Car Wash - Business Plan

Business Plan
Set up a car wash and watch the cash flow in
Given the sharp increase in the number of cars on Indian roads along with high disposable incomes, the
time is ripe for setting up quick, automatic car wash stations
What started as an “automobile laundry” in Detroit in 1914, gave young couples the world over five quick
minutes of privacy, stole our imagination through erotic Hollywood flicks and even became a matter of
litigation in drought ridden Australia, is now in India. The mechanized car wash, in its initial stages in
India, is an exciting prospect.
Semi-automatic car wash facilities are available at some service stations in India. But, the opportunity lies
in the fully automated car wash facility, popular in many countries. In the US alone, there are 14,000 car
washes with combined annual revenue of about $5 billion, says a report by US-based market research
firm First Research.
This is the time to start a car wash business in India. We tell you why and how.
How it works and what it costs. The customer needs to drive into an enclosure, and drive out with a
washed car in just about five minutes. All this while he keeps sitting inside the car. The time may vary a
bit according to the facility chosen—a quick wash, normal wash, under chassis wash, or triple foam wax.
The equipment will cost Rs 6 lakh-17 lakh, depending on the company the equipment is bought from.
Entrepreneurs will also need to invest in real estate and the set-up. The KKE Group (0712-2237066) and
Marvel Carwash Equipments (040-66483045) distribute car wash equipment in India. KKE Group CEO
Ramesh Borikar provides a business model for KKE equipment (see Car Wash Business Model).
For customers, the charges will depend on the service chosen. While a plain car wash will cost about Rs
200. waxing will come to Rs 50-100. Interior cleaning, including manual polishing of the dashboard,
washing or vacuuming the mats and seat cleaning, will cost another Rs 50-100.
Why will people opt for a car wash? With servants, maids or drivers doing the needful, a lot of you may
ask why a mechanised car wash at all. And, whether people would be willing to shell out extra and come
to a car wash station.
Borikar has an answer, “Domestic helps often use the same cloth for all the cars leaving scratches on the
high finish painted surface.” Automatic car wash is touch-free as high-speed water jets are used here. For
families where both the spouses are working, or those owning more than one car, hiring a domestic help
may be difficult. Moreover, a car wash is needed only 2-4 times a month and not everyday.
The car wash system is especially suited for premium cars. More and more people in India are going for
premium cars, and are not very comfortable to leave its maintenance in the hands of domestic helps.
According to the Society of Indian Automobile Manufacturers (SIAM), domestic sales of cars in the
executive, premium and luxury segment (4,501mm and above) in 2006-07 stood at 47,183 up from
33,873 in 2005-06, a growth of 39.30 per cent.
Some people prefer to get their cars washed when it goes for servicing. However, as most families in
India own a single car, giving away the car for one complete day causes a lot of inconvenience. Also,
some garages use diesel to remove oily stains, which in the long run can degrade the paint finish and the
rubber parts.
Why is now the right time? The First Research report points out that the demand of a car wash “is
driven by new car sales and growth in consumer income”. Higher disposable income is now a reality in
India and consumers no longer mind paying a little extra if they are sure of world-class services.
According to Euromonitor International, a market research website, the annual disposable income in India
in 2006 was Rs 21,50,991 crore, up from Rs 16,28,987 crore in 2003.
Though there is no direct survey that indicates the potential of the car wash market in India, it’s a fact that
the number of cars hitting the Indian streets is increasing every year. SIAM data shows that domestic
sales of passenger cars in 2006-07 was 10,76,408, up from 882,208 in 2005-06, a jump of 22.01 per
cent. More recent figures say that domestic passenger car sales for April 2007 stood at 82,394 up from
74,542 in April 2006.
A major chunk of business can come from other sources. Says C. Ramakrishna Raju, marketing general
manager, Marvel Carwash: “A car wash can have tie-ups with car rental companies and travel agencies,
specially the ones with premium fleets. Modern parking lots may also be interested in this service.”
Finance:
Fixed cost
equipment: 6.00,000
Set up: 2,00,000
Land {rent 4000 per month}: 48,000:{yearly}
Finance : 12,75,000
Fixed cost : 10,000
Monthly cost
Emi : 300000
Labor: 10,000
Soap material: 4500
Water : 1350
Other expenses: 2,500
Total expenditure:21,81,350
Estimated income per month 1,31,650

Profitability range. “The profitability of individual firms depends on favourable location and efficient
operations,” says the First Research report. It is estimated that over 80 per cent of the customers come
from within a 10-mile radius of the location. Conduct surveys and collect data about different localities
regarding the population and the number of cars. Also, take into consideration certain conditions, such as
a busy street, no-exit restrictions, traffic signal, shopping mall, or a car service station. Anbu Christubass,
34, chose one of the busiest locations in Bangalore while setting up a car wash station, SLV Carwash.
Its but obvious the outskirts of big cities, where people are buying property, have a lot of potential. It is
also important to find out if any development like a road or a flyover can affect traffic flow in the near
future. Once your car wash is up and running, don’t forget to advertise in local newspapers, or local cable
channels.
Give add-ons to maximise profit. As in any other business, customer satisfaction will be the key here
too. Happy customers will mean positive referrals and more business. Car wash owners around the world
have maximised profits through various ways—, creating bizarre theme washes like an amusement park
experience for kids. I do not recommend any of the above, but you can still make your outlet special.
“The revenues from your business can be complemented if you provide services like car insurance,
accessories, Internet facility, and car finance,. A café or a gift shop can attract more customers. “Sitting
inside while the car is being washed is a good experience, especially for kids. They like sipping a soft
drink while watching the water being splashed on the car. That can be your USP,.
The green perspective. A mechanised car wash uses less water than what is used by domestic helps at
home. In Australia, affected by severe droughts, people identify water-efficient carwashes. Water
recycling is part of almost all automatic car wash systems. About 75 per cent water can be reused about
3-4 times. The soap used here is biodegradable as against the common detergent that damages car
paint.
And finally, as ehow.com, a “how to” site tells you with a pinch of humour, one of the 10 things you need
to do to run a successful carwash is: “Hope for rain. Rain creates mud, mud makes cars dirty, and you’ll
make them clean.”

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Business Plan

Set up a car wash and watch the cash flow in

Set up: 2,00,000

Land {rent 4000 per month}: 48,000:{yearly}

Fixed cost : 10,000

Soap material: 4500

Other expenses: 2,500

Estimated income per month 1,31,650

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