If you want to open a new car wash or grow an existing one, you need a written business plan. Financiers, including investors and lenders, depend on the business plan to determine whether your car wash presents a reasonable level of risk. Even if you are providing your own funding, a business plan serves as a guide map, helping you grow and develop your car wash in a predictable way.
The Purpose of a Business Plan
Your business plan serves two purposes. It provides a detailed look at your car wash as it exists today, and it delineates the car wash’s future for the next three to five years. The plan consists of clearly defined goals, possible hurdles, and your solutions for overcoming adversity and reaching your goals. Your business plan is a living document that will evolve along with your car wash.
Although it introduces the business plan, the executive summary is generally written last. Financiers typically use the first page of the executive summary to decide whether to read further, so put your most critical elements front and center. Describe your car wash in a clear and simple way. Summarize your market analysis and submit proof that your car wash can meet a defined need. Then explain why your car wash is uniquely qualified to serve that purpose.
The company analysis describes your car wash at this moment in time. Explain its legal structure, when it was founded, and current stage of business, as well as any key goals you have already met. Describe your unique qualifications in more detail, focusing on what sets your car wash apart from those that already exist. If you have developed a new technology for cleaning cars, provide some background information and patent details.
In this section, concentrate on how your car wash fits into its relative market, or the particular niche you will serve. Learn current trends and market projections from industry associations and trade websites, and explain how you will address any identified challenges.
For this section, you need to drill down to exactly who are you trying to reach. Are you targeting the luxury car market? Family sedans? Do your customers want hand detailing or an in-and-out automated machine? How do they make their buying decisions? Are they concerned with price, quality, a plush waiting room, or something else? Decide who your customers are, and then specify their demographics. Explain their unique needs and how your car wash will fulfill them.
Direct competitors are those that provide your target market with a solution to the same needs you intend to fill. Indirect competitors provide a similar service to a different market, or a different service to the same market. Describe each direct competitor individually and explain what sets your car wash apart. Talk about your indirect competitors as a group rather than individuals.
Marketing focuses on the four P’s: Product, Price, Promotion, and Place. The product section details every item or service you will sell, from a basic car wash to add-on protective sprays. Price is the amount you will charge for each service or product, and your rationale for choosing those prices. Promotion is the way you will convince potential customers to spend their money at your car wash, while Place is your physical location and online presence. Another key element of the marketing plan is Customer retention, or how you will build brand loyalty.
The operations plan explains step by step how you will turn your vision, delineated in previous sections, into a reality. The everyday short-term processes include all the individual tasks involved in making appointments, explaining different options and levels of service, performing the actual car wash, and taking customers’ money. The long-term processes focus on the growth of the business, such as opening new car wash locations, reaching sales goals, or starting a new line of car cleaning products.
The majority of your business plan is dedicated to your car wash concept, but the management team section steps back to look at your company’s chances for success as a business entity. Provide your key management team members’ bios, with a special focus on the things in their backgrounds that show business acumen, such as an MBA degree or previous experience in starting a successful company. A strong advisory board can fill in any gaps, if you clearly explain how board members will directly contribute to the company’s growth.
A solid financial plan is one of the most important elements of any business plan, as it is the section that receives the most scrutiny from those in a position to give or lend money. Yet most entrepreneurs are overwhelmed by this section. It must include a breakdown of all current and future revenue streams, their relative importance, and a projected timeline for implementation, as well as projections for how much outside funding will be generated. It also needs a summary of both past and future Income Statements, Cash Flow Statements, and Balance Sheets, based on a number of key assumptions that must be reasonable and verifiable. In addition, providing a strong exit strategy can convince potential financiers that you understand the market and are eager to capitalize on profitability.
The appendix is the place to attach documents that back up the claims you made in the business plan. Full financial projections, details on any proprietary technology, and letters from potential partners are just a few of the possible appendix attachments.
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