OCTANE EXCLUSIVE: How to start a car wash
Starting any business, be it a small home-based start-up, a corner store or a car wash, is always exciting. You likely have been thinking about doing so for some time, imagined all the benefits you will accrue by being an entrepreneur and the joy of interacting with customers.
As anyone who has started a business will tell someone who is thinking about doing so, there are some key steps you need to do and considerations you need to address before you begin your journey. Doing so will help you make the right decisions about your business and keep you from making mistakes that can either place roadblocks to starting your business or hamper it from becoming as successful as you imagined it would be.
Since we are taking about the car wash business, here are some steps that you need to take and ideas you must consider before your grand opening arrives.
Starting a car wash business
1. ASK: Who are my competitors and how will my business stand out?
A friend of mine who has started and managed restaurants always had one piece of advice for anyone who was thinking about starting a food service business, be it a full-service restaurant, a diner or even a café: who is it you are competing against and what are you going to do that is different.
In simple terms, you need to first identify your local competition: who else in your area is operating a car wash, what services are they offering, what prices do they charge for everything from a basic in-and-out wash to a full-service wash, and what other services do they add to the mix. It is no use, according to my friend, to just open a business that is just like every other business.
Then you need to ask what's the state of the market right now? You want to know how many car wash operations are in your area, how many have opened over the last ten years, and just as important, how many have closed over that same time? Is the turnover growing or decreasing? Who earns more: independent car washes or car wash chains?
The next set of critical questions you will need to ask is what do customers want from a car wash? Are your customers professionals who need their cars washed daily because their cars are essential to their business, say Uber or taxi owners, or are they regular consumers, locals who live or work close by? If they are locals in the neighbourhood, are they most interested in a quick service at a competitive price, or do they put a higher value on a premium wash or even a full-service wash with technicians doing some detail work inside the car—a wipe-down of interior surfaces, cleaning the vehicle’s window inside, a vacuum of the seats and floor etc.? Or do they want a place to do that themselves when the vehicle leaves the wash?
Gathering all that information will help you to understand the type of people likely to visit your car wash and help you make decisions as to the kinds services you need to offer and to help you decide upon the kind of car wash you wish to operate: will it be a fully independent car wash operation, a franchise, a full-service operation with detailing included, a fully automatic car wash operation, etc.
Finally, and this is most important, take some time to speak with your peers. Find out what they had to do and what they discovered when looking to start a car wash operation. I can assure you, everyone likely had to tackle the same questions, concerns and issues you are going to face and have plenty of advice to offer, and tips to avoid common mistakes. Take a moment to read our profile here at OCTANE about ClearWater Car Wash to discover how Travis Braithwaite asked the same questions to open his car wash operation.
Finally, reach out to the Canadian Carwash Association (CCA), become a member if you are now already one, and use their Getting Started Toolkit. It provides a useful set of tools and guides that will help you take your first steps.
2. ASK: What type of car wash will best meet customer needs?
Now that you understand your competition, the market conditions in your area and the kind of customer who will use your car wash—or the kind of customer you want to attract—the next question you be asking is what kind of car wash will you need? Need is the critical word here. Not what you would like to have or imagine you should have. Instead, it is what operation is going to be best suited to compete against the others in your market area and what your customer wants use.
There are several kinds of car wash types to consider and there if often a lot of debate around the advantages of each. We are briefly going to look at three of the most common here in Canada:
Tunnel Car Washes
Sometimes known as an express exterior (EE) or conveyorized wash, this car wash is likely the most familiar to Canadians. It uses a conveyor or belt to move vehicles through a tunnel while specialized equipment completes the wash process then dries the vehicle as it exists. They are most often seen in city and suburban locations, and often associated with gas stations that offer a car wash as part of their business. Tunnel car washes are a popular choice as they are made to wash multiple cars at the same time, provide customers with a fast and reliable vehicle wash and can be operated with a small staff.
While tunnel car washes typically require a bigger lot, advanced car wash tunnel equipment can now effectively wash cars with a tunnel as short as 35 feet. The average length of most tunnel car washes is about 120 feet (36.5 metres), newer technologies can now wash car with a tunnel that is only 35 feet in length (10.6 metres), giving the option to have a mini-tunnel car wash, perfect for locations that are limited in space.
Some providers of tunnel car wash systems and technologies include:
OPW Vehicle Wash Solutions, a Dover Company
Coleman Hanna Car Wash Systems, LLC
National Car Wash Solutions Inc.
In-Bay Wash or Touchless
Sometimes called an in-bay automatic car wash, these systems have the driver pull their vehicle into a bay where wash technology moves around the car, be it high-pressure hoses that spray on cleaners and then take them off or brushes that move about the vehicle. They are attractive to many as they operate with a small footprint and work with minimal or no staff, and can be run 24/7. As well, fully touchless systems are often preferred by owners of higher-end or luxury vehicles who prefer no brushes touch the vehicle.
Some providers of this technology include:
OPW Vehicle Wash Solutions, a Dover Company
Coleman Hanna Car Wash Systems, LLC
Self-Service
Sometimes called a manual car wash, this is where the vehicle owner takes their car into a service wash station, pays a fee and then uses the available equipment, cleaners, soaps etc. to wash their own vehicle. The advantage of this kind of car wash is that they are overall less expensive than automatic washes as there is no large machinery and equipment doing the cleaning. And because the customer does the washing, they are attractive to those who want to do the job themselves or believe they can do a better job cleaning their vehicle than an automated car wash can.
3. ASK: What equipment/supplies will I need to invest in?
Once you have decided upon what kind of car wash operation you want, you will need to also think about the various parts of the car wash, that is the equipment. Below are some of the stories we have written about here at OCTANE magazine about such technologies. They provide a good overview of what is new and exciting, along with expert commentary by key players in the industry.
- Chemicals:
Putting on the shine with car wash chemicals
Keep your car wash eco-friendly
Car wash chemistry has come a long way
Car wash chemistry moves to a gentler eco-footprint
- Brushes
- Vacuums
Innovations in car wash vacuum systems drive customer satisfaction
Sound decisions at the car wash
Central or stand-alone? That is the question when it comes to car wash vacuums
- Dryers
Sound decisions at the car wash: Increasing efficiency and reducing noise with modern dryers
4. ASK: What should I consider when putting together a business plan?
The reality for almost everyone starting a business is that you are going to need to put a business plan together to secure the necessary financing. And the most common question one will ask is: How do I put together a business plan? Well, if you have taken the time to do your market and customer research outlined at the beginning, you have already started the process and made good progress.
A good business plan will include this kind of basic information:
- Executive summary: A brief overview of your business and why it will be successful.
- Company description: Information about your business and explaining your competitive advantages.
- Organization and management: How your company will be structured and who will run it. Who will be responsible for day-to-day management or oversee different parts of the business?
- Market analysis: What is the industry outlook? Who are your target customers? What competition are you up against?
- Financial plan: A description of your funding requirements, your detailed financial statements, and a financial statement analysis.
- Marketing strategy: How will you reach and retain customers and increase sales?
The Government of Canada is a good first place to start as it has a useful “Sample business plans and templates” and “Planning a Business” sites that provide useful links to templates and other information that will help one put together a business plan, links to organizations that assist entrepreneurs with business planning, and links to Canadian banks and their business planning services and template offerings. The Development Bank of Canada also provides a useful business plan template.
It is important that you use these services, especially the banking ones, as the requirements you may need to meet for financial support from a bank can vary from one bank to another, and from one type of business to another. Knowing what a bank will want from your business plan will help you put together what information you will need and in the form the bank wants that information to be presented.
5. ASK: What are the start-up and operations costs?
This is one of the harder aspects to break down. Each car wash is different. You may be looking at taking over an existing operation or adding a car wash to an existing business; you may have limited real estate to work with or you may be thinking of building a new car wash operation in a new location.
The cost for each will be different and one needs one to know what will be realistically needed and to make sure those costs are reflected in the business plan to be presented to a bank to secure financing.
When determining a startup budget, you’ll want to consider the costs associated with the licenses, permits, and even insurance. In addition to those, you’ll need to budget for cleaning supplies, necessary equipment and parts, and building and land costs, for example.
You should also take some time to speak with the suppliers who are listed above to help with the cost estimates for equipment, POS systems, supplies and other materials, allowing you to create a realistic cost estimate for the business.
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6. ASK: What permits, licenses etc. will I need?
OK, you have your business plan ready, all your market and customer research are in order, and you are ready to meet your banker, just remember to have one other important piece of information ready. Are you even allowed to open a car wash operation where you want to have it?
Many a small business has been tripped up by not realizing they cannot operate some parts of their business in their desired location because of zoning and license regulations. Just one example: a small store operator in Toronto was in the news over whether it had the right licenses to make and sell coffee and other baked goods to customers as the shop operates in a residential zone.
So, it is important to make sure your business and you as the operator can secure the needed permits and licenses needed to operate a car wash. The first step is to check with your city and municipal offices. In Toronto, one can go to the “Body Shop, Car Wash, Gas Station, Car Dealership or Public Garage” section of the City of Toronto’s Permits & Licenses section to see what is required to obtain the needed license. In the City of Calgary, the government provides a site where you can find answers to how to obtain a proper license for a car wash.
Another resource that one should use is the Canadian Car Wash Association’s Canadian Municipalities—Regulations or Bylaws Related to Car Washes or to Waste Water site, breaking down and providing important links to municipal regulations that your car wash must follow.
It is important then to research what your city or municipality requires and to follow all the correct procedures. It may even be worthwhile to retain the services of a lawyer who can assist in navigating the city regulations and ensuring you get all the correct paperwork to obtain the needed permits and licenses and not run into any unexpected problems later.
7. ASK: How will I market my car wash and build loyal customers?
When it comes to marketing your car wash business, the best strategy is very similar to what was done when first starting out.
- Know your customer
Is your customer someone who is looking for a fast and efficient wash or someone who prefers a higher level of service and interaction with staff?
- Branding
Once you know who your customer is, that will help you create your car wash brand, and how your brand and offerings meet the customer’s expectations and is superior to the competition.
- Think outside of traditional media
Traditional advertising and marketing – newspaper ads, flyers, radio, etc. – are fast becoming relics. The reality today is most people find services and businesses online and on their smartphones. You need to think about how to design your website and online presence for that reality. Hire someone to design your website with mobile top of mind, that it is easy to navigate and to book appointments with no difficulty on a smartphone. Also look at using videos, TikTok and Instagram to reach customers, as they are now becoming the preferred tools for many to get news and communicate with people. And use SEO optimization to ensure your business stands out in an online search.
- Loyalty programs
Loyalty programs are a way to retain customers. Look at putting in a loyalty program, one that either gives customers rewards or discounts or added services for joining. The idea is to incentivize customers to continue doing business with you, and to strengthen your relationship with them.
