How to Start a Car Wash Business in 9 Simple Steps

Car wash owners can make tens or even hundreds of thousands of dollars in profit per year. Exactly how much you can make will depend on a number of factors, such as:

• The type of service you provide: Car washes are more diverse than many people realize. For instance, they may include both exterior and interior cleaning. A basic rinse will cost less than a deep cleaning service.
• The size and type of vehicle: Sedans will usually be cheaper to clean than larger vehicles like SUVs or vans.
• Your location: If your area has a high cost of living, that gives you license to set higher prices. You’ll earn more working in an expensive area like New York City or San Francisco than in smaller cities. The corollary, of course, is that your own expenses will also be higher.
• The competition: The more car washing services your area has, the more competitive you’ll have to be with your pricing (and the less you’ll be able to earn).
• Whether you’re providing a mobile service: Mobile car wash services—where the car washer travels to the car rather than vice versa—are usually much more expensive. You can (and should) charge up to twice as much for mobile services.
• What add-ons you provide: You can charge more for add-on services like engine cleaning, dent removal, and headlight polishing.
• The time of year: You may see more demand during certain seasons. For example, people feel more comfortable washing their cars at home during good weather, so there might be less demand in the summer.
• Overhead expenses: At the minimum, you’ll need to fork out for cleaning supplies. Your business will also probably have other overhead costs, such as rent (if you want to set up your car wash in a regular location), wages for your employees, and insurance.

To give you a firmer idea about how much you can charge, Yelp provides information about the cost of various car washing services. They claim that:

• “Basic gas station washes” typically cost $10–$20
• Hand washes cost slightly more, at $20–$30

“Deep inside-and-out cleaning and detailing” can cost up to $250 (this includes add-on services, such as an engine wash and dent removal)

Starting your own business can be intimidating, but it’s doable if you break it down into concrete, manageable steps. Just follow this guide to get started:

1. Do market research

Before you start a car wash business, research the market in your area. This will help you evaluate your competition and make decisions such as what customers you want to target and where the best location to operate from is.

Here are some research avenues you can try:

• Visit other car washes: “Market research” doesn’t have to be fancy; at its heart, it really just consists of seeing what else is out there. This will give you insights into how car wash businesses are run and help you decide which type of wash you’d like to open.
• Talk to other business owners: This might include car wash owners, suppliers, and equipment manufacturers. These professionals may be able to advise you on industry trends, equipment costs, and the challenges involved in running a car wash.
• Find out the car sales statistics in your area: This will give you an idea of how much business you might attract. You can find statistics about car sales and registrations through websites like Statista. Alternatively, try reaching out to car dealerships in your area.
• Check out the International Carwash Association: This is a good source of information about the industry and its current trends.

If you feel overwhelmed, look up the nearest Small Business Administration office and pay them a visit. They may be able to point you toward other resources and help you take your first steps.

Once you understand market trends in your area, you’ll be in a better position to develop a unique selling proposition that’s likely to succeed (e.g., you might provide eco-friendly service options, complimentary hot drinks, or exclusive membership perks).

2. Create a business plan

If you’re starting a car wash, it’s a good idea to write a business plan. Doing this ensures that you have a clear roadmap. It will also be essential if you decide to enter into a partnership or apply for external funding (which we’ll talk about more in the next step).

Your plan should should address:

• Your business goals
• The type of car wash service you’ll offer (self-service, hand wash, automatic, mobile, waterless, etc.)
• Additional services you’ll offer (e.g., interior cleaning, surface protection)
• Startup costs
• Equipment and supplies you’ll need
• Your operating hours
• What training you’ll require
• Health and safety standards you’ll need to comply with
• Whether you’ll hire employees or go at it alone
• What payment methods you’ll use
• Who your main competitors are

Picking a structure for your business

When you create your business plan, you’ll also need to decide what type of business entity you want to form. Your main options are:

• Sole proprietorship: With this type of business, you run it independently, under your own name. You also keep all the profits (although you’re also personally responsible for all the debts). There’s no registration paperwork required for a sole proprietorship, so they’re easy to set up.
• Partnership: This is similar to a sole proprietorship, except that there’s two of you sharing ownership and responsibilities. Depending on which state you’re in, you might or might not need to file registration paperwork to set up a partnership; to confirm this, visit the official website of your state and look for the section related to business or commerce.
• Limited liability company (LLC): This is where your business is its own separate legal entity, which means you’ll be protected if someone claims you damaged their car and sues you (you can’t lose any of your personal assets—only your business’s). When you set up an LLC, you have to register it with your state, which means higher fees and more paperwork. However, the extra protection usually makes it worth it.

3. Choose a strategic location

The location of your car wash is crucial. The site should be visible and accessible, with high traffic in the area and ample space.

Good locations include:

• Main roads
• Larger residential neighborhoods
• Shopping centers
• Office complexes
• Areas near gas stations
• Busy commuter routes

4. Choose a name for your business

At this point, you need to choose a name for your business. Choose something that’s catchy and easy to remember.

Your business name should also describe your services. This will improve your online visibility (on Google, Yelp, etc.) and help potential customers find you more easily.

Note that you could get into trouble if the name for your business has been trademarked, so you need to check. You can find this out from the official trademarks database hosted by the United States Patent and Trademark Office.

If the business name you want hasn’t been taken yet, go ahead and trademark it yourself.

5. Register your business and get permits or licenses

As mentioned, some types of business entities have to be registered with the state.

Regardless of whether you need to register your business, you’ll need to file to get a federal tax ID (also known as an Employer Identification Number or EIN). You can apply for an EIN online at the official website of the Internal Revenue Service (IRS).

To make your business legit, you may also need to:

• Get a business license to operate in your city or county
• Purchase insurance (e.g., general liability insurance and workers’ compensation insurance)
• Get environmental permits (e.g., water discharge permits)
• Ensure your operation is compliant with local regulations

To find out which requirements apply for your business, consult the government agency that deals with business licensing in your state. This will usually either be the Secretary of State’s office or the State Department of Commerce or Economic Development.

If you’re not sure which government agency you need, conduct an online search using keywords like “business licensing [your state]” or “business registration [your state]”—these should tell you which government websites you can get the relevant information from.

Alternatively, contact your nearest Small Business Development Center and ask them for advice.

6. Secure financing

If you plan on starting a small-scale car wash, such as a self-service station, you may be able to fund the venture using your personal savings.

However, if you’re considering something more elaborate, you’ll probably need external financing. Exactly how much you’ll need will depend on the size and scope of your business and whether you need to buy suitable property, land, or equipment.

If you need to get funding from an external source, there are many options available, including:

• Investors: You can explore angel investor networks like Angel Investment Network or AngelList, which will connect you with individual investors. Alternatively, platforms like Fundable or Wefunder will connect you to communities of investors. These work much like crowdfunding platforms, such as Kickstarter and GoFundMe (which you can also try, especially if you have a unique, attention-grabbing business proposition).
• Loans: SBA loans are government-backed loans that offer favorable terms for small businesses. The SBA 7(a) loan program is one popular choice for startups. You can also try traditional bank loans.
• Other personal or business credit lines: Examples include HELOCs (which are credit lines secured by your home as collateral) and business credit cards. This option is a bit risky because it can involve taking on personal debt to fund an unproven business, but some people are willing to do it anyway.

7. Finish setting up your business

By this point, your car wash business should be almost ready. However, you’ll need to cover a few more bases:

• Opening a business bank account: This might not be mandatory if you’re running a sole proprietorship or a partnership, but it’s often necessary for other types of business structures. Even if you don’t absolutely need a business account, opening one is a good idea to compartmentalize and separate your business and personal funds (this will simplify your life come tax day).
• Setting your prices: As we’ve already mentioned, car washing services can be as cheap as $10 or as expensive as $250. Now’s the time to figure out exactly what you’ll charge. Your services should be competitively priced but still profitable.
• Buying equipment and supplies: This will cost just a few hundred dollars if you opt for basic equipment and supplies, but it could cost several thousand dollars if you invest in high-end, advanced equipment and premium supplies.

8. Hire and train staff

Depending on the size of the business you’re envisioning, you may want to hire at least a couple of employees to help you.

When you interview candidates for the job, look for people who have the right skills and can demonstrate that they’re trustworthy and committed. Be sure to check their references before they start working for you.

As their employer, you’ll have to provide training in:

• Car washing techniques
• Operating equipment
• Interacting with customers
• Following safety protocols

It’s your job to make sure that everyone at your car wash business is equipped to do their job competently and provide excellent customer service.

9. Promote your car wash business

Unless your car wash is in a truly ideal location, customers won’t just show up on their own—you’ll need to do some marketing work to make it happen.

There are many different strategies you can use to market your services:

• Network and use word of mouth: Ask people to spread the word about your car washing services, and offer your customers incentives (e.g., discounts or free services) if they refer new people to you. You can also join your local chamber of commerce and other small business groups to make new connections.
• Encourage repeat business: Offer promotions, loyalty programs, and referral discounts to keep customers coming back.
• List in online directories: Add your business to Yelp and Google Business Profile.
• Advertise locally: Try distributing flyers or brochures, or place ads in local newspapers.
• Use social media: This is one of the best ways to engage with potential customers. You can use Facebook, Instagram, and even YouTube to attract attention to your new business.
• Set up a website: This is easy and cheap. Look into services like Wix, WordPress, or Weebly.
• Establish partnerships: Explore cross-promotion opportunities with other local businesses. For example, you can introduce yourself to the owners of auto repair shops or dealerships and offer to collaborate with them on joint promotions or discounts.
• Get positive reviews: The best way to do this is, of course, by providing great service. However, some businesses use more proactive strategies, like offering freebies in exchange for positive reviews. You should also monitor reviews on social media and respond to negative reviews in a constructive and diplomatic way.

Running your own car wash can be lucrative. However, it’s not all sunshine and roses. Starting almost any business can be challenging and occasionally stressful, and this is no exception.

Challenges of running a car wash business

Be prepared to face:

• Intense competition: Many areas have numerous car washes vying for customers. You’ll have to stand out to keep business coming in.
• Labor management: The turnover rate can be high among car wash employees, and it can be challenging to find (and train) reliable and efficient staff.
• Seasonal variations: As mentioned, your profits may be lower at certain times of year. You’ll need to budget for this.
• Environmental regulations: Car washes are usually subject to environmental regulations related to the proper disposal of wastewater, use of eco-friendly cleaning products, and adherence to local environmental guidelines.

Advantages of running a car wash business

Of course, if you’re able to overcome those challenges, you’ll be rewarded. You can look forward to:

• Money-making potential: As we’ve already mentioned, a car wash business can bring in a hefty yearly profit if you choose the right location and marketing and business strategies.
• Low operation costs: You’ll need to pay for water, cleaning supplies, labor, and possibly your physical premises (i.e., rent). All of this costs real money, but not that much—many small businesses in other industries are significantly more expensive to maintain.
• Flexibility and scalability: You have the option of starting a self-service car wash, a hand-washing service, or an automated car wash. You can also scale up your operation further on down the line if you choose (e.g., by offering additional services like detailing, interior cleaning, or paint protection).

Note that if you decide that starting a car wash from scratch is too ambitious but you’re still interested in dipping into this industry, there are alternatives you can pursue instead.

For instance, you could contact other established businesses in your area that feature car washes, such as gas stations, and offer to partner with them. If they have more customers than they can handle, they might be willing to refer some to you in exchange for a cut of your profits.