A car wash business can be attractive to a prospective entrepreneur. There are many advantages to starting a car wash business like the enduring need for affordable, accessible vehicle cleaning and maintenance, which makes a car wash appear to be a safe investment. However, there are also disadvantages, like very expensive repairs when equipment breaks and, in some markets, lulls during the off season. Before investing in a car wash business, thoroughly research the market where you plan to operate to determine whether the pros of car wash ownership outweigh the cons – or vice versa.
Pro: Car Washes Are Always Needed
According to Hedges & Company, there were 276.1 million vehicles registered in the U.S. in 2018. That is 276.1 million vehicles that need to be washed and maintained regularly. Despite reports that younger Americans are buying fewer cars and driving less than previous generations, there is no shortage of vehicles on American roadways – and no decrease in demand for car washes.
Car washes also cannot be outsourced. When an American driver needs her vehicle washed, she needs it to be washed locally. Unlike other services that can be automated and outsourced, a car wash business can only operate as a brick-and-mortar location.
Con: Car Washes Are Often Seasonal
In many markets, car washes are seasonal businesses. In snowy climates, clients may get their cars washed more frequently in the winter to remove salt stains. In wet climates, car washes see far less business during the rainy season than during the dry season because rainwater washes dirt and debris off vehicle exteriors. At a self-service car wash, car owners in colder climates tend not to wash their vehicles as frequently during the winter, which is not the case at car washes where the client remains in the vehicle or waits for it to be cleaned and detailed.
One of the most important disadvantages to owning a car wash that prospective owners must keep in mind is how much the weather can impact their profits. Consecutive weeks of rainy weather can mean a sharp reduction in business, and a pollen-heavy spring can be a boon. Operating a successful car wash requires the ability to forecast profits based on annual weather patterns and a financial strategy that keeps the company from going into debt during low-profit periods.
Pro: Car Washes Can Be Profitable
Among the many advantages to owning a car wash, one of the most attractive to new business owners is the amount of profit one can generate. Small-scale, self-service car washes average just over $40,000 per year in profit while larger luxury car washes can net owners more than $500,000 per year.
Con: It’s More Than Washing Cars
Owning a car wash involves more than washing clients’ vehicles or buying a turnkey operation. One of the greatest disadvantages to owning a car wash is the complexity of this type of business and how expensive it can be to repair specialized car wash equipment when pieces break. Prospective car wash owners should keep a sufficient amount of savings on hand to cover equipment maintenance and replacement when necessary, because one broken part can grind the whole operation to a halt.
Another disadvantage is the owner’s responsibility for managing the team that helps keep the business running. Like any other business, a competent, friendly staff can drive up profits or drive customers away. For an owner who does not have the time or management skills to effectively manage a team, hiring competent managers is a must.
The most profitable car wash is not necessarily the one that charges the most. In most cases, it is the one best suited to its location and clientele. When researching ownership advantages, take note of what the other car washes in your area are doing successfully as well as where their services fall short of clients’ needs.