Before taking the leap into your own car wash venture, make sure that you have done enough research to help gauge whether the car wash industry is a right fit for your goals as an entrepreneur. Knowing the average cost to build a car wash is one of the most crucial things to look into. Learn about the initial capital outlay required and plan around it so you won’t end up spending too much or borrowing too much money.
The total cost to build a car wash will depend on the type of car wash business you want to set up. Some types will require you to invest resources on a particular detail of the business while letting you save on other factors. Below is a list of the factors to consider in computing for the average cost to build a car wash business and how the cost for each type of car wash differs.
To understand the expenses involved in putting up a car wash, you need to be aware of the following factors:
Where you’ll build your car wash structure is one of the critical decisions you’ll have to make in starting up. You’ll have to take into account if the area is accessible to your target market and if the neighborhood is safe and secure. The space required for one bay of an in-bay automatic car wash is around 7,000 square feet. A self-serve bay where car owners can wash the exterior and vacuum the interior of their cars themselves will need around 2,000 square feet of space. For a full-service car wash, you should allocate land to build structures where your customers can wait or shop while they wait for their car to be cleaned. Land acquisition costs won’t be necessary for mobile detailing businesses since they operate where their customers’ cars are.
You have the option of building from scratch, buying an existing car wash structure or renting a car wash building. In general, land acquisition costs are estimated at $100,000-$200,000. Site work that includes building the foundation and landscaping costs around $200,000-$300,0000 while building construction (including electrical and plumbing) is at $350,000-$500,000.
Some of the required paperwork and professional fees that you need to pay for are: architectural fees, engineering fees, studies and appraisals (e.g. impact, traffic), construction permit, business license, and environmental and safety permit. The total cost of permits and licenses is $150-$200 on average. Including professional fees, the total can go up to $50,000-$150,000.
Environmental laws have required car wash facilities to have an integrated system to collect wastewater and process the contaminants so the water can be reused. The more contaminants in the wastewater (depends on how harsh the detailing products are and the number and type of vehicles washed daily), the more you’ll spend on your wastewater recycling. A closed-loop system that can restore water for reuse right in the car wash facility costs from $35,000-$100,000.
Different types of car wash systems need different equipment. Self-serve car wash equipment cost $8,000-$10,000 per bay while for automatic units, it can go as high as #31,000-$49,000 per bay. Make sure to do a canvass of equipment costs with your local distributors so you can compare prices for the equipment and the brand you want. You may also want to consider buying used car wash equipment for lesser cost or getting them on consignment. For mobile detailing businesses, allocate funds for the service vehicle large enough to carry all your equipment. You may consider buying a used van for $3,000-$5,000.
You should protect your business from potential risks and accidents that will cost you money. Types of insurance coverage that are recommended for car wash businesses are those that cover general liability, professional liability, and commercial property. You’ll need to prepare at least $500 up to $15,000 for insurance coverage alone. It will help to research on what specific insurance coverage you will need for your business and for your team.
As a new business, you’ll want to put word out to attract potential customers. Advertising campaigns can cost $2,000-$5,000 on the average. Signage costs roughly $15,000-$25,000. Your campaign can be as lavish as you want, but do not underestimate the impact of less costly alternatives such as social media, texting program, flyers and setting up a loyalty program.
Out of all the types of car wash businesses, mobile detailing will cost the least at startup because it saves on money needed to purchase/rent land and to develop a car wash establishment. You can start mobile detailing for as low as $15,000 on an estimate. An estimated cost for the other types of car wash systems is $500,000-$1,400,000 (including land and construction costs), depending on the factors mentioned above. To further cut down on startup costs, consider getting a car wash franchise. Through franchising, you’ll save on a number of expenses that will be covered by the franchise package (e.g. marketing, construction assistance, etc.) while banking on an established brand and business model.