From creating a business plan to acquiring funding, finding a location, and hiring reliable employees, starting a small business in any industry is a challenging endeavor. Unfortunately, it is so complex that approximately 20% of start-ups close within their first year, according to the Bureau of Labor Statistics (BLS).
Starting a car wash is no exception. It requires a high degree of planning, passion, and persistence, for which most new entrepreneurs are unprepared. To help you avoid becoming a statistic, Washify presents some of the most common mistakes new car wash owners make and the best ways to prevent them.
Choosing the Wrong Location
Selecting the ideal location for your new car wash business is one of the first and most important tasks you will face. It could make all the difference in the success or failure of your company. Some car wash owners make the mistake of choosing a location that is:
- Too close to another car wash business: Generally, you should look for a location that does not have another car wash nearby, so you are not competing for the same clientele.
- Zoned for other uses: If the lot you select is not zoned for commercial use or has restrictions limiting its use as a car wash, it may be difficult, if not impossible, to get it changed. So instead, focus your attention on locations that are already in business areas.
- In a low traffic area: Most car wash business comes from passersby who stop for a wash on impulse. Therefore, your revenue stream could suffer unless you choose a locale with a fair amount of traffic.
- Surrounded by fast-moving traffic: High traffic volume won’t help your business if the speed limit is too high and cars zip by without noticing you. It’s better to select a street with other companies and traffic lights to slow potential customers as they pass.
Operating as an Absentee Owner
It may be tempting to turn your new business over to a manager and let them handle the day-to-day operations, just dropping in occasionally or handling emergencies. However, this sort of “hands-off” approach is more likely to fail with a new business.
One reason for this disparity is that no manager will have the same passion for the success of your business as you do. Once your business opens, it is up to you to drive its success. You should plan to devote 100% of your time to the company at first until it is firmly up and running.
Hiring Too Many or Too Few Employees
The number of employees you need will depend on your wash’s efficiency, but every operation will require some on-staff workers. It is their job to make sure the equipment is working smoothly and the customers are happy.
Some car wash entrepreneurs make the mistake of hiring more workers than they need, which balloons payroll costs and drags down the bottom line. But, on the other hand, too few workers will almost certainly translate to a negative experience for customers and employees alike.
Although it is not always easy to find the right staffing balance, worker satisfaction and your company’s success may depend on your ability to do so.
Allowing Too Little Time for Permits and Rezoning
Residents often have misconceptions about what a car wash in their community will look like. They may picture a dirty or noisy operation that’ll be a disruption in their neighborhood.
As unfair and inaccurate as this perception might be, it can influence the city’s business permit and zoning decisions. As a result, requests to develop your business in your chosen location could be denied or delayed, forcing you to appeal, reapply, or choose a new site.
Car wash owners who don’t understand this dynamic may assume that their permit and rezoning applications will be approved quickly and easily. However, if approvals take weeks or even months longer than expected, these unexpected holdups can be costly to your business.
Therefore, set realistic timelines and be prepared with a plan B if they must be pushed back while you wait for permission to open.
Setting the Wrong Price Point
When a car wash outfit charges too much for its services, it risks losing business to other nearby companies. On the other hand, a price point that’s too low could mean losing money on each sale.
Deciding how much to charge requires careful market research and cost calculations. For example, you can add up how much each wash will cost you to predict your margins accurately. Be sure to include both variable and fixed costs.
Variable expenses, like cleaning products, equipment wear and tear, electricity, and water usage, are relatively easy to calculate on a per-car basis.
Fixed overhead costs, like labor, rent or mortgage, advertising, and landscaping, will need to be averaged and estimated based on your expected sales volume.
Find out how much your nearest rivals charge, and make sure your prices will be competitive. A good rule of thumb is to try and undercut the competition by approximately 10-20%.
Installing Unreliable Equipment
Equipment is the driving force behind a smooth car wash operation, and your hardware and software system must be dependable. Every breakdown means lost revenue while your wash is halted, and disgruntled customers may not return.
Although it is wise to look for value in new car wash equipment, owners shouldn’t make the mistake of purchasing inferior quality components that aren’t reliable. This decision might save money initially, but it could be disastrous in the long run.
Even if the price tag for high-quality equipment makes it seem unfeasible, there are often creative solutions to bring it within your reach. For example, you might be able to access car wash equipment financing or purchase good condition aftermarket parts at a fraction of the cost.
Propel Your Car Wash to Success with Washify
In addition to avoiding these six common mistakes, opening a successful car wash demands hard work, attention to detail, and a commitment to top-notch customer service.
To give your operation an even more significant advantage, integrate cloud-based management and point-of-sale software by Washify. Contact us today for a consultation and find out how we can help your car wash reach the next level.