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How to Start a Car Wash Business

By Kira Gavalakis

Published on 13 Mar 2023 6 min read

There’s just something about a pair of glistening wheels that makes your heart skip a beat — its shiny body shimmering down the highway, sunlight reflecting off the sparkling windshield. “If I were the embodiment of that clean car, what would my life look like?” you think to yourself. While reincarnating as a car might not be the next pioneering technological movement, one thing’s for sure: you might be destined to own a car wash business.

The Types of Car Washes

Think of the two types of car washing businesses representing watching a DIY YouTube channel versus hiring someone to do it for you. There’s self-service, which offers tools, products, and cleaning supplies for a patron to clean their car themselves, and machine car washes, which require either touch machinery — automatic car wash machines and tunnel machines to name a few — and touchless car wash machinery— high-pressure, low-volume cleaning methods.

Business Types

Choosing a business type will depend on the services you want to provide. Like with other storefronts, you have the option to franchise your business — own a small business under the name of an existing company — or start your own business.

Franchise

Zips Car Wash, Mister Car Wash, and Driven Brands have created names for themselves in the U.S. — and with your help, they can continue expanding to new local markets. When you think of a franchise, think of a turnkey option to start a business, with all of the company operations, managing guidelines, and store operations that you need to get a business started.

If you have a passion for running and managing a business and dream of working for an existing brand, having a franchise is a great option, but it isn’t without a few drawbacks. Like hiring a freelancer through a staffing company, additional overhead fees going straight to corporate won’t touch your local branch or employers.

Your Own Startup

While starting up your car washing business won’t incur corporate fees, you won’t have corporate expertise to help you. Instead, you’ll be running by trial and error, which for some eager entrepreneurs is half the fun of starting your business. With a startup, you can create a business that instills your values, rules, and regulations; you can decide if you want to offer a veteran’s discount, raise your pricing, or put in a cafe for customers waiting for their car.

You’re also granted the opportunity to start as minimally as you’d like and scale your business when you’re ready. Gain the runway you need to invest in your business when it’s time.

Steps to Start a Car Wash Business

1. Develop a Business Plan and a Business Name

A business plan doesn’t have a one-size-fits-all approach, but it does have some basic elements:

• Executive summary: Why do you want to start a car wash business, and how it will differ from others?
• Financial information: How you’re going to fund your venture.
• Marketing and operational strategies: Strategies to let people know about your car wash.

2. Study Competitors or See What’s Missing

You can learn from your competitors. Eric Yuan founded Zoom after longing for an easier way to maintain his long-distant relationship, and Sarah Blakely accidentally found Spanx when cutting up tights. Sometimes it’s about seeing what’s missing or seeing how you can make an existing item better.

3. Identify Startup, Operational Costs, and Pricing

Using that same competitor research in step two will help you frame how your pricing will vastly exceed your startup cost and operation costs and yield a high return on investment. Unlike, say, digital marketing agencies, car washes are relatively transparent about their pricing. But also unlike digital marketing agencies, there’s a gargantuan startup cost compared to a service-based business.

This is when financial logistics come into play: do you have an established business type? A business bank account? Are there business loans available in your state and county, and do you plan to utilize them?

4. Choose a Business Name and Niche

Here’s the fun part. You might have already filled this out in your business plan, or left it as an “I’ll circle back to it”. Recognizing who you’re serving and your pricing model will (hopefully) synchronize with your car wash niche.

Perhaps you want to add a feminine spin to your car washing business, creating The Body Bubble Bath: a luxurious car washing experience perfect for your Paris Hilton-esque neighbor whose pink Jeep is begging for a “wash me” finger stenciling after her trip to the mountains.

Or have you ever longed for a car washing experience that you don’t want to slink out of when you leave? A friendly staff, a tea bar, bean bag chairs, and a warm and welcoming staff could be the pinnacle of your business, The Car Cafe.

Your business name doesn’t have to be complicated, but it should align with your niche.

5. Find Your Perfect Location

Picture a car wash in your area. You’ve probably seen it because you’ve driven right by it. But it’s not just about the location; it’s about the average car density, how many seconds they can see your sign before passing, the road’s speed limit, and daily vehicular density.

Because wouldn’t you want to get your car washed on your way home, not a 20-minute detour?

7. Pick a Business Entity and Register Your Business

Sole Proprietorship — no legal distinction between the business and the car wash owner. High risk of liability issues if a legal issue comes up.

Partnership — an agreement between two business owners to start their venture together. Sometimes it’s official; sometimes it isn’t.

Limited Liability Company (LLC) — a business type that legally separates the business owner’s personal liabilities from the business’s.

Corporation — a business type owned by shareholders and overseen by a board of directors.

8. Obtain All Licenses, Permits, and Insurance

Take into account the general requirements for saving your business if something were to happen to your clients or their cars. JBS Industries recommends:

• General liability insurance — in case of injury to a person on your premises or any car malfunctions happen during or after a wash
• Workers’ comp — in case you have a staff member who hurts themselves on your property
• Commercial property insurance — including vandalism, theft or fire
• Business owners’ policy — commercial property and general liability insurance

Check your state to see what licenses, permits and insurances are required for your car wash business.

9. Find a Technique for Managing Your Business Finances

Count on accounting to help you track what you’re making — or losing — from your business. Use basic accounting tools like Quickbooks for managing income and output or Gusto for payroll. Stripe’s payment processor serves as an uncomplicated POS (Point of Sale) to help track income and manage car wash subscriptions. You can stick to managing bookkeeping yourself or use a business solution like doola to help manage it for you, especially so you’ll never miss anything come tax time.

10. Advertise Your Car Wash Business

For local businesses like car washes, connecting with your community directly is the simplest way to get the word out about your services. It’s not to say to avoid all social media, but start posting in local Facebook groups and developing connections with other businesses that can partner with you.

Think of unique strategies to get more potential customers traffic to your spot, like offering a free first wash, a discounted first month when signing up for a subscription, or serving free cookies after a wash every Friday.

Fill the Streets With Shinier Cars and Leave the Logistics to doola

Doola will stick with the hard stuff for you: the business formation, bookkeeping, and financial upkeep of your car washing business. Now get back to running Body Bubble Bath — your neighbor’s car is ready. 

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