Car Washes as a Business Model

Question

I’m thinking about trying to raise $500K to build a car wash.  What do you think about car washes?  Is that a good business to go into?

Answer

I am not very enthusiastic about any kind of business model where you have to sink a lot of money into highly-specialized assets and then wait for enough customers to stop by if the fancy strikes them in order for you to break even for that day, week or month on your relatively high fix costs created by the expensive land and equipment you purchased.  It puts you into a relatively passive sales and marketing position where you are waiting on customers rather than going out and selling them and those highly-specialized assets cannot be repurposed for any other use, nor easily liquidated to get anything more than mere salvage value once purchased and put in place.

 

Also, the fact that you plan on “raising” the money necessary to buy the land and equipment suggests you would have to put yourself into a bondage position -- either to lenders in the form of debt bondage or to investors in the form of venture capital bondage.

 

If you really feel that God is calling you to wash vehicles, then there are more creative ways to do that without the risk or bondage of a typical car wash model.  Consider the following business models:

  • Take a cue from some of the more entrepreneurial inner city entrepreneurs and go to a large expensive office building parking lot in time to catch the morning traffic and offer to wash their cars while they work and bring them their keys to their offices when you are finished.  Your asset investment is little more than a few hoses, buckets, brushes and soap.  For a cross-sell, you can offer to detail their car for them, change their oil or drop off their car at a repair shop for them and bring it back again.  You are now acquiring customers with convenient services for their cars (think “car concierge”) rather than only performing one service that many of them are in too much of a hurry to stop and take advantage of.  Once you are in the position of getting to know them and their cars, you can offer a host of other services from warranty repair reminders, service reminders, etc.
  • Take your act on the road:
    • I had a knock on my door last Saturday from a man that was driving through my neighborhood and noticed a dent in the fender of one of my cars.  After a brief sales pitch on his low-cost dent repair service, he drove away an hour later $200 richer.  His only investment was a few simple body shop dent pullers, putty, hammers and sand paper.
    • Another successful entrepreneur I know bought a power washing unit and mounted it on a flatbed truck and sells his power washing service to truck fleets.  The benefit for the trucking firms is that their drivers never waste a second washing the trucks and the trucks are always clean as they drive the highways and byways as a billboard that reflects well on the company.  For the entrepreneur, he gets a fixed fee per truck and can drive up and down the fleet parking lot in off hours and wash truck after truck for his recurring customers.  Most of them hire him to come once per week to wash all of their trucks.  His asset costs are much lower than a regular truck wash (less than $20K) and he was able to easily grow his business to a number of trucks and crews that service his large and growing base of recurring customers while he works at his home office, collects the large checks from his customers, directs his crews and shepherds his family.

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