not an issue for self-service car washes.
The liquidity planning for the first year includes the payments per month, which are made up of net sales, loans, advance payments, government subsidies, shareholdings, etc.
Under the disbursements, the monthly costs are entered for materials, personnel, premises, third-party services, advertising, vehicle, communication, fees, insurances, contributions, consultations, interest, repayments, Investments, taxes, etc.
Monthly coverage, the balance of the previous month and the effective liquidity are calculated.
The big overview
What results, including profits and losses, do you anticipate in the first three years? Your calculations are shown in the profit projection plan:
Profit projection plan
This is where you outline the desired result of the first three years of business activity. The profit and loss account includes income and expenses, the result of operations, earnings before taxes, net income, net loss and depreciation.
In the planning phase, the earnings necessarily only take into account the sales revenues. The expenses are composed of goods used, personnel costs and other operating expenses.
The costs for local marketing and for personnel are manageable and easy to plan. The respective needs are clearly defined. The expenses for starting up the business can be calculated relatively accurately, as well as the necessary user volume.
Thanks to the excellent location, the low level of competition and people's continuing love for their cars, it is to be expected that the eco-friendly self-service car wash at the planned site will be a financial success.
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Car Wash Business Plan Template [Updated 2023]
Car wash business plan template.
If you want to start a Car Wash or expand your current Car Wash business, you need a business plan.
The following car wash business plan template gives you the key elements to include in a winning business plan. It will help you if you need a traditional car wash business plan or a mobile wash business plan. That’s because a mobile car wash business plan is very similar to the traditional car wash business plan except for the location. You will simply specify which one you operate in a few sections of your business plan.
You can download our Car Wash Business Plan Template (including a full, customizable financial model) to your computer here.
Below are links to each of the key sections of your Car Wash business plan:
Car Wash Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
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The business plan for a car wash enables an entrepreneur to examine their business in detail, evaluate the amount of funding needed to get it up and running
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
Property purchase and build-out: $200,000; Car wash equipment and supplies: $40,000; Three months of overhead expenses (payroll, utilities): $90,000; Marketing
We plan to market our car wash utilizing four primary mediums: Discount coupon mailings to selected ZIP Codes, radio and cable television spots, and cross
A business plan provides a snapshot of your car wash as it stands today, and lays out your growth plan for the next five years. It explains your business goals
BUSINESS PLAN. FOR. Car Wash. Date Here. Prepared for: ______ Bank. Prepared by: ... ______ has been in the car wash business for over twenty-five.
Related Articles · Describe your new business. First, it's important to describe the business you want to establish. · Document all aspects of your company.
In addition to these sections, a business plan should also have a cover, title page and table of contents. Your business plan can be as long or as short as it
Your idea · Set-up idea car wash ; About you · Personal information on qualifications and background ; Your ideas about organisation and planning · Legal form of the
Use this free car wash business plan template to quickly and easily create a great car wash business plan to raise funding and/or grow your