Most people think of selling products like online selling or setting up a food cart or restaurant when they think of starting their own business. Little do they know that a lot of the local mom and pop shop businesses that can be seen in our neighborhoods are just as, if not more, profitable.
One example is a car wash business. You would be surprised at how much money you can earn from this type of business if you manage to become successful.
In this article, we will dive into the world of car wash businesses. This is a great read if you are interested in starting your first business or even if you own other businesses already and are interested in entering a different industry.
Benefits of starting a car wash business
1. Low starting capital
Compared to other businesses, car washes don’t need a huge initial investment. You can lower your costs even more by creating your own brand instead of franchising an existing business.
2. Pandemic and recession-proof
Car washing and other related services are in-demand even during crises like pandemics and recessions.
People often rely on professionals to take care of their car’s maintenance, especially if they are busy themselves and would rather save their time and energy for other things.
3. High earning potential
While car washes don’t look very glamorous, they have very high earning potential and are profitable businesses.
Services you can offer in a car wash business
As you can probably tell, the main service that you will offer in this type of business is car washes. However, to attract more customers and increase income, you can offer a whole slew of car-related services. Some other services you can offer include car waxing services, detailing services, and drying services.
If you are knowledgeable about cars or partner with someone who is, you can even offer automotive services such as car and motorcycle repair, tire pumping or changing, oil change, car maintenance, air filter replacement, brake work, and battery replacement.
In the beginning, though, it might be a good idea to keep it simple and expand your services later on.
List of equipment you will need for a car wash
You will need some equipment in order to get your business up and running. Here is a list of some the equipment you will probably need to acquire:
- Pressure washer
- Vacuum cleaner with blower
- Pressure tank
- Storage drums for water
- Power sprayer
- Ladders
- Water hoses
- Pails and buckets
- Sponges
- Towels and all-purpose rags
- Car shampoo
- Car wax liquid
- Car polisher
- Scratch remover
How much will it cost to start a car wash business?
It’s a known fact that in order to make money, you have to spend money first. This rings true for practically any business idea you may have. Initial capital is a must, and you will most likely have to keep investing or reinvesting money into the business to keep it afloat before it becomes profitable.
To start a car wash business, you will need to shell out a minimum of Php 150,000 up to Php 200,000. This is just the initial cost, and you should expect to spend more money as you go along.
Some of the costs you need to take care of include:
- Car wash equipment and supplies
- Business location purchase or rent
- Labor and salaries
- Mandatory government benefits for employees
- Electricity bill
- Water bill
- Transportation
- Registration and permit fees
- Taxes
- Contingency costs
As a business owner, you need to make sure you have enough capital and that you stay under budget to keep your business running.
How much can you earn with a car wash business?
Your earnings will vary depending on how much you charge for your services, customer volume, and your expenses. Some months, like the rainy season, may also generate less business.
Based on estimates, you can earn a net income of more or less Php30,000 per month. This can be higher or lower depending on how you run your business.
How to start a car wash business
Starting a car wash business is almost like starting any other business. These are some of the steps you need to follow to set things up:
Step 1: Create a business plan.
Business ownership is not an easy feat and requires a lot of detailed planning. You can’t start a business without creating a strategic plan beforehand. Otherwise, you are setting yourself up for failure.
When you create your business plan, you need to take note of your expected initial costs and investment as well as the expected monthly expenses after that. You need to think about branding and your marketing strategy to attract customers to your shop.
Step 2: Choose a location for your business.
When it comes to physical stores and branches like a car wash business, location is key. It’s much better if you choose a location that garners a lot of foot traffic and is nearby other establishments.
Another possible strategy would be to set up your business in a less accessible location where you won’t have too much competition and can tap into a new market.
Step 3: Complete your business registration.
To set up your business, you will need various documents.
These are your business permit, mayor’s permit, Department of Trade and Industry (DTI) registration, Bureau of Internal Revenue (BIR) registration, barangay clearance, DOLE, SSS, Philhealth, and Pag-IBIG. The beginning stages require a lot of paperwork.
Step 4: Obtain equipment, materials, and supplies.
Next, you need to acquire the necessary equipment and tools for your car wash services. You can start canvassing suppliers even earlier so that once your paperwork is complete, all you have to do is place your orders.
Step 5: Hire employees for your business.
You may choose to hire full-time, part-time, or independent contractors.
With independent contractors, you are not required to pay their mandatory government benefits such as Philhealth and SSS, and you can offer them flexible hours. However, they can also leave your company at any time and can engage in other employment.
Step 6: Start promoting your business.
Now, it is time to promote your business and get your name out there.
You can try to do it organically through word-of-mouth or social media posts first, or you may also hire someone to come up with a marketing strategy for you. If you don’t have a large budget, relying on self-promotion would be a great starting point.
Conclusion
Business ventures are always risky even for tried-and-tested businesses like a car wash. However if you are savvy and business-minded, a car wash is a good option to earn more income.
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