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Self-service car wash business plan for starting your own business
A self-service car wash business runs itself with minimal resources. You set up the bay and car wash machines, while car owners pay to use the machine. It is a good source of passive income; that is a means of income where you can be away and still make money. If you plan to set up a business in this industry, you need to have a comprehensive business plan for a self service car wash that helps develop strategies to establish a startup.
Given the dynamics of a self-service car wash business, it requires an operational strategy business plan. If you are unclear about how to start a car washing business, you can refer to this business plan devised for Auto Paradise. Auto Paradise got this business plan for cleaning services written by a business consultancy firm.
Executive Summary
2.1 The Business
Mr. Jackson owns Auto Paradise, which offers a self-service car wash facility in New Jersey. Auto Paradise is a dynamic car wash self service company that requires $934,100 to establish a four-bay self-serve car wash to provide exceptional car care services to the members of the New Jersey community. Quality services that exceed expectations will establish Auto Paradise as the premiere car wash service in New Jersey, New York.
2.2 Management of self-service car wash business
In your self-service car wash business plan, you should evaluate the technical, financial, and human resources you have at your disposal. And then construct a way to utilize and manage these resources in the best way possible.
A self-service car wash business model would be somewhat similar to a business plan for real estate. However, for specific guidance, you should analyze a business plan for a pressure washing. You can also go through the blogs on do it your self car wash tips, to learn how the operations can be effectively managed.
2.3 Customers of self-service car wash business
The primary customer groups of self-service car wash centers are defined as the following:
- College Students
- Senior Citizens
- Working Professionals
- Tourists
2.4 Business Target
Our target is to become the best car wash service in town. Auto Paradise plans on using topnotch car wash equipment self service for environment-friendly and technologically advanced operations. Our financial targets to meet for the first three years of our launch are demonstrated below:
Company Summary
3.1 Company Owner
Mr. Jackson will be the owner of Auto Paradise. Mr. Jackson has strong leadership and organizational skills that he acquired while working in the automobile industry for the last seven years.
3.2 Why the self-service car wash business is being started
Mr. Jackson plans on using innovative means of providing car wash services that are time-saving and cost-minimizing. Due to his exclusive ideas, he decided to step into this venture.
3.3 How the self-service car wash business will be started
This self service car wash business plan will help you out if you are thinking of building a self service car wash center like Mr. Jackson. Unlike a business plan for janitorial services, a business plan for a self-service car wash is complex. You can only make an accurate plan if you follow the proper stepwise procedure.
Step1: Plan Everything
The first step before starting a business is to develop a business plan. Auto Paradise used a comprehensive window cleaning business plan to outline its business strategy. You must plan everything ahead of time with proper contingency plans, as it helps organize resources in the longer run.
Step2: Define the Brand
The next step is to be recognized by defining your business’s services and values. During this time, you will have to develop and brand your policies so that your customers can identify your unique selling point and choose you over your competitors. You can define and position your brand in the market through various marketing strategies.
Step3: Establish Your Corporate Office
Auto Paradise’s corporate office is based in New York, whereas the self serve car wash franchise is based in New Jersey. This is because Mr. Jackson and the senior management officials reside in New York.
Step4: Establish a Web Presence
Since digitalization and online marketing are integral to a business’s success, your self-service car wash business must have a web presence. Through it, you can let your customers look at the services offered by you and schedule their car washes. Furthermore, the website should contain a manual on how to use a self serve car wash so that the customers who are using the self-service for the first time are assisted.
Step5: Promote and Market
The last step is developing and executing a marketing plan to promote your services. Efficient marketing and promotion can help you position your business in a better position in the marketplace.
| Start-up Expenses | |
| Legal | $188,300 |
| Consultants | $0 |
| Insurance | $23,000 |
| Rent | $38,800 |
| Research and Development | $10,000 |
| Expensed Equipment | $56,000 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $319,500 |
| Start-up Assets | $249,800 |
| Cash Required | $209,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $288,000 |
| Long-term Assets | $287,000 |
| TOTAL ASSETS | $1,072,800 |
| Total Requirements | $1,392,300 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $319,500 |
| Start-up Assets to Fund | $1,072,800 |
| TOTAL FUNDING REQUIRED | $1,392,300 |
| Assets | |
| Non-cash Assets from Start-up | $1,361,600 |
| Cash Requirements from Start-up | $188,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,634,600 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $78,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $96,000 |
| Capital | |
| Planned Investment | $1,392,300 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,392,300 |
| Loss at Start-up (Start-up Expenses) | $146,300 |
| TOTAL CAPITAL | $1,538,600 |
| TOTAL CAPITAL AND LIABILITIES | $1,634,600 |
| Total Funding | $1,392,300 |
Services of self-service car wash business
Before starting a self service car wash, you must decide what services you want to offer. Auto Paradise will establish itself as the premier car wash facility in New Jersey by providing quality service for a competitive price. Deciding on the services earlier helps to focus the staff and resources. As per our self serve car wash business plan, we will offer the following services:
- Laser “touch-free and spot-free”
It uses laser-guided technology to lift away dirt, grime, dust, muck, and mud to revamp your car’s appearance to what it once was.
- Four “self-serve” bays
Auto Paradise will have fully functional bays with facilities such as wheel & tire cleaner, foam brushes, and spot-free rinses. These functions offer the best experience to new users of the car wash as well as regulars.
- Car wash vending services
Car wash manufacturers notice an increase in earnings when you provide a fully stocked vending machine with a wide range of products, such as wipes, little tree air fresheners, and glass cleaners. Therefore, we will provide this service as well.
- Vacuuming and disinfection of cars
Be it a central system or canister style, vacuums are an integral component of a professional carwash. It helps deep clean the car and disinfect it simultaneously.
The costs for setting up a self-service car wash are similar to that of a business plan for a roofing.
If you are thinking of how to open a self serve car wash, this business plan can provide you with thorough guidance.
Marketing Analysis of self-service car wash business
You must have an in-depth knowledge of your target market before opening a self serve car wash. The ideal way of knowing your customers and competitors is to do the market analysis in your business plan for a car wash business.
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If you don’t know how to start a self service car wash business, you can take help from this car wash self-service business plan written for Auto Paradise.
5.1 Market Trends
Small-scale, self-service car washes have been noted to average just over $40,000 per year in profit. On their part, more extensive luxury car washes are known to generate more than $500,000 per year. According to the U.S. Census Bureau, it reports that consumers spend an estimated $5.8 billion at car wash businesses annually. All these stats show that the business is promising to step in.
5.2 Marketing Segmentation
As per this business plan for Auto Paradise, self service car wash manufacturers will be targeting the following customer groups:
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5.2.1 College Students
Due to Auto Paradise being the best self wash car wash in town, and that too at low prices, college students will be the most recurring customers of Auto Paradise.
5.2.2 Senior Citizens
Since automated car washes are complicated for senior citizens in the vicinity, Auto Paradise offers easy-to-use self-service car wash services. This will make them regulars at the shop.
5.2.3 Working professionals
Due to hectic work schedules, professional employees are expected to visit Auto Paradise over the weekends to get their cars washed. That’s why they will be the third target group of customers for the car wash.
5.2.4 Tourists
Domestic and foreign tourists exploring New Jersey on the road will stop by Auto Paradise to wash their cars before hitting the roads again.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| College Students | 25% | 26,500 | 31,800 | 38,160 | 45,792 | 54,950 | 10.00% |
| Senior Citizens | 26% | 27,500 | 33,000 | 39,600 | 47,520 | 57,024 | 10.00% |
| Working Professionals | 27% | 28,600 | 34,320 | 41,184 | 49,421 | 59,305 | 10.00% |
| Tourists | 22% | 24,500 | 29,400 | 35,280 | 42,336 | 50,803 | 11.00% |
| Total | 100% | 107,100 | 128,520 | 154,224 | 185,069 | 222,083 | 10% |
5.3 Business Target
- Have a market share of 30% in New Jersey within the first three years of operations.
- Have average monthly sales worth $28,000.
- Provide initial investors a 33% distribution each of the first three years to recover the initial investment.
- Open a second franchise within one year after the inauguration of the first one.
5.4 Product Pricing
Given that the industry is quite competitive, the initial pricing strategy would be predatory.
Marketing Strategy of self-service car wash business
To become prominent amidst competition, you need to develop an interesting, unique selling point. Moreover, you also need to develop a strong marketing strategy so that more and more people recognize you. You can learn a lot from this marketing plan car wash designed for Auto Paradise.
Following strategies can be used to kick start your self serve hand car wash business:
6.1 Competitive Analysis
- We have excellent customer care service. We will record customers’ feedback to improve their services every time they hire us.
- Our customers would be able to schedule their car wash online through our website.
- Newer self service car wash systems help reduce water wastage.
- Discounts will be offered to new customers, which will help acquire a more significant market share.
6.2 Sales Strategy
- We will advertise our services through Google Local ads service and social media.
- We will make our car wash facility visible on Google Maps.
- We will use Email Marketing for greater reach.
- Introductory packages and incentives will be provided to new customers.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Laser touch and spot free | 5,500 | 5,830 | 6,180 |
| Self Serve bays | 7,500 | 7,950 | 8,427 |
| Car wash vending | 6,600 | 6,996 | 7,416 |
| Vacuuming and disinfection | 5,400 | 5,724 | 6,067 |
| TOTAL UNIT SALES | 25,000 | 26,500 | 28,090 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Laser touch and spot free | $75.00 | $87.00 | $100.92 |
| Self Serve bays | $50.00 | $58.00 | $67.28 |
| Car wash vending | $45.00 | $52.20 | $60.55 |
| Vacuuming and disinfection | $80.00 | $92.80 | $107.65 |
| Sales | |||
| Laser touch and spot free | $412,500.00 | $507,210.00 | $623,665.42 |
| Self Serve bays | $375,000.00 | $461,100.00 | $566,968.56 |
| Car wash vending | $297,000.00 | $365,191.20 | $449,039.10 |
| Vacuuming and disinfection | $432,000.00 | $531,187.20 | $653,147.78 |
| TOTAL SALES | $1,516,500.00 | $1,864,688.40 | $2,292,820.86 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Laser touch and spot free | $30.00 | $33.00 | $34.65 |
| Self Serve bays | $25.00 | $27.50 | $28.88 |
| Car wash vending | $20.00 | $22.00 | $23.10 |
| Vacuuming and disinfection | $25.00 | $27.50 | $28.88 |
| Direct Cost of Sales | |||
| Laser touch and spot free | $165,000.00 | $192,390.00 | $214,130.07 |
| Self Serve bays | $187,500.00 | $218,625.00 | $243,329.63 |
| Car wash vending | $132,000.00 | $153,912.00 | $171,304.06 |
| Vacuuming and disinfection | $135,000.00 | $157,410.00 | $175,197.33 |
| Subtotal Direct Cost of Sales | $619,500.00 | $722,337.00 | $803,961.08 |
Personnel plan of self-service car wash business
To run your self-service car wash business, you would require professionals with technological expertise and management skills. While setting up the business, you should make a list of required employees along with average salaries. It will also help you in evaluating cost of self service car wash startup.
7.1 Company Staff
Auto Paradise’ self service car wash business will hire employees for the following positions:
- 1 General Manager
- 2 Technical Engineers
- 1 Accountant
- 2 General Employees
- 2 Guards
Every other self serve car wash business has more or less the same organizational structure.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| General Manager | $45,000 | $49,500 | $54,450 |
| Technical Engineers | $82,000 | $90,200 | $99,220 |
| Accountant | $34,000 | $37,400 | $41,140 |
| General Employees | $68,500 | $75,350 | $82,885 |
| Guards | $56,000 | $61,600 | $67,760 |
| Total Salaries | $285,500 | $314,050 | $345,455 |
Financial Plan of self-service car wash business
A sole focus on increasing sales cannot ensure success and profits. Instead, an accurate financial plan is a tool you can use to realize your business targets. It can help you assess how much a self serve car wash makes and how much a self service car wash costs. This would clearly outline the potential profit margins of your business.
In your financial plan, you must identify when and how you’ll be able to cover your investment amount with the earned profits. Moreover, it would help to analyze your yearly expenses to find out the possibilities of reaching an economy of scale. It is always better to hire a professional financial analyst to evaluate self service car wash price and make a financial plan for your business.
Here we’re providing a business plan used by Auto Paradise for you to use as a reference.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $1,516,500 | $1,864,688 | $2,292,821 |
| Direct Cost of Sales | $619,500 | $722,337 | $803,961 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $619,500 | $722,337 | $803,961 |
| Gross Margin | $897,000 | $1,142,351 | $1,488,860 |
| Gross Margin % | 59.15% | 61.26% | 64.94% |
| Expenses | |||
| Payroll | $285,500 | $314,050 | $345,455 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $464,700 | $497,500 | $539,355 |
| Profit Before Interest and Taxes | $432,300 | $644,851 | $949,505 |
| EBITDA | $432,300 | $644,851 | $949,505 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $86,460 | $128,970 | $189,901 |
| Net Profit | $345,840 | $515,881 | $759,604 |
| Net Profit/Sales | 22.81% | 27.67% | 33.13% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ
- How profitable is a self-service car wash?
Is owning a car wash profitable? Yes! According to the U.S. Census Bureau, the average monthly revenue generated per bay in a self-serve car wash is nearly $1,500. Small-scale, self-service car washes average just over $40,000 per year in profit, while larger luxury car washes can net owners more than $500,000 per year.
- Is a self car wash a good business?
Yes, the self service car wash for sale is high in demand. It is because people do not have the time and space to wash their cars at home.
- How much does a self-wash car wash cost?
Each type of car wash will have different equipment and land requirements and, hence, a unique automated car wash systems cost. With self-serve bays, depending on your local climate, equipment will cost approximately $15,000 to $25,000. Building costs vary, but the most straightforward structures will start at around $25,000. The prices are similar to those in a carpet cleaning business plan.
- How much does the equipment cost for a car wash?
While figuring out what is a good price for a car wash, you need to understand the equipment costs the business is incurring. Different types of car wash systems need different equipment. Self-serve car wash equipment costs $8,000-$10,000 per bay.
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