The car wash business and the auto repair shop both belong to the automotive industry. Both are attractive business ventures for people who love cars and willing to roll up their sleeves to tinker with them. But which is the better business?
You have endured the humdrum of your 9 to 5 job just to save up for a business. Surely you would like to invest your hard-earned money to something that would provide you with a stable source of income once you decide to say goodbye to your current boss. And since you love cars, you are thinking of two options – a car wash business or an auto repair business.
You start weighing the odds. You want to know the pros and cons of each. Which is easier to manage? Which can give you a faster ROI? Which can provide you with an income that will support you and your family for years to come?
Car Wash Business and Auto Repair Business: A Comparison
The car wash or mobile car detailing business and the auto repair shop both belong to the automotive industry. Both are attractive business ventures for people who love cars and willing to roll up their sleeves to tinker with them. But which is the better business? Let us compare.
A car wash business needs an initial capital of $250,000 upwards. This amount takes into consideration the land, buildings, equipment and enough cash to tide you over until your business can stand on its own. An auto repair business, on the other hand, may require anywhere from $50,000 to 900,000 depending on the size, equipment, tools and location.
Both the full service car wash and the auto repair shop can have gross earnings of as much as $900,000. Yes, both can generate huge sales due to high customer demands. As surveys show, these businesses thrive well because car owners have become more caring of their cars to make them last longer. To this amount will be subtracted the materials, supplies, rentals, and other fees that the business needs. An auto shop has more expenses because the salaries of licensed mechanics are higher than the most experienced car wash worker. Not to mention that the auto shop has costlier supplies like paint, sealants, etc.
Business Permits and Licenses
Both businesses require different types of permits and licenses from the state as well as from the Environmental Protection Agency due to the hazards that their wastes can produce. Below is a list of requirements for both businesses:
A car wash business needs the following:
1. Local business permits
2. License fee
3. Environmental and safety inspections (depending on your state)
4. Zoning variances
5. Federal tax identification number
6. State tax registration certificate
7. Employer Identification Number from the Internal Revenue Service if you are looking into hiring workers
Meanwhile, an auto repair business needs the following:
1. Seller’s permit number/ tax ID number
2. License fee
3. County business tax receipt
4. City business tax receipt (if applicable)
5. Hazardous material license or exemption letter
6. Garage liability and garage keeper’s legal liability certificates of insurance
7. Hazardous waste manifest (within 6 months)
8. Corporation or fictitious name documents
9. Certified technician application
One downside to owning a car wash business is its susceptibility to weather conditions. Operations are affected and may even come to a halt during stormy and snowy days since customers know that car washing will be a waste of their time and money. An auto repair shop is not affected by such weather conditions.
Car washing is an easy skill that can be taught in just a few hours. You are not required to present a license or permit for your workers. Nevertheless, you should train them well for your customers’ satisfaction. Auto repair, on the other hand, involves a lot of technical and meticulous details that may take several months, even years to master. It is also important to note that all states require your auto repair technicians to present their licenses. This license can only be obtained after taking a written examination or renewing an already existing one.
One advantage of owning a car wash business over an auto repair business is the option to go mobile. You can purchase a hybrid vehicle and equip it with the necessary tools, auto detailing supplies and head off to wherever your customer is.
We have presented the options to make it easier for you to decide which business to invest on. Now, if you wish to start a car wash business, but is still in doubt about the details, why don’t you consider a DetailXPerts franchise? You will greatly benefit from our industry knowledge and business expertise.
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