10 Steps For Starting a Car Wash From The Ground Up
As a 40 year veteran car wash equipment manufacturer and site developer, we’ve seen it all. We know what a daunting and potentially confusing process starting a new car wash can be. What comes first? Prospecting site locations? Securing financing? Assessing your market? How soon should you begin marketing? How long will the process take?
While we certainly can’t cover everything you need to know to start a car wash in a single post, we can take a few words to cover what we feel are the 10 most important steps to launching your own car wash business.
1) Location is Everything – Go Scouting
Car washes aren’t automatically successful. Great care must be taken when selecting the location on which you want to build. Our Site Model Pages have in-depth descriptions of location criteria to consider (including population, competition, street types, car counts, and more) and our site development services can help you select and approve the best locations available in your area.
Start by driving around your target area, paying close attention to the relative traffic, types of local businesses, and anything that looks for sale. Get a feel for your potential market. You should also visit a commercial real estate MLS like Loopnet.com or many others. Be sure to take your time and never rush into a purchase.
2) Review the Competition
Try to get a feel for the local car washes in the area. How many customers do they have and how aggressively are they marketing? What will they do when you open your wash? Can they afford a multi-million dollar renovation to bring their wash in line with yours? Are they debt free and can they cut prices to outcompete you (with your interest payments) in the short term? Are their customers frequent users and very loyal—or are they waiting for something better?
Entrenched local competition can be dangerous, even for Totally Tommy buildings, and selecting a location with some elbow room between you and competitors is important. But don’t worry too much about single stall automatic car washes or local fundraisers—you’ll be working in a completely different weight class.
3) Do the Paperwork
Find out what local city or county department handles business licenses and request an application, as well as information on local utility usage codes, insurance requirements, tax rates, and other requirements for opening a business. You will also need a Taxpayer Identification Number and you should use the U.S. Patent and Trademark Office’s trademark search tool to check your brand then register to claim it.
Each area and city has different rules, so make sure you take the time to understand everything and keep your business in line. If you can, also get information on local sanitary sewers (for your waste water), utility prices, water usage limits, and other regulations.
4) Planning and Approval Process
Set up a meeting with the city planner. Show them a rendering of your concept and try to get verbal approval of the design—or a list of probable issues to address. If you have approval you can set up a formal meeting to present your plans and have them voted on at a city council meeting. With luck, your Totally Tommy building with its modern style, efficient design, and great investment potential will blow them away! Try to be friendly, optimistic, and down to earth. If the city gets on board with your project it can make the whole process move along more smoothly.
5) Research Car Washes
Tour as many successful car washes as possible to see what makes them tick—especially if you haven’t been in the business very long. Check out automatic car washes, partially automatic, express, detailing, and other washes to see how they differ from one another. Operations, promotions, pricing, services, demographics… Try to learn as much as you can and develop as deep a background as you can with operations, staffing policies, equipment repair, and customer management (aka, complaints).
To help out, our team has training available to teach you everything you need to know BEFORE you’re trying to run your wash on hot days with long lines.
6) Operations Decisions
Will you run your car wash independently or will you have a franchise, LLC, or S-corp? There are many models, each with pros and cons. Franchises offer support at the cost of a residual. Solo operations offer total freedom but deprive you of much-needed backup and brand awareness. How much personal involvement are you looking for? If you plan on hiring a manager instead of handling things yourself, make sure he or she has the necessary qualifications and is heavily invested in your future success.
7) Make a Business Plan!
Your car wash business plan (click for outline) should focus on both long term and short term operations. Use a professional service and remember that the more detailed, thorough, and researched your plan is, the better it will look to investors or your bank. Include costs (up front and overhead costs), planning for building to long-term revenue management, and marketing strategies (launch and long-term). Professional proforma companies are ready to help and our team is also standing by with years of experience to back up our advice.
8) Get Financing
This is likely the most challenging step, and your success here will largely depend on how well you’ve researched and prepared your business plan ahead of time. A solid revenue model can help convince investors to put up the capital for your new car wash business, so be prepared to demonstrate that you need enough funding for a truly high quality car wash facility and equipment with great return potential. You will also need a convincing resume with business and/or car wash experience, and a solid marketing plan.
9) Build the Right Wash
Car washes thrive when they capture the attention of the local market and are designed to make turning in, purchasing a wash, and moving through the tunnel as quick and easy as possible. The Totally Tommy building is the best way to do just this, drawing huge numbers of passing customers with a great looking building, perfected layouts, and a full and fast service menu. Proven in scenarios around the country, every component of this facility design has been carefully thought out to create a single, cohesive investment that pays off. From our towers to our pay system, deceleration lanes, glass walls, stainless steel equipment, and clear roof, everything is designed to project sophistication, professionalism, and value. So why waste money reinventing the wheel, and why risk building a second-best wash when a Totally Tommy wash is waiting for you?
10) Market your New Business
Customers don’t know what they don’t know, so don’t just expect them to line up without any effort on your part. Make sure to let the community know about your wash ahead of the grand opening with onsite advertising as well as print, radio, local web, and possibly TV advertisements. You’ll begin to build a curious customer base who will drop buy and tell their friends and family afterwards. $15,000 or $1 / car for initial marketing including billboards, mailings to 5 mile radius, promotional washes, and radio commercials is a good place to start at your launch and $.10 / car is a standard ballpark long-term rate for the future. One or two day Social media campaigns (incentivize customers with free washes for best results) can also be highly successful. Be prepared to collect feedback and adapt your marketing program for the greatest possible effectiveness moving forwards.
Launching any business, and especially a brick and mortar car wash filled with high-end technology, is a complex and daunting prospect. But don’t worry. The team at Tommy Car Wash Systems has hundreds of washes behind us with thousands of installations and developments. We know the steps you’ll need to take to get your wash planed, approved, built, and operational, and we’ll help you turn a fantastic business opportunity into an even better reality.
For more info please send your requests to sales@tommycarwash.com or give us a call at (616) 494-0411 with your name, any potential sites or locations you have in mind, an idea of your total budget, and phone number or email address for follow up.
Tommy Car Wash Systems