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How to start a self service car wash

ajwells1

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Hello,

This is my first time on this forum. I have had an interest in starting a self service car wash for the past couple of years. The interest has turned into more of a passion and I would really like to get the ball rolling. Is there any advice? I don't have a lot of capital to get started. Maybe $5000. What are the recommendations on loans? What would be my steps there?

Any help that can be provided would be much appreciated.
 

LibertyCarWash

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First you're going to need a lot more capital. Home equity loans, lines of credit, borrowing from family, or finding investors. You'll need at least 15% down with good credit. Look around your area for an existing wash to buy. Building one is pretty expensive. Most of the new ones I've seen are coming in at over a million. If it's something you are serious about find one to work at for a year or two to get some experience. If you like it then keep working towards your goal.
 
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MEP001

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Right now it's almost impossible to get a loan to start or buy a car wash with less than 30% up front. A million is low for a nice 5-bay and auto. Look at leasing.
 

bigleo48

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Hey thanks.
Not sure coincarwash was joking. One good shampoo/vac will eat up most of that $5k.

Carwashes have a high barrier to entry as they require a large capital outlay (that you don't have).

That stops the vast majority of people who look at these places and way underestimate the costs. I get many who stop at my wash and say "how much to build one of these?" I ask them for their guess to which I get "$150k". I like to reply that I have $125k in paving/curbing/entrance/sewer (everything underground not including land). I then tell them "multiply that by 15 and you're getting close.

Big
 

coincarwash.ca

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I was serious about my comment. I just spent over $7000 on one vending machine. I have seen some great washes built with tons of debt, and these owners are always complaining and crying the blues.
 

Waxman

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$5000 is not enough cash to build any type of coin op carwash.

I started on a shoestring and it is the tough way to enter the carwash business. 4 years in I am glad I have a busy detail shop to help weather the lean times.

Finding financing will be your main hurdle, especially since you have no experience and little money. If you were a banker, would you lend yourself the $750,000-$1.2MM to get started?

Go and work at a pro carwash first, pay your dues to the industry and look for a wash to buy. Look up "due diligence", because this will be:eek: your mantra for the next few years (minimum) if you are at all serious.
 

Greg Pack

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OK, OK, I got into my first carwash in 1993. I was in my twenties and just had gotten a divorce. It was next to a fire station I worked at. The equipment was there but in rough shape. The owner was a CPA who was heavy into the oil change business. His primary business had gotten too large to worry about the little four bay. He was a bean counter and he figured a few hundred per month rent from me was better than nothing. I had to borrow 7K to get it running. It took a while but we got the place making OK money for the size of my investment. My business grew from there. Anyway, my point is there are rare opportunities, but they are out there. With the money you have you'll basically have to find an opportunity similar to what I lucked into. Look in distressed areas...
 
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robert roman

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If you only have $5,000 in cash, my advice is to see how much seed capital you can raise from family and friends towards your loan down payment (equity injection).

How much cash is needed will depend on strategy; build new or buy an existing wash.

Up until a few years ago, building 5 wand-bays plus 1 in-bay in or around Sarasota would set you back about $1.2 million including real estate. Planning to launch normally takes about 1.5 to 2.0 years or more.

However, given the depressed real estate market and equipment distributors hungry for sales, you should be able to build now for less than $1.0 million.

On the other hand, there are a lot of carwash facilities for sale in Florida due to the recession and contracted real estate market. For example, Sarasota recently estsimated that it would need to attract 15,000 new jobs over the next 5 years just to replace the jobs that were lost over the last 2 years. Given the depressed market, you might be able to purchase an existing self-service wash in this area for as little as $0.50 on the dollar.

I have a "free" carwash investor's guide on my website that you may be interested in.

http://carwashplan.com/investor_s_guide
 
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ajwells1

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Thanks for all the advise everyone. I never thought it would be easy, and I know that my limited funds are a hurdle. I just couldn't imagine that everyone that owns a car wash already had all that upfront money. I am serious about this and was just looking for my best options. Giving up is not one of them.
 
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MEP001

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ajwells1 said:
I just couldn't imagine that everyone that owns a car wash already had all that upfront money.
Anyone who built one did. You asked about starting one, that's why the negative comments were so many.
 

rph9168

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The best advice given here is to look for an existing wash that might carry the paper or do some type of lease purchase. Unless you can come up with a silent partner with money or a significantly greater amount of down payment there is little chance of buying or building a wash. Banks are tighter on loans than I have ever seen in this business. You almost need enough money to buy it out right before they will consider a loan. Even people wth outstanding credit are being turned down.
 
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Waxman

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What have you done in terms of due diligence besides poke around on the ACF?

Just wondering.

My limited finances were somewhat mitigated (in the bank's view) by the fact that I had studied the industry and actually worked at a carwash for free in order to learn the business better.

It seems like my suggestion to work at a wash is met with chirping crickets most often. But how will you know unless you do just that? Guess what? If you buy/build a carwash, you'll be working at a carwash alot of the time.
 

robert roman

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Ignore the critics, Waxman. Suggesting that a newbie first work at a carwash before building or buying one is sound advice.

Unfortunately, it is advice that is seldom given in the industry because of the pressure to buy equipment now, not later.
 

kjcleanercar

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$5000 is not enough amount to build any type of carwash. you need more money for it
I started on a Car Detailing Dallas and it is the tough way to enter the carwash business. 4 years in I am glad I have a busy detail shop to help weather the lean times.

Finding financing will be your main hurdle, especially since you have no experience and little money. If you were a banker, would you lend yourself the $750,000-$1.2MM to get started?
 

washnshine

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It seems like my suggestion to work at a wash is met with chirping crickets most often. But how will you know unless you do just that? Guess what? If you buy/build a carwash, you'll be working at a carwash alot of the time.
Not by me - that is exactly what I did and strongly suggest it to all future investors. I worked at a gas station wash, a rollover and self serve location and cloth exterior all in the 1980’s and early 1990’s to get experience.
These were my high school and college jobs. Also my prep for ownership someday! You can’t beat “hands on” in the industry.
 
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