Before you invest your money and time into establishing or growing a car wash business, you need to take a step back and carefully analyse all aspects of your proposed business idea.
The vehicle for doing this is a “business plan”, which should demonstrate to potential partners, investors and employees that you are committed to growing this business. The plan should provide long-term milestones that are most essential to the success of your business.
A car wash business plan should identify what exactly is being offered to customers and why they are likely to have their car cleaned by your company. The process of writing your business plan will help to bring assumptions to the foreground. In writing these down and assessing them, you will be able to test them and analyse their validity.
The process of creating a business plan will also involve researching your target market, together with the competitive landscape, and therefore will serve as a feasibility study for the success of your venture.
We’ve outlined some useful tips for creating a car wash business plan below.
The Details of a Car Wash Business Plan
A successful car wash business plan should include:
A business plan will often begin with what is described as an “executive summary”. This is a brief overall description of the business, its name, its location and ownership.
After this you should explain the business in a little more detail, describing exactly what car wash services you intend to offer, for example, hand washing, valeting, self-service or automatic. You should also briefly explain what is going to make your business competitive. This might include things like the level of service, the quality of the service, the price of service and the convenience to customers.
The business should have a Mission Statement that states what the company is about and ought to answers the following questions:
What does your car wash do?
How does your car wash do it?
Whom does your car wash do it for?
What value is your car wash bringing?
Together with the Mission Statement your business plan should also identify some clear objectives, which could relate to profitability targets or expansion ambitions.
Your Business Plan should include a section demonstrating that you have analysed the car wash market. This will include a description of the industry and the general outlook, explaining to an audience outside of car washing how the industry is evolving. You need to identify market needs, market growth, market trends and explain why through your research and testing you have confidence in the prospects for your car washing business.
You can provide a market segmentation that is perhaps based on vehicle ownership along the following lines:
New car owners: Owners of new vehicles are most likely to use a car washing service as they are likely to take great pride in their cars and will therefore bring them regularly to a wash and valeting service.
Older luxury car owners: These people have had their luxury cars for several years and want to keep their cars in the best shape possible.
Sports car owners: These people regard the appearance of their car as important. They will take pride in the look of their car and will have their car washed weekly.
Lifetime owners: These people have owned their car for over five years. They are attached to their car and will bring it in for a wash occasionally, when the car is dirty.
Dealerships: Dealerships often use outside car wash services to clean their vehicles before they are put up for sale.
Local businesses: Some local businesses have fleets of cars and small vans that have to be kept clean in order to maintain their company image. These businesses will be looking for a car wash service which is both cost effective and efficient. They will tend to use a car wash during the week rather than during weekends.
Using a device such as a SWOT analysis you should demonstrate that you have analysed the various opportunities and threats to your business, that you have thoroughly investigated the competition, what barriers exist to entry and any government or local authority regulations that might impact on the business.
You need to identify how the business will be managed and what relevant experience and qualifications the management team possess.
You should also have a Personnel Plan that identifies how many full-time and part-time staff will be employed by the company in the roles of car washing, administration, reception or mechanical technicians, depending on the kind of machinery on site.
You will definitely need to do some serious number crunching to demonstrate to yourself and others that the business is viable.
Start by identifying your start-up costs. Cost items that should be included are everything from the purchase of equipment, rent, staffing and marketing to legal costs and insurance.
Your financial projections in this section should be more than just brief hypotheses on the way the business will fare financially in the future. They must be a detailed account of your company’s projected financial situation based on data-collection and research which have provided you with an understanding of your business’s position in the market in relation to your competitors.
The financial projections section provides readers with a view of where your company is heading to in the future, emphasising growth of profits and finances that are facilitating growth.
Most lenders and banks will require up to three years of financial details, with some requesting up to five years so that they can get an accurate snapshot of the overall performance.
This section should include financial data such as income statements, cash flow statements, balance sheets, as well as accounts receivable statements, accounts payable statements, and documented debt obligations.
Projections must be backed up by data acquired through research and analysis of the components involved, which include competitors, the industry and market, together with the products and services involved. If financial projections are absent from the financial section of the business plan it suggests a lack of direction and the lack of clear-cut goals to work toward.
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A well written business plan will assist you in the operation of your business. It should create the guidelines and protocols required to outline business activity, environmental factors, employee duties, responsibilities and a lot more.
Once you have a solid business plan, you’re well on your way to succeeding in the car wash industry.
Here at PSD Codax, we help car wash businesses get more out of their business through innovative technology and solutions. Browse our catalogue of market leading products, or get in touch with our team today to learn more.