Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their car washes. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a car wash business plan template step-by-step so you can create your plan today.
Note the our template can be used for both traditional car washes and mobile car wash businesses. It can also be used for car detailing businesses.
What Is a Business Plan?
A business plan provides a snapshot of your car wash as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a car wash or grow your existing car wash you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your car wash in order to improve your chances of success. Your car wash business plan is a living document that should be updated annually as your company grows and changes.
Source of Funding for Car Washes
With regards to funding, the main sources of funding for a car wash are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a car wash is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a car wash. They might consider funding a chain of car washes, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.
Car Wash Business Plan Template
Your traditional or mobile car wash business plan should include 10 sections as follows:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of car wash business you are operating and the status; for example, are you a startup, do you have a car wash that you would like to grow, or are you operating a chain of car washes.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the car wash industry. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of car wash you are operating.
For example, you might operate one of these common types:
- Automatic or tunnel car washes (most common) in which a conveyor is used to move the automobile through a series of cleaning mechanisms. The vehicle is then typically hand dried by employees. Car detailing services are typically also offered at these facilities.
- In-bay automatic car washes in which the car is driven into a bay and then a machine and dryer rolls back and forth over it. This is often seen at gas stations and stand-alone car wash sites.
- Self-service, where the customer does the washing manually using including pressurized jet washing.
- Mobile car washes which are completed using water tanks and pressure washers often mounted on trailers, trucks, or in vans. Car detailing is often an add-on or included service for mobile car wash businesses.
In addition to explaining the type of car wash you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry analysis, you need to provide an overview of the car wash business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the car wash industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards environmentally friendly car wash businesses, it would be helpful to ensure your plan calls for such options.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your car wash business plan:
- How big is the car wash business (in dollars)?
- How big is your segment of the business (e.g., traditional vs. mobile vs. just car detailing)?
- Is the market declining or increasing?Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your car wash. You can extrapolate such as figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your car wash business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of car wash you operate. Clearly baby boomers would want a different atmosphere (if traditional car wash), pricing and product options, and would respond to different marketing promotions than teens.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most car washes primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other car washes.
Indirect competitors are other options that customers have to purchase from (or not purchase from in the case of performing car washes themselves) you that aren’t direct competitors. This includes products consumers can buy locally to do their own car washes and detailing.
With regards to direct competition, you want to detail the other car washes with which you compete. Most likely, your direct competitors will be car washes located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What services do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide superior car wash services?
- Will you sell car wash products?
- Will you provide car wash services that your competitors don’t offer?
- Will you make it easier or faster for customers to acquire your services?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a car wash business plan, your marketing plan should include the following:
Product: in the product section you should reiterate the type of car wash that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to regular car wash, will you offer car detailing, mobile options, etc.?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu items you offer and their prices.
Place: Place refers to the location of your car wash. Document your location and mention how the location will impact your success. For example, is your car wash located next to a heavily populated office building, or gym, etc. Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate a mobile car wash, detail how that will expand the geographic area you will serve.
Promotions: the final part of your car wash marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Making your car wash’s lot (if traditional) extra appealing to attract passing customers
- Social media marketing
- Advertising in local papers and magazines
- Reaching out to local bloggers and websites
- Local radio advertising
- Banner ads at local venues
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your car wash such as serving customers, procuring supplies, keeping the equipment clean, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.
To demonstrate your car wash’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in the car wash business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in car washes and/or successfully running retail and small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheet: While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your car wash, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a local corporation approached you with a massive $50,000 car wash contract to do provide car washes to all their employees, that would cost you $25,000 to fulfill. Well, in most cases, you would have to pay that $25,000 now for supplies, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a car wash:
- Location build-out including design fees, construction, etc.
- Cost of equipment like conveyor tunnel, vacuums and dryers
- Chemicals and cleaning supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.
Putting together a business plan for your car wash is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the car wash business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful car wash business.
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