How To Start A Car Wash Business Without Going BANKRUPT

Updated On: September 20, 2022

Many people might be hesitant to start a business after the way the economy has been seeing many downturns, but car washes are one business that is easy to set up and can bring you lots of revenue. Plus, it's something your community will definitely appreciate.

You don't need special skills or knowledge to start a car wash – just some basic knowledge about cars and how to operate a pressure washer.

Also, after this guide and with our guidance, you will hopefully know how to start a car wash business

Looking For More Business Options? Check out these business ideas.

What is a Car wash

Start A Car Wash Business

A car wash is a service that cleans the exterior and interior of a vehicle. There are several types of car washes, including full-service, automatic, and self-service.

  • Self-service: Self-service car washes require the customer to do most of the work. You pay a fee, and equipment to clean your car is provided
  • Automated: This is where cars go into a machine or line where a machine does all the cleaning work. These carwashes provide an outstanding experience if you are inside the vehicle.
  • Full-service car wash: These locations provide both exterior and interior detailing services. Full-service car wash might have a combination of machines and hand labor, but you or your employees do most of the work by hand

Many car washes are profitable because they require a small initial investment and can generate a steady stream of customers.

In addition, many people are willing to pay for the convenience of cleaning their car without having to do it themselves. For these reasons, car washes can be a profitable business for entrepreneurs looking for a way to generate income.

How Much Can A Carwash Make?

How much money a car wash business can make depends on the location and type of car wash you want to start.

For example, Brandongaille, in a 2017 survey, found out that automatic car wash could have revenue of around 140,000 dollars a year with an average of 20,000 customers a year. Most likely, this has increased in the last five years.

It also depends also on the competition. In other words, it is not the same opening a carwash business in California, where it is overcrowded, as in Ohio, where there could be more opportunities.

Step-by-Step Instructions To Open A Car Wash 

Let's explore some of the main steps to start a carwash business without getting into trouble or going bankrupt. 

In most cases, this set of steps will make your chances of succeeding a lot higher

  • Research for a suitable location
  • Ensure you have all the necessary permits and licenses
  • Create a business plan and funding strategy. 
  • Purchase or lease the required property and equipment.
  • Market your carwash to potential customers. 
  • Train your staff on how to operate the carwash equipment.
  • Manage and monitor your KPIs

So, down to business. Let's dive right into what you are here for.

Step 1: Research the area around your potential spot. Location is Everything

If you're thinking about being an entrepreneur of a car wash business, location is one of the most important things to consider. The wrong location can mean low traffic, high overhead costs, and little chance for success.

On the other hand, the right area can mean a thriving business with plenty of customers. So, how do you pick the location for your car wash?

Consider traffic of vehicles

You need a spot that gets a lot of foot traffic as well as vehicle traffic. An excellent way to assess traffic is to do some research on the demographics of the area. 

It will help if you estimate how many people live nearby, their income levels, and what kinds of transportation they use. You can also talk to businesses in the area to get an idea of how much foot traffic they receive daily.


Another critical factor to consider is competition. Are there many car wash businesses in the area? It might be tough to compete.

On the other hand, if there are very few car wash businesses or none at all, that could be a good sign that there's room for another business. In either case, it's essential to research and find out as much as possible about the competition.

Rent or associated costs

Finally, it's crucial that you consider the cost of starting and running a car wash business in the chosen location. 

In addition, consider rent or mortgage payments. You'll need to factor in equipment, supplies, utilities, and labor costs. By understanding all the costs associated with starting a car wash, you can better assess whether or not a particular location is feasible for your business.

If you're leasing the property, make sure to negotiate a lease that is favorable to your business. For example, you may want to negotiate a lower rent in exchange for a longer lease term.

Step 2: Ensure you have all the necessary permits and licenses. 

When starting a car wash business, it's essential to make sure that you have all the necessary permits and licenses in place. Knowing what permits to get based on location is key in your journey of learning how to start a car wash business.

Also, we know that you will need a taxing number to pay business taxes.

The number of permits you need may vary depending on your location, so check with your local authorities. We recommend you do your due diligence to find the ones you need in your state before starting your car wash.

Typically, you'll need a business license, a permit for any signage, and a permit to operate the car wash business itself. 

You may also need to obtain liability insurance. By getting all the necessary permits and licenses before you open your car wash, you'll be able to avoid any legal problems down the road.

Choose a site that is accessible and visible to customers

One important thing to consider when choosing a location for your car wash business is accessibility. 

Besides being on a busy street or a neighbor with many cars, your site should be accessible for customers to find and reach, whether driving or walking.  It should also be visible from the street, so potential customers will know it's there.

In addition, the site should have enough space for customers to park their cars and enough room for the car wash equipment. By choosing a location accessible and visible to customers, you'll be more likely to attract business.

Decide on the type of carwash you want to open - manual or automatic.

You'll need to decide on the type of business you want to run. as we said at the beginning, you could choose between self-service, automated or Full-service car wash: 

Manual car wash businesses require customers to drive their cars into a bay where they will be washed by hand. Full-service car wash businesses are usually less expensive for customers, but they need more labor from you or your employees.

On the other hand, an automatic car wash business is fully automated and doesn't require customer interaction. Customers drive their cars into the wash, and the machine does all the work.

These types of washes are typically more expensive for customers, but they require less labor on your part.

When deciding on the type of car wash business you want to open, consider your budget, the amount of space you have available, and the level of customer service you wish to provide.

Step 3: Create a car wash business plan and funding strategy. 

A business plan will help you determine how much money you will need to start your business and sustain it over time. Any successful business needs a comprehensive plan that sets its goals and outlines the steps necessary to achieve them. 

A car wash business plan is vital for a car wash, a capital-intensive business with a wide range of potential risks and pitfalls.

Before opening a car wash, it is essential to put together a business plan that covers all the bases, from the initial investment required to the ongoing costs of running the business. 

Your plan should also include a detailed funding strategy considering the financing sources required, such as bank loans, private investments, or government grants. Remember to have a separate business bank account for your business. It is important to keep business and personal finances separate.

A well-thought-out business plan and funding strategy are essential for any business, but it is especially critical for a car wash. 

With the high investment cost and the many potential risks involved, a car wash needs to be run like a well-oiled machine to succeed. By creating a comprehensive plan and securing the necessary upfront funding, you can increase your chances of opening a successful car wash and avoid many of the common pitfalls of this type of business.

Step 4: Purchase or lease the necessary property and equipment.

Once you've chosen a location and decided on the type of car wash you want to open, you'll need to purchase or lease the necessary property and equipment.

Equipment may include an automatic car wash soap system, hoses, pressure washers, and signs. Invest in high-quality car wash equipment.

Another important consideration when starting a car wash business is your needed equipment. There are a variety of car wash machines available on the market, ranging from simple hand-held units to complex automated systems.

When choosing equipment, investing in quality equipment is essential because you will be grateful in the long run.

Step 5: Market your carwash to potential customers.

Use online directories, classifieds, and social media to get the word out. I recommend you to write a blog to increase local search traffic.

Now that you've got everything set up, it's time to start marketing your car wash business to potential customers. You could do this in several ways, including online directories, classifieds, and social media.

If you're opening a new carwash, you'll want to market it effectively to potential customers. There are a few key things to keep in mind when crafting your marketing strategy. First, you'll need to identify your target audience. Are you catering to busy professionals who don't have time to wash their own cars? Or are you targeting families who are looking for a fun weekend activity? 

Once you know your target market, you can begin developing your marketing strategy.You'll need to create compelling advertising that will reach your target audience and convince them to give your carwash a try.

You can also offer special deals or coupons for first-time customers. In addition, word-of-mouth can be a powerful marketing tool, so make sure your carwash provides an exceptional experience that customers will want to tell their friends.

I, for example, would highly recommend getting a webpage and writing a blog. Having a web page will help you, in the long run, to generate organic traffic and potential customers without having to pay for advertisements. 

By adding your business to google maps, you will also appear in the google search when somebody nearby is searching for "car wash."

Step 6: Train your staff on how to operate the carwash equipment.

Training your staff on how to operate the carwash equipment properly is essential for ensuring high customer satisfaction. The correct equipment handling is vital for ensuring that customers have a positive experience and that their cars are cleaned as expected.

You can find training manuals and videos on the web, or you can hire a professional trainer to come to your business and teach your staff the proper way to use the equipment.

By taking the time to teach your employees the proper techniques for operating the machinery, you can help to reduce the risk of damage to vehicles and improve the overall quality of the carwashing experience.

Furthermore, well-trained staff will be able to work more efficiently, which can help to increase your profits. 

A few key things you should focus on when training your staff on how to operate the carwash equipment:

  • Teach them how to set up the equipment before each wash correctly.
  • Show them how to attach hoses and other attachments properly.
  • Explain the importance of using gentle, circular motions when washing cars.
  • Emphasize the need to avoid scratching or damaging vehicles

Training your staff properly can help ensure that your customers have a positive experience at your car wash business.

Step 7: Manage and monitor your KPIs. Financial tracking, staff management, and customer service.

Regularly monitoring and managing your carwash business operations is key to success. Your primary KPIs should include financial tracking, staff management, and customer service.

By keeping on top of these aspects of your business, you can identify problems early and make corrections before they become more significant issues.

For example, if you notice that your sales are starting to decline, you can take steps to attract new customers or improve your marketing efforts.

Similarly, if you notice that employee morale is low, you can take action to improve working conditions or implement new training programs. By staying on top of all aspects of your business, you can keep your carwash running smoothly and ensure it continues to be successful.

Key Considerations When Starting A Successful Car Wash Business

Now that you know the main steps to successfully open a car wash business in the 2020s, it's time to take action.

Taking it to the Next Level: How to differentiate your car wash business

Even though a car is a brick-and-mortar business, you still have to step up your game to beat up the competition. To differentiate yourself from other car washes, you can:

  • Be active on social media
  • Launch your website
  • Have a loyalty program
  • Network with other businesses

Alternatives ways to open a car wash faster

Another way to open a car wash business without much hassle but with a more upfront cost is by signing up for a car wash franchise. 

By being a part of a car wash franchise, you'll be able to piggyback off of the success of an already-established brand.  Signing up with a franchise can help you build a loyal customer base and generate profits more quickly than if you were starting your business from scratch.

However, it's important to note that franchising comes with its own set of challenges and costs. 

For example, you'll have to pay the franchisor an initial franchise fee and ongoing royalties. You'll also be required to adhere to the franchisor's guidelines and may have less autonomy than if you were running your own business.

Despite these challenges, franchising can be a good option for those who want to get started in the car wash business industry with minimal risk and hassle.

Wrapping Up and My Experience With Car Wash Businesses

I don't own a car wash business just yet, but I have been playing with the idea for a few months already and have done a lot of research that I tried to put into words.

I would probably start looking for investors or loans to start a car wash business soon. If I do, you will be the first to know.


How do car washes calculate profit?

The car wash industry calculates the profit by subtracting the business's total costs from the total revenue generated. Total prices can include things like the cost of supplies, labor, and rent.

What are some common challenges that car washes face?

Car washes face common challenges, including finding a prime location, attracting and retaining customers, and managing costs. Also, some people fail to create a car wash business plan which harms the probability of succeding.

Is a car wash a good business to own?

A car wash business can be an excellent business to own if it is appropriately managed and located in a prime location. One of the key things to success is attracting and retaining customers.

How much does it cost to open a car wash?

One of the main expenses you will incur when starting a car wash is purchasing or leasing the necessary equipment.  Carwash costs can include washing machines, vacuums, and drying equipment.

Another considerable expense is the cost of hiring employees. Finally, you will need to consider including rent, utilities, and supplies.

It is hard to average how much the start-up costs, but it could be between $20,000 to $80,000, depending on how big you plan to start.

Wrapping Up

So now that you know how to start your own car wash business and do the market research, it's time to start.

Make sure you work hard daily and partner with small business owners at commercial office spots.

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About the Author

Colin Shipp is a marketer who has been working remotely full-time since 2015. He specializes in growth marketing, content marketing, online courses, and remote work. On he writes about strategies he is using in his own life.