How to Start a Car Wash Business

by | May 6, 2020 | Business, Starting a Business

If you’re into cars you may be considering getting into the car washing business. You could look into a car wash franchise, or you could start your own car wash business. There are three phases to any start-up idea. The planning phase ensures you are prepared. The execution phase is when you put your plan into action and the repeatable & expansion phase is when you repeat the execution phase and look to expand the side hustle, if warranted. 

You’re reading this for a reason. You want to know how to start a car wash side hustle. No more wasting time. Let’s dive in!

How To Start A Car Wash Business

Phase I: Planning Your Car Wash Business

Purpose

What is the purpose of this side hustle? Do you want to make some extra money for a few weeks? Will this be your full-time job? Do you have a dream to start a car wash empire? Are you trying to be mobile or have a fixed location? 

Examine your goals and align on the purpose of this effort. It’s not hard but it’s not easy either. Washing cars is outside in the elements and can be tiresome. Once you hone in on your goal, it’s time to start diving into the details to ensure this becomes a success.

Car Wash Side Hustle Planning

Do Your Research 

Have you ever cleaned cars before? Do you know how to properly wash the exterior and interior of a car? If not, go online and learn. There are YouTube videos, articles, or even friends out there that know what they’re doing. Learn in the beginning, not the end.

Do The Math

This is the part of the planning phase that everyone hates but is, BY FAR, the most important to nail. The goals of this section are to figure out:

  • Up Front Costs
  • Ongoing Expenses
  • Cost of each car wash
  • Pricing and Margins
  • Breakeven
  • Expected Range of Revenues and Profits

Up Front Costs

What amount of money do you need at a minimum to start the side hustle? Write a list of all the possible expenses. LLC (Limited Liability Corporation) and legal documentation, sponges, rags, buckets, towels, car soap, a hose with spray nozzle, etc. Now estimate the cost of each of these items that you need to get started and add them up. This is the total up front cost to starting this business.

Tip – Buy in bulk. Price per ounce or rags drops when you buy in bulk. It’s worth it.

Tip – Estimate on the high end. If your up-front costs end up higher than you thought, that’s bad. If they end up lower in the end, that’s good.

Ongoing expenses

Rags, buckets, and sponges are all reusable. They can be washed and used again. Think of the items that are not reusable. These are ongoing expenses. Think of things like car soap, wax, tire oil, etc. List these down and once again estimate the costs and add it up.

Tip – Try and estimate how much you’ll use per day. 

Tip – It’s ok to buy more than you think you’ll use. You NEVER want to run dry on car soap. The worst thing that happens is you use the extra soap for the next day.

Cost Of Each Car Wash

Once you have your ongoing expenses, take that number and divide it by the number of cars you can wash with those goods. This is the cost of each car wash or how much you must pay in expenses to wash a car.

For example, let’s say car soap is $10, wax is $20, and tire oil is $10. Your ongoing expenses add up to $40. Let’s say you estimate that you can wash 10 cars with this amount of materials. $40 / 10 cars = $4 per car. This means that is costs you $4 every time you wash a car.  

Pricing And Margins

Once you know what it will cost you to wash a car, you need to figure out what you’re going to charge! You can either work off of donations and hope people like you and the job you’re doing, or you can charge a flat fee. Most side hustle washes begin at around $8 – $10 and can go up to over $50 if that includes interior washes, vacuuming, shampooing carpets, etc.

When creating a pricing structure, you want to make sure 1. It’s fair to the customer and 2. It creates margins that you’re happy with. Undercharging won’t make you any money. Overcharging won’t bring you many customers. The combination of these will help drive your pricing model.

A margin is simply the difference between what you charge and what it costs you to wash a car. If we take the previous example of $4 per car and you charge the customer $10, your margin is $10 – $4 = $6! This means for every car you wash, you make a profit of $6! Now you can play with the math and get you excited for the possibilities, right?

Tip – Remember, pricing is never forever. You can always change pricing as you see fit.

Car Wash Business Costing

Breakeven 

Once you have the cost of each car wash, calculating the breakeven is simple. Breakeven happens when you make back the money you spent on the items from the beginning. You take the up-front costs and subtract the margin per car which gets you the number of cars you need to wash to breakeven.

For example, if you spent $120 in up front costs and have a margin of $6 per car, you would do $120 / $6 = 20 cars. This means that once you wash 20 cars, your profitable moving forward!

Tip – You should never start a side hustle without a plan to breakeven. Plan for breaking even being the worst-case scenario.

Range Of Revenue And Profit For Your Car Wash Business

Now that you have the estimated up-front costs, ongoing costs, pricing model, and breakeven points, you can start estimating what your revenue and profit could be! The formula is simple. Revenue – Expenses = Profit.

For example, say you expect to wash 40 cars and we use all of the information we previously discussed.

Revenue = 40 cars * $10 per wash = $400.

Expenses = $120 for upfront costs + $40 per 20 cars in ongoing expenses. For 40 cars, that means, you’d spend $80 in ongoing costs so $120 + $80 = $200.

Profit = $400 – $200 = $200!

Tip – 40 cars is a lot and you’re going to need help. You may have to investigate hiring employees. The $200 is the business profit, not necessarily what goes into your pocket.

Tip – I would create a low estimate and a high estimate for the number of cars you will get and have a range of revenues and profits. This way, you can expect the worst and hope for the best!

Plan Day One From Beginning To End

Make sure to have a plan for the day. Write it down with what time you wake up and arrive at your location. Make sure you have everything you need so you don’t forget anything. Have a time that you are ready to start accepting cars. Think about when you and your team will want a break or lunch. Go through the day step by step and make sure it makes sense and you are good with it.

Tip – Let your team know all the details of the plan

Tip – Have a plan for if you run out of something. Who will go get more? How long will it take?

Phase II: Starting Your Car Wash Business

Car Wash Execution

Legal & Incorporate As A LLC.

Go to www.Legalzoom.com and start an LLC. It costs around $100. Just bite the bullet and do it. Trust me. 

Location, Location, Location

This is where you decide if you’re mobile or wash cars at a public location like a Walgreens. Both has its advantages and disadvantages. 

If you’re alone, I would recommend mobile. You can wash cars by yourself but because they take longer, you want to do one at a time. You can do this by walking around your neighborhood, putting some flyers on some doors, or even ask your friends and family if they’d let you wash their cars. It’s a good start and word of mouth can spread fast plus all of the money that the business makes, you make.

If you plan to have a few people to help you, you can make a bigger dent by speaking to your local Walgreens or local store and letting you use their parking lot. The benefits of this is you can use their water for free, there is lots of traffic and cars flowing in and out, and you can wash a higher number of cars. The bigger the team, the more profits you’ll have to share so make sure you’re able to bring in a lot of customers.

Tip – Make sure you speak to the manager to form a relationship to allow you to wash cars there. They will normally let you as it can also be a draw to bring in customers while they get their cars washed.

Gather Your Workforce

If you decide to go with the non-mobile route, you’ll need some extra hands. You can’t wash 3 cars by yourself in 15 minutes, after all! Start with friends who you think wouldn’t mind making some extra money and helping you out. If not, go on craigslist. You’ll find a ton of people looking for extra work. 

Tip – Make sure to be transparent on your goals, how much they’ll make and the hours you expect them to work. Also make sure they know how to wash cars.

Marketing (signage), Social Media, And Deals

Marketing depends on if you’re mobile or not, but the concepts are similar. Think about how you will let people know about your business. If it’s door to door, you can go knocking on doors or post on your Facebook page. If it’s at a Walgreens, you may want to invest in a big sign or two to put out by the streets to inform people. You should still post on your social media pages and have your friends share them out, as well. 

Tip – Think about how you would be convinced to get your car washed. Why should someone let you wash their car for them? Being transparent about your side hustle can also go a long way with customers. People like to help other people out who work hard. Be honest!

Upsell Items (fresheners, wax, vacuum, coupon to come back, etc.)

A lot of car wash companies can increase their revenues by upselling. Some are uncomfortable selling more than a basic carwash but think of it as trying to give the customer a finer experience. Buy a bunch of air fresheners and sell them for $1.00 more than you bought them for. Ask if they’d like a wax as well for $5.00. Give them a free wax if they come back to entice them for more business on another day. Get creative!

Upselling can be fun and can also increase your profits by a large amount. Learn to talk about these things comfortably and don’t be offended if they say no. You still have the basic wash, right?

Phase III: Repeat And Expand Your Car Wash Business

Car Wash Expansion

Repeat To Find Consistency

After the day of washing cars, make sure to take 15 minutes and think about:

  • What went right?
  • What went wrong?
  • Did you use more of less car soap than you thought?
  • How do you attract more people next time around? 
  • Did you have fun?
  • Did you make the money you thought?

It’s important to reflect on the day and ensure it’s everything you thought it would be and how you feel about the future. Do you want to do it again? Was it worth it? You worked hard! Make sure it was worth the time and effort to do it again.

Expand Your Car Wash Business

You did it! You created your side hustle and are profitable. You enjoy running your own business and want to make it bigger! What are the options? How do you do it?

Mobile expansion – If you enjoy being mobile and washing cars in driveways, why not hire someone to do the same on your behalf? You can hire someone, provide them with all the materials and take a portion of their profits. They make less money per wash, but they don’t have to worry about upfront costs, purchases, creating an LLC or anything.

More Locations – If you enjoy working at a local store and having more of a team feel, why not do another location as well. You can’t be in two locations at once but if you build the right team of people, you can provide them with all the logistics, materials, and plan, and let them go. You can pay them per car and make sure you make a small profit off their work as well. As long as they breakeven, there’s very little risk!

Tip – By paying per car instead of per hour, there is much lower risk and you’ll have better control of your margins. If you pay by the hour and no cars get washed, you’ll still have to pay your employees. Paying by car will also entice them to market and get as many cars as they can.

Owning car wash machinery – Maybe you like to wash cars but want that automated experience. Maybe you want to start automated car washes around your city. Costs can be very high and can range upwards to $50,000 for an automatic conveyer bay. While the up-front costs are high, they can also bring in heavy profits over time. 

Tip – You can purchase a used conveyer bay or used equipment

Tip – You can finance bays through manufacturers. They sometimes even help guide you through purchasing land, construction, marketing, etc.!

Starting a car wash business can be a lot of work but is relatively easy to get going with minimal costs. If anything, it’ll help you realize what it takes to start a business. Want to learn more about starting a business? You may enjoy our article on the six best books on starting a business. Get going with your car wash business, enjoy the sun, and wash away!

<span style="font-size:12px;font-weight:500">Author</span><br><a href="https://wealthpursuits.com/author/kevin/" target="_self">Kevin</a>

Author
Kevin

Kevin is an ambitious entrepreneur that is obsessed with all things related to finance. From a young age, Kevin has always been involved with side hustles ranging from online selling to freelance work. Over the years, Kevin graduated from side hustles and started launching multiple online and offline businesses. Kevin is a serial entrepreneur who loves starting new businesses and exploring all things related to business and finance. He is constantly looking for new ways to save money, invest money, and create income streams.

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