Investor FAQs
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How much revenue does a car wash generate? What kind of profit can I expect?
The majority of new builds need to generate $500,000 to $600,000 in revenue each year to satisfy the investor’s financial pro forma expectations. Successful sites can generate as much as $1,500,000 annually. Profit can reach 50% of revenue on successful sites.
How much does it cost to build a car wash?
There are three major costs to building a new car wash:
The building and civil work, which, depending on size and design, can be anywhere from $300,000 to $2,000,000;
The equipment, including all leasehold improvements can range between $500,000 to $1,750,000; and
The land and all soft cost to prepare for construction – from $200,000 to $1,500,000.
How long is the building phase?
The building phase of a well-planned project should range from 16 to 26 weeks.
What are the different business models?
There are three clearly-defined models: Express exterior, flex-serve and full-service.
Express exterior. Cleaning and drying of the exterior of the vehicle and is typically paired with free vacuums where the customers clean the inside of the vehicle themselves.
Full-service. Exterior cleaning, interior vacuum, windows in and out and dash/console wipe down. It requires anywhere from 10 – 30 employees per shift depending on the volume and additional services being offered. Additional services would include hand wax and complete detailing of the vehicle inside and out, carpet shampoo, stain treatment and so on.
Flex-serve. A combination of both express exterior and full-service; requires the same number of personnel as full-service (10-30).
What kind of inventory is needed on hand? Is there a shelf life for the inventory?
One of the beautiful facts about operating a car wash is the simple inventory situation. Nothing has a shelf life of any concern. Chemicals, spare parts and office supplies make up the vast majority of inventory required to operate a car wash.
How many cars can I wash?
Depending on your model, location and site layout, volumes can range from 60,000 to 250,000 cars per year and even more in rare cases.
How long does equipment last?
Typically, equipment needs replacing every 10 to 12 years. It can last up to 20-30 years if well maintained but, usually, there are design improvements that will influence a decision to replace equipment.
What size property do I need?
Depending on setback requirements anywhere from .5 of an acre to 1.5 acres.
Where should I build?
It’s best to get work with Washteq to generate a site proforma worksheet and run many sites to understand what pencils the best. Motor City Wash Works has a site selection brochure as there are too many components to this question to fully answer here.
How much liquid cash do I need?
The typical loan-to-cost for banks is 70%, which means banks expect you to fund 30% of the total project.