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"Car Wash Business": Start-up Cost and Earning Potential

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Car ownership always grows with each passing year. And yet, more and more owners have less time, or simply too lazy to wash the vehicle themselves. With that in mind, seemingly a car wash business is a very lucrative one. However, the entry barrier is a bit high with the tremendous amount of research and preparation needed before the business can roll.

Preparations and planning, along with building the car wash itself will take approximately five to six months. But yet, it is a very promising business with huge profit and longevity potential.

Before you start planning your car wash business, here are some things that might help you...

How Much Investment Will You Need?

The start-up cost will hugely dependent on whether you already own the land or not. If you already owned a vacant lot, approximately $100,000 investment is sufficient to get the business rolling.

If you need to tear up a building, lease a property, or buy one, you need to add the cost to the initial $100,000

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The important aspects of the investment will be:

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1. Real Estate
The location is king, and the better the location, the higher the price will be. An ideal location will be near a high-density residential area or a large department store.

2. Construction Cost
Your construction cost will largely depend on its size, and how many bays will you have. Average car wash size is about 1,000 square feet, but larger ones above 3,000 square feet can also be found. The construction will also depend on whether your car wash will be hand-wash, tunnel, or in-bay automatic.

A hand-wash setup will cost you considerably less in the construction investment, but will be labor intensive. On the other hand, An automatic machine setup,whether tunnel or in-bay will be a lot more expensive initially, but can endure for 10 years before needing to be replaced. With a hand-wash setup, you can charge your customer more for a premium price. However, you need to calculate the labor cost carefully whether it's profitable.

Tunnel setup is the most expensive, and also need a larger area to function appropriately. However, a tunnel car wash setup also has the most earning potential.

It's also a good idea to consult your local architect with car wash building experience before you start. Remember, the construction itself will be your primary strategy that differs you from your competitor, so make sure it's well equipped while still profitable.

3. Equipment Cost
Each automated car wash bay will cost you approximately $35,000 to $50,000, but it will vary greatly depending on many factors such as location and equipment manufacturers.

As discussed before, a hand-wash setup will also cost you considerably lower than the tunnel or in-bay setups.

To get a clearer picture, consult your local car wash distributors, or do online research for various brands.

Earning Potential

A hand-wash bay average monthly earning (according to statisticbrain.com) is $1,489 per bay, that translates to $17,868 annual revenue per bay. Remember that the setup cost per bay for hand-wash/self-serve car wash is a lot cheaper, and you can install more bays to generate more revenue.

For In-bay setups, the average annual revenue for a single operation is $139,000, with almost 20,000 cars washed per year.

For tunnel setups, expect an average annual revenue of $686,250

Remember that your profit will largely dependent on your efficiency to decrease the costs, and marketing effort to bring in more customers.