Do you want to open a washing zone for cars, bikes, and other commercial heavy vehicles? Here in this article, we list down the important steps to follow to start a successful car wash business with small capital.
The automobile industry has increased in recent years substantially. The car washing zone is an emerging business in India. Basically, automated car washing offers speed and convenience. Nowadays, consumers consider products and services that save time. The demand for the auto laundry industry is increasing rapidly. Equipment and product technology have made a big impact on the industry over the past decade.
Is Car Wash Business Profitable?
The car wash business presently is a highly profitable business in urban cities. Some of the reasons are the following:
- Potentially high-profit margins of a successful carwash
- It’s still a fragmented industry, so it is possible to build a strong regional brand
- Availability of capital for startup and lending
- It’s largely a cash business
- Unlike other industries, such as food service, inventory does not commonly spoil
- Many allied services you can offer under the same roof.
- No receivables, payment is immediate.
The single biggest motivation for using a professional carwash – it makes the consumer feel good! The emotional rewards outweigh the attributes in terms of motivation. Generally, people use car washes more when the economy goes well. And when motor vehicle sales are up. When people have more money to spend, they are more willing to pay for a car wash.
Here are the 8 Steps to Start a Car Wash Business
Broadly you can start the business in two ways. The first option is buying a franchise and the second is its own brand. You can find a lot of renowned car wash franchises in the Indian market. Starting a franchise car wash business is easier than opening their own brand. However, owning a business secures more profit and expansion possibilities than a franchise opportunity.
1. Select a Location for Starting a Car Wash Business
First of all, this is not a business for rural areas. However, you can start the business in metropolitan cities and small towns too. Basically, selecting a location is the most important aspect of this business.
You can establish a car washing zone nearby major shopping centers and among other businesses and attractions. Additionally, avoid building the washing zone sites within a one-mile radius of an existing car wash.
Fast traffic is harder to stop, causing capture rates to fall. Therefore, it is often best to simply select a location with slow cross traffic. Quick and easy entrances are important. Generally, modern car washes often depend on impulse purchases.
2. How Much Does it Cost to Start Car Wash Business?
Initiating a car wash business demands moderate capital investment. There are different major segments that attract upfront cost involvement. First, you have to invest in securing the space. It is better to start the business in your own space. In case you don’t have space, you can go for rental accommodation.
Apart from the space, you have to arrange a reliable water source for the continuous water supply. Other major investments include building the shop, procuring equipment, staffing, and marketing expenses.
On average, the cost of starting a car wash business in India will cost you Rs. 5 Lacs to Rs 10 Lacs. Additionally, an area of 800 to 1200 sq. ft is needed for running the workshop.
3. Business Compliances
Generally, starting a car wash business demands several licenses and permissions from the local authority. And it varies in different cities. It is advisable to check the local rules and regulations of the area where you are initiating the business. Here, we have listed some of the basic checklists.
- In starting the business, you have to first register the business.
- Apply for MSME Udyog Aadhaar online registration.
- Secondly, check the nature of the land.
- Apply for Trade License from the local Municipal authority
- Contact Pollution Control Board for waste disposal.
Finally, check the tax liabilities and yearly compliance liabilities for your business.
4. Buy Car Wash Equipment
Generally, you will find different types of equipment in the market. Basically, equipment and tools come with different features, benefits, and price ranges. However, you have to procure the equipment as per your specific requirement. You can also purchase the equipment with a hire purchase leasing facility.
5. Hire Manpower
For day-to-day operation, you have to hire skilled manpower. Additionally, you can ask the machine supplying company for providing on-site training. Generally, the requirement of the number of manpower depends on the size of the washing zone.
6. Procure Business Tools
Before you start to offer the services, you must be equipped with the right business tools. And accounting software is the most important aspect here. Basically, accepting and managing bookings, raising tax invoices, and printing money receipts are the major requirements in the car wash business.
Additionally, your accounts department must be prepared for the annual auditing for filling the Income Tax yearly basis. Procure the right accounting software for daily basis bookkeeping and getting a track record.
7. Fix Pricing
Fix the pricing properly. Broadly, you can fix the price for both a one-time service and a monthly basis. In addition to this, you can charge different prices for different services. Such as the price for an exterior wash, only interior cleaning, or for both.
8. Promote Your Car Wash Business
Promotion and right marketing are the most important aspects of getting long-term success in this business. And if you are starting a business of your own, you must put your creative thoughts into creating a regional brand. Select the right name of your business with a catchy logo and catchline. Additionally, create the company uniform for the employees. Also, put a bright and broad sign on the exterior wall of the shop.
In starting, you can offer to launch discounts to your consumers. The hyperlocal promotional strategy is a must. The car owners of the locality must know about your washing zone. Setup your company website. If possible, provide an online booking system. Make your car wash business available on Google My Business also.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.