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How to Write a Business Plan for a Car Wash: Complete Guide

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your car wash, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your car wash business plan. Use this template to create a complete, clear and solid business plan that get you funded.

For more information on car wash businesses, make sure to read our guides below:
How To Start a Car Wash: Complete Guide
How Much Does It Cost To Start a Car Wash Business?
How To Build a Financial Model For a Car Wash
6 Strategies To Increase Car Wash Sales & Profits
How Profitable Is a Car Wash?

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire business plan below.

Why do you need a business plan for your car wash?

The purpose of a business plan is to secure funding through one of the following channels:

  • Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
  • Obtain private investments from investment funds, angel investors, etc.
  • Obtain a public or a private grant

How to write an executive summary for your car wash?

Provide a precise and high-level summary of every section that you have included in the business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately. Ensure that the executive summary doesn’t exceed 2 pages in total.

The executive summary usually consists of the 5 main paragraphs:

  • Business overview: introduce your car wash company: what is your business model (hand wash vs. automated car wash ; franchise vs. independent business), how many car wash bays will you operate, how many employees will you have, where will the car wash be located, etc.
  • Market overview: briefly analyze the car wash industry in your service radius (area), your competitors and target customers (average income, demographic distribution, etc.). Also outline the specific problems in your service area that you intend to solve and how you differ vs. competition
  • Management & people: introduce the management team and their industry experience. Mention your business partner(s), if any. Also give here an overview of the different teams, roles and their reporting lines
  • Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? Also include here a small chart with your key financials (revenue, net profit)
  • Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last? How will you spend the money?
An example of a Funding ask slide (source)

2. Business Overview

The Business Overview segment of your car wash business plan will introduce your company and try to answer some important questions that potential investors and lenders may have. Here is a sample list of questions that you must try to address in the company overview section:

  • Why are you opening a car wash service?
  • Where is your shop located? Why did you choose that location?
  • What services will your offer?
  • What will be your pricing strategy?
  • What will be your operating hours?
  • Who is your target audience?
  • How many car wash bays will you operate?
  • What will be the legal structure of your company?

a) History of the Project

Any business must have three components:

  • Passion & experience of the business owner
  • The rationale behind you starting this business today

Passion & Experience

You must be passionate about the business and demonstrate the same to the potential lenders and/or investors through the business plan.

Also, you must have some experience or training in this type of business. For example, you might have been a senior manager at a car wash in the past and want to build your own today.

Rationale

The business must try to resolve some issues in its current area of operation. For instance, there may not be any 24×7 car wash facility in the area or maybe there are no full-service car wash facilities nearby and your company will resolve that problem.

Splash Car Wash owners Chris Fisher, left, and Mark Curtis, at one of their 19 car wash locations at 625 W. Putnam Ave. in Greenwich, Conn., Wednesday, July 22, 2015.

b) Business Model

Describe the business model that you will adopt in this sub-section. Try and answer some questions like:

  • Will you acquire an existing car wash facility, a franchise? Or will you start your own car wash business from scratch?
  • What type of car wash is it (full-service, automated, self-service, hand wash, etc.)?

For example, here are a few examples of the different types of car wash:

  • Full-service car wash: This vehicle wash is the most thorough. The automobile will have its outside cleaned, the inside of its windows washed, and its inside vacuumed. Customers wait in the waiting area
  • Self-service car wash: There are self-service car washes in practically every town for those who enjoy washing their own vehicle. These car washes allow customers to wash their own vehicle anyway they choose with high-quality solutions and brushes and wands
  • Brushless car wash: The phrase “brushless car wash” is used in the industry to describe vehicle washes that use soft cloth pads as equipment. Because they are gentle on a car’s surface, cloth and more recent synthetic variants of cloth are frequently utilized, and regular brushless car washing greatly reduces the risk of paint oxidation
  • In-bay touchless automatic car wash: This is a reference to the touchless car washes that may frequently be seen at convenience stores and gas stations. When using a touchless in-bay automated car wash, you pull your vehicle into a bay as directed by the LED signs, and the machinery works its way around your vehicle to clean it using carefully formulated detergents and pressurized water streams

c) Pricing Strategy

Explain the pricing strategy of all your car wash services in this segment. Essentially, you must provide an estimated price range for specific services.

We strongly recommend you include here a pricing list for the products and services that you will offer. You don’t need to provide precise numbers. Average pricing will do.

Offering a pricing table is important because your pricing strategy will allow investors to tie your pricing strategy with your financial projections.

Legal Structure

d) Legal Structure

Finally, your business overview section should specify what is your company’s legal structure.

Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

Download the Car Wash financial model template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

3. Market Overview

A complete understanding of the market where you want to operate is important for the success of your business.

For example, if you want to open a brushless car wash facility, which happens to be the only facility of its kind in the area, it makes sense.

Similarly, if your car wash facility is a self-service facility in an area with a high percentage of white-collar workers and mothers with children (who generally prefer conveyor facilities over self-service facilities), the business will not succeed.

Therefore, you must cover 2 important areas in the market overview section of your business plan,:

  • Market trends: how big is the car wash industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
  • Competition overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
  • Customer analysis: what is your target audience (customers)? What type of cars do they have? How much do they spend on car wash services per year?

a) Car Wash Industry Status Quo

How big is the car wash industry in the US?

The US car wash industry is estimated at $13 billion in 2021, and is expected to grow at 3.1% from 2022 to 2030. Factors driving market growth include stringent environmental regulations that restrict residential car washing in some states.

The US car wash industry is worth $13 billion in 2021 (source)

How big is the car wash industry in your area?

After the US, assess the size of the car wash industry in your city or area. Focus on the zone where you plan to offer your services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup.

To give you an example, let’s assume you plan to operate in an area where there are already 30 car wash businesses:

As we know, the US car wash industry is worth $13 billion today, and there are about 60,000 car wash businesses across the US. This means the average annual turnover per car wash is around $220,000. Now, we can safely assume that the car wash industry is worth $6.5 million in your area.

How fast is the car wash industry growing in your area?

Growth is an important metric for assessing the status of the car wash industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 25 competitors in the region in 2018, and 30 in 2022, the car wash industry growth rate in your area is about 5% per year.

What are the current car wash market trends in your area?

It is vital to understand the car wash trends in your target location because it will allow you to come up with effective marketing strategies. 

The best way to perform your research will be to talk with your potential customers. Also, you can study competing car wash facilities to get an idea of the type of customers they receive, the services they provide, etc.

Some common questions you may ask the target audience include:

  • What type of car wash facility do they want?
  • How many vehicles do they have in a family?
  • How frequently do they avail car wash services?

b) Competition overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their products and services, marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same services, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.

Competitor #1Competitor #2Competitor #3
Locationxxxxxx
Business model Full-service car washSelf-service car washBrushless car wash
Other services offeredxxxxxx
Marketing strategySignage
Signage
Radio ads
Signage
PPC ads
Social media ads
Radio ads
Signage
Social media content
Radio ads
Loyalty programs & rewards
Google Rating4.3 (487+)3.9 (158+)4.7 (687+)
Average Pricexxxxxx
Shop size3,000 sq. ft.2,500 sq. ft.3,500 sq. ft.
Staff121015

Car Wash SWOT Analysis

Try to provide a SWOT analysis. It must be crisp and highly focused. SWOT stands for Strength, Weakness, Opportunities, and Threats.

Here is a sample that you can use as a reference:

  • Strengths: 5 years of experience in full-service and brushless car wash; eco-friendly and bio-degradable chemicals cycled through water reclamation system’s purification system; a team of highly specialized team with experience in equipment, etc.
  • Weaknesses: Startup costs, no initial reputation / brand image
  • Opportunities: High percentage of resident car owners and located close to businesses with delivery and company cars
  • Threats: Established competitors with large existing customer base and years of operational experience

A clear understanding of your strengths and weakness along with opportunities and threats in the real market can help you to design your marketing strategy. It also helps potential investors to assess the risk and reward profile of your business.

c) Customer analysis

This is a section where you should provide a detailed analysis of your target audience. Some important points that you must include in your customer analysis include:

  • Age and gender distribution (you can get local demographic data from census.gov)
  • Number of vehicles per family
  • Average monthly income and disposable income
  • Average annual spend on car wash service per household
  • Social group preferences and distribution
  • Inclination towards loyalty programs & free perks

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and the needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.

Download the Car Wash financial model template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

4. Sales & Marketing

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

  • What is your USP?
  • What are the different marketing strategies you will use?
  • How do you intend to track the success of your marketing strategy?
  • What is your CAC or customer acquisition cost?
  • What is your marketing budget?
  • What introductory promos and offers do you intend to provide for attracting new customers?

What marketing channels do car wash companies use?

A few marketing channels that car wash facilities typically use are:

  • Signage
  • PPC ads, Facebook ads, etc.
  • Print media
  • Direct ZIP code mailing
  • Innovative TV & radio ads
  • Loyalty programs
  • Word of mouth
  • Local listing
  • Cross promotion together with nearby local businesses

It is not necessary to use all channels. You can start by focusing on a few of them initially and expand later on.

Also, you must have a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing may lead to investors losing confidence.

Signage is undeniably the most important marketing tool for car wash companies

What are your Unique Selling Propositions (USPs)?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

  • Convenience: 24×7 automated car wash – no more rush hours
  • Price match: Find a lower price in 20-mile radius and we will match it
  • Freebies: Enjoy free Wi-Fi, TV, and coffee while you wait

Your USP will depend on your business model, competitor analysis, and target audience. Whatever your USPs are, it should appeal to your potential customers and attract them.

5. Management & People

You must address 2 things here:

  • The management team and their experience/track record
  • The organizational structure: different team members and who reports to whom?

Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your car wash business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the car wash facility you are proposing. If they have specialized training and education (such as car wash chemistry, equipment maintenance, equipment control, etc.), add that information.

Organization Structure

Even if you haven’t already hired a service manager, coordinators, sales & customer service, administrative assistant, receptionists, etc., you must provide a flowchart of the organizational structure defining the hierarchy of reporting.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your car wash is an attractive investment.

There should be 3 sections to your financial plan section:

  • Your historical financials (only if you already operate the business and have financial accounts to show)
  • The startup costs of your project (if you plan to start a new car wash business, or add a few car wash bays, etc.)
  • The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For an auto repair business, startup costs are all the expenses you incur before you open your shop and starting making sales. These expenses typically are:

  • Lease deposit or loan downpayment for the real estate
  • The car wash bay
  • Other car wash equipment

Assuming you do not buy the land and the building but decide to rent instead, it costs on average $50,000 to $150,000 depending on the type of car wash you operate. For more information on how much it costs to open and run a car wash, read our complete guide here.

Startup CostAmount
Car wash bay$42,000
Car wash equipment$8,000 – 100,000
Licenses$500-1,000
Total$50,000 – $150,000

Download the Car Wash financial model template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

c) Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model for your car wash.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

  • How much revenue do you expect to generate over the next 5 years?
  • When do you expect to break even?
  • How much cash will you burn until you get there?
  • What’s the impact of a change in pricing (say 15%) on your margins?
  • What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

  • The number of cars you service over time ;
  • Your expected revenue ;
  • Operating costs to run the business ;
  • Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

Source: Car wash financial model template

7. Funding Ask

This is the last section of the business plan of your car wash. Now that we have explained what type of car wash services your company would offer, at what price, your marketing strategy, management and people, this section must now answer the following questions:

  • How much funding do you need?
  • What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
  • How long will this funding last?
  • Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

If you raise equity

  • What percentage ownership are you selling as part of this funding round?
  • What is the corresponding valuation of your business?

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our car wash financial model template, you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

An example of a Funding ask slide (source)

Download the Car Wash financial model template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics