How to Start a Car Wash

Some people are naturally attracted to this business. They like to see clean cars and they like working to make cars look clean. A Car Wash can be a rewarding and profitable business that with enough effort and knowledge, anyone can learn how to run one.

Learn how to start your own Car Wash and whether it is the right fit for you.

Start a car wash by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your car wash. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening a car wash?

The costs involved in starting this business depend on the level you want to operate.

Level One – Hand Car Washing

Anyone who can afford a few hundred dollars can start at this level. You will need:

  • A water supply (monthly cost is $20+)
  • Buckets - $10 each
  • Soap - $20
  • Sponges - $10
  • Window Squeegees - $10 each
  • Chamois - $10 each
  • Industrial Wet/Dry Vacuum - $100
  • Promotional Flyers - $50
  • Signage - $75
  • Shade Cover - $150

Level Two – Self-Service Car Wash

This type of operation requires a significant investment of up to $200,000 or more depending on the location. You will need:

  • Self-Service Car Wash Equipment - $50,000
  • Car Wash Shed Building - $100,000
  • Lease Payment and Deposits - Allow $5 per square foot. For example, a 1,000 square feet facility would typically require $5,000 per month rent and a $10,000 security deposit.
  • Signage - $2,500

Level Three – Car Detailing

Some automatic car washes and touchless car washes offer car detailing as an enhanced service. However, it is also possible to operate a car detailing business independently and do all the work by hand. The startup investment for an independent car detailing business is similar to a hand-washing business, except because you will offer more services you will need additional supplies and perhaps helpers. You will need:

  • A water supply (monthly cost is $20+)
  • Buckets - $10 each
  • Soap - $20
  • Car Wax - $25
  • Water Repellant - $35
  • Armor All - $50 (used for treatment of tires and other surfaces)
  • Window Cleaner - $25
  • Leather Restorer - $30
  • Air Freshener - $20
  • Chrome Polish -$25
  • WD-40- $50
  • Sponges - $10
  • Window Squeegees - $10 each
  • Chamois - $10 each
  • Industrial Wet/Dry Vacuum - $100
  • Pressure-Wash Cleaning Equipment - $500 (used to clean the engines and undercarriages)
  • Promotional Flyers - $50
  • Signage - $75
  • Shade Cover - $150

Level Four – Automatic Car Wash

This type of operation requires a significant investment of up to $500,000. It is a much bigger facility than a self-service car wash. You will need:

  • Automatic Car Washing Equipment - $250,000
  • Car Wash Building Construction - $200,000
  • Lease Payment and Deposits - Allow $5 per square foot. For example, a 5,000 square feet facility would typically require $25,000 per month rent and a $50,000 security deposit.
  • Signage - $5,000

Level Five – Touchless Washing

This is the highest level of car washing that uses automated equipment with lots of hands-on workers. Luxury vehicle owners are especially attracted to this type of car wash because nothing except human hands and soft clothes touches the car. These facilities can easily cost up to $1 million or more to start and many find it easier to buy an existing one rather than create a new one. You will need:

  • Touchless Car Washing Equipment - $250,000
  • Car Wash Building Construction - $500,000
  • Lease Payment and Deposits - Allow $5 per square foot. For example, a 15,000 square feet facility would typically require $45,000 per month rent and a $90,000 security deposit.
  • Signage - $25,000

If you are going to open a commercial car wash you will need to make a significant investment in the equipment needed to operate the car wash. The best places to have a commercial car wash are on very heavily used streets with lots of auto traffic passing by. This means the rent will be a very substantial expense.

Car washes need to have plenty of space for the cars to pass through the washing system and for them to be parked while they are being dried by hand to make each car ready. Typical car wash lots are at least 5,000 to 10,000 square feet and rent for a minimum of $10,000 to $50,000 per month. To be really successful operating a commercial car wash, you will need to do at least 100 cars per day at an average profit of $10 each per car.

What are the ongoing expenses for a car wash?

Water is really expensive, especially in places like California where the water is in short supply. Reclaiming water is important. This requires capturing the water and pumping it through a filtration system to clean it before it is used again.

Automatic car washes use a lot of electricity as well. Labor is paid at the minimum wage because the workers also get tips.

Level One – Hand Car Washing

The expenses depend on the number of cars you wash per month.

To wash about 50 cars your monthly expenses will be:

  • Water - $20+
  • Soap - $15
  • Replace worn out sponges/equipment - $25 to $50
  • Flyers - $50

Level Two – Self-Service Car Wash

Your expenses will be water, supplies, electricity, rent, and the cost of maintenance of the equipment. This averages in total to be about $5,000 to $7,000 per month.

Level Three – Car Detailing

If you work independently your expenses will be similar to hand washing of about $135 per month, except you need to allow for additional supplies of $150 per month. You may have to pay a commission and/or a fee to have an association with another business.

Level Four and Five – Automatic and Touchless Car Wash

Your monthly expenses for this type of operation will include the following:

  • Rent - $10,000 to $25,000 per month
  • Labor- $5,000 to $12,000 per month
  • Water - $2,000 to $3,000 per month (depending on the part of USA)
  • Supplies - $2,500 per month
  • Electricity - $3,000 to $5,000 per month

Who is the target market?

The best customers are the ones that return weekly to get a car wash. Many car wash companies give a free wash after a certain number of washes to get customers to come back again and again.

How does a car wash make money?

Each car wash has a basic charge and there are typically additional things that can be requested by clients, such as using auto freshener or wax that are sold for an additional charge. Detailing is the most expensive because of all the additional services provided.

How much can you charge customers?

The average price for a simple hand car wash is $5 to $7. For self-service systems, the charge is usually $1 to $2 for a 15-minute use of the washing equipment. Vacuum charges are about the same. The average customer might spend $2 to $4.

For automatic car wash systems, the average charge is $10. Most customers like to add some extras and can pay as much as $15 for a wash with the extras of interior cleaning, freshener, tire treatment, and the application of car wax.

Touchless wash is about $20 per car and with some extras added on the charge can go up to about $30 per car. Car detailing is the most expensive and the customers pay about $50 to $150 per car.

How much profit can a car wash make?

Level One – Hand Car Washing

  • About $7 per car

Level Two – Self-Service Car Wash

  • About $3 per car

Level Three – Car Detailing

  • About $50 to $75 per car

Level Four – Automatic Car Wash

  • About $10 to $15 per car

Level Five – Touchless Car Wash

  • About $12 to $18 per car

An automatic car wash operating at 100 cars per day at the average price of $10 per car will make $1,000 in gross profits per day. Labor will cost about $60 per hour so for an eight-hour shift that is $480 plus $120 more for employment taxes paid by the employer. Electricity will be about $200 per day and water about $75 per day and supplies about $25 per day. Insurance will cost $2,000 to $3,000 per month. Taking these expenses into consideration gross profits per day would be about $220 per day.

The owner of a modestly successful commercial car was would make around $6,600 per month in profits after paying all the expenses. In really busy areas, it is possible to make up to ten times this amount.

How can you make your business more profitable?

Level One – Hand Car Washing

  • Also advance from simple hand-washing to offer car detailing as well.

Level Two – Self-Service Car Wash

  • Open in multiple locations and create brand awareness.

Level Three – Car Detailing

  • Contract for providing service to customers of high-end luxury hotels and luxury auto dealerships.

Level Four and Five – Automatic and Touchless Car Wash

  • There is an excellent opportunity to sell additional items to clients who are waiting for their car wash to be finished. One terrific and very successful idea is to have a drop-off dry cleaning and laundry service associated with a car wash.
  • Offering fast food is another revenue source. The typical car wash customer, using an automatic or touchless car wash, is waiting for about 15 minutes at a minimum for their car to be washed. This is an excellent time to sell them other things.
  • Making deals with auto dealerships to wash cars at night is a great way to make extra money. Typically, the public is not looking for a car wash at night. However, car companies and auto rental places need to have cars washed at all times of the day and night. This is a great deal to seek for extra income if there are such dealerships and car rental places nearby.

What will you name your business?

Choosing the right name is very important. If you don’t have a name in mind already, read our detailed guide on how to name a business or get some help brainstorming a name with our Car Wash Business Name Generator.

Then, when registering a business name we recommend checking if the business name is available in your state, federally by doing a trademark search, searching the web, and making sure the name you choose is available as a web domain to secure it early so no one else can take it.

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After registering a domain name, consider setting up a professional email account ( Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your car wash is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

Check out the Top Business Formation Services from our friends at StartupSavant.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

A cube with LLC printed on its sides

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In accordance with the Clean Water Act of 1972, car washes must obtain a wastewater permit from the NPDES. A list of state specific regulations can be found here.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:

Labor Safety Requirements

It is important to comply with all Occupational Safety and Health Administration requirements.

Relevant regulations include:

  • Appropriate hazard identification
  • Injury reports
  • Proper safety precautions when operating potentially dangerous equipment

Certificate of Occupancy

A car wash is generally run out of a physical location. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a car wash business.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for you business’ location to ensure your car wash business will be in compliance and able to obtain a CO.

STEP 7: Get Business Insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Recommended: Learn what business insurance for your Car Wash will cost.

Business Insurance for
Car Wash

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How to promote & market a car wash

Level One – Hand Car Washing

Your best promotion will be receiving positive word-of-mouth referrals from existing customers. Giving them a discount card to hand out to their friends and business associates is a really good idea. Distributing flyers in the local area and walking around to do a “meet and greet” with local residents and businesses is an excellent way to find new customers. Offering to collaborate with another business such as a restaurant or a parking lot is another way to create new business.

Level Two – Self-Service Car Wash

Staying open 24-hours with bright signage when located on a busy thoroughfare is the best way to attract business to this kind of operation. People are attracted to use these services by seeing them when they drive by.

Level Three – Car Detailing

For this type of business, you will be looking for customers that have luxury vehicles. One excellent way to promote your services is to create an affiliation with a five-star hotel and offer the car detailing to guests. You will make their cars look perfect overnight and ready the next day as sparkling clean.

Level Four and Five – Automatic and Touchless Car Wash

These businesses use different equipment; however, the promotional methods are the same.

How to keep customers coming back

Asking existing customers to spread the word about your services by giving them a discount coupon to give to their friends is an effective marketing method. Register the discount cards, which are numbered, to the person you give them to. If someone uses the numbered discount coupon, the registered person gets a free wash.

Loyalty programs work very well. Issuing a reward card for the number of washes and giving a free wash after a certain number of paid washes is a terrific way to keep customers loyal. Giving rewards to customers that come back for repeat business is a really good idea.

In dirty environments, such as big metropolitan cities or winter road conditions that throw destructive salt up to the undercarriage, a car wash is needed about once per week. This means that a single customer that returns once per week for a year will be a very valuable customer.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Car Wash In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

Let us share a real-life story about a man who came to America as a refugee from Myanmar. He was a fairly wealthy businessman in Myanmar and became successful selling the delicacy of bird eggs. The government got jealous of his success and literally took his business from him. He left Myanmar with almost nothing.

When he arrived in the USA, he took a job as a dishwasher at a fancy restaurant. He could not even speak English, but he washed the dishes so well the owner was very impressed. On a lark, the owner, using sign language, showed him the owner’s car and asked him to wash it.

Because the man was previously wealthy in Myanmar and he had a nice car there, which is an incredible luxury for a person in such a poor country, he took very good care of it. In the past, he washed his own car so well and when asked to wash the restaurant owner’s car he washed it with the same enthusiasm. The results were spectacular and the owner was very happy.

In this fine restaurant, the customers would drive up and give the keys to the valet to park their car. Normally they would stay having dinner for two or three hours. This man from Myanmar asked the owner using sign language if he could wash the customer’s cars.

The restaurant owner immediately recognized the opportunity to make his customers so impressed. They could have a dinner and have a hand car wash done while they were eating. He immediately set up the special offer to give a free car wash for the diners. He also took the man from Myanmar off of washing dishes and told him to concentrate on washing the cars of the customers.

Of course, the customers paid a nice tip to the valet for parking the car and paid an even better tip for a perfectly clean and washed car. The man from Myanmar got to share in the tips and the restaurant became even more popular. The reason for telling this story is the only real requirement that you need to enter this business is to love washing cars.

By the way, the man from Myanmar is a real man. He went on to learn English and built up his efforts to wash cars. He now owns two professional car washes in California and he became a multi-millionaire from this effort. His name is Mr. Tan and his car washes are named after him. It all starts with loving to wash cars. You can do this also if you like to make cars look great!

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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What happens during a typical day at a car wash?

Get the supplies. Turn the water on. Get the equipment ready and make sure the helpers show up. If you need inspiration play this song, Car Wash.

Level One – Hand Car Washing

  • You will want to make sure you will have some cars to wash. The way to get customers is to locate on a busy street or have an affiliation with other businesses. You may spend some daily time looking for other opportunities to find cars to wash.
  • You will check to make sure there are enough supplies. You will make sure the water connection is working. If you have helpers. you will supervise their efforts.

Level Two – Self-Service Car Wash

  • Each day you will need to make sure all the equipment is functioning properly and there are enough soap and wax supplies to feed the systems. You will remove the coins from the coin boxes to collect the money made from the day before. You will fill the bill changer with coins to make sure the customers can get the change they need to use the system. You will make sure the facilities are clean and attractive to potential customers.

Level Three – Car Detailing

  • This can be either an independent business or operated in association with a professional car wash. Car detailing includes not only washing and waxing the car but also bringing the interior back to pristine condition. The main thing you will do each day is to make sure you have enough supplies and if you use helpers you will make sure they show up on time to take care of the clients.

Level Four – Automatic Washing

  • These systems are the most common form of car washing. The simple ones will be offered as part of a gas station. Your daily duties will be to check that the equipment is working properly and replace any worn out parts, such as brushes, with new ones. You will check to make sure there are adequate supplies that are needed for the operations such as soap and liquid wax.
  • If payment can be made by coins or bills at the entry point, you will remove money from the collection device for deposit to the bank.

Level Five – Touchless Washing

  • Touchless washing combines an automated system to do the rough washing with many employees to do the final cleaning. Besides checking the equipment for proper operation and making sure you have enough supplies, the main part of your job is to make sure there is enough staff on hand to help process all the cars that come through. A successful system may wash 200 to 300 cars per day.

What are some skills and experiences that will help you build a successful car wash?

Being a gregarious person helps when looking for customers for hand-washing or detailing services. For self-serve, automated, and touchless car washes, it is important to pick a very good location with lots of automobiles that pass by. Make sure your washing services are excellent and the customers feel very happy with the results. Give them all a little extra bit of attention and they will tell their friends.

What is the growth potential for a car wash?

Since getting a car wash is a matter of convenience, there is the possibility of having multiple locations served by a hand-wash company or a detailing company. For self-service, automatic, and touchless car washes, it is possible to have one on any major thoroughfare and even add other locations after the first location is successful.

Having the locations a few miles apart will help to make sure you do not cannibalize your own market.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

Level One – Hand Car Washing

You can start all by yourself and then add helpers if you get more cars to wash.

Level Two – Self-Service Car Wash

This type of car wash does not require a permanent staff. You will only need maintenance people to repair broken equipment when necessary. You may want to hire a part-time worker to sweep up and clean the place once or twice per week if you do not want to do this work yourself.

Level Three – Car Detailing

Just like hand washing you can start as a sole owner/operator. However; most of these businesses have at least three people to process the cars more rapidly. Two work the outside of the cars and one works on the inside. Depending on the volume of cars washed, you will add new three-person teams to handle the additional workflow.

Level Four and Five – Automatic and Touchless Car Wash

An automatic commercial car wash needs to have at least six people to operate properly if it is a busy car wash. Laborers get minimum wage plus tips. Workers are pretty easy to find. Students are a good source for workers, so recruiting for part-time workers from a nearby college campus is a good idea. Because a touchless car wash uses more workers, you will need to have at least 12 and maybe more. Adding more staff depends on the volume of daily car washes.

Next Steps

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