Do you want to know how much car wash businesses make monthly? If YES, here is a quick analysis detailing the income potential of car wash owners.

Although it has not been studied as closely as other industries, the secret is out — the car wash industry in the United States is profitable. According to industry reports, consumers spend an estimated $5.8 billion at car wash businesses annually, with approximately eight million vehicles being washed on a daily basis.

According to reports too, about 2.1 percent more vehicles were cleaned at car washing facilities in 2013 compared to the number reported in 2011. Between 1998 and 2013, the number of automobile owners who used car washes to clean their vehicles instead of washing their cars themselves increased by 69 percent.

With industry revenues of nearly $6 billion and consumer interest in car washes continuing to grow, it is easy to understand why someone looking to strike out on his or her own would be interested in opening a car wash. The best customers are the ones that return weekly to wash their cars. Most car wash companies offer a free wash after a certain number of washes to get customers to come back again.

Each car wash has a basic charge and there are typically additional things that can be requested by clients, such as using auto freshener or wax that are sold for an additional charge. Detailing is the most expensive because of all the additional services provided.

If you are considering opening a car wash, the first step toward achieving that dream is to figure out which type of business you want to operate. Not including mobile car wash businesses, there are four types of professional car washes operating throughout the united states:

  • Full service car wash
  • Exterior conveyor car wash
  • Self-serve car wash
  • In-bay automatic car wash

The type of car wash you decide to establish will impact the amount of money you will need to start your business, how much it will cost you to operate and how much you will make as profit.

Note that if your operation is going to involve washing automobiles by hand, your start-up costs will be lower than they would be for an automated car wash, but your ongoing labour costs will usually be higher. Also, if you are going to open an automated car wash, you will be able to wash more cars per hour without having many people on your payroll, but you will have to replace your equipment every ten years or so.

Calculating How Much Car Wash Owners Make Monthly/Annually

Calculating cash flow is crucial for both new and already existing car wash businesses. Moreover, calculating cash flow to determine profitability is part of the process of securing a business loan. If you are buying a franchise or an old business, it may still be valuable for you to calculate these figures to wrap your mind around the true value of your investment.

Routinely calculating cash flow may also uncover insights into why a particular car wash might not be as profitable. It can also help with deciding what location your car wash empire should expand into next. But before you can start calculating, below are some factors you will need to know and analyze.

  • Annual Traffic Count

You will first need to know how many cars drive past your car wash site per day. Some car wash owners have had to research this figure before they even opened shop. Banks also want to know this data to determine the risk of loaning your car wash funds. You can usually find this data by looking online for traffic volume from the Department of Transportation. Howbeit, the national average annual traffic counts of 30,000 remains the baseline.

  • Days of the Year in Operation

Also, you will have to write down how many days out of the year your car wash will stay open. Consider that you will be closed for holidays, inclement weather, routine maintenance or occasional equipment failure. If you are unsure about these variables and how many days you are actually open a year, you should use a worst case, median, and best case scenario figures.

  • Capture Rate

This figure gives you an insight into how many cars out of the thousands that pass your car wash every single day actually stop in to get their cars clean. However, the capture rate for your car wash will also depend on a number of factors.

A road with a higher speed limit or a median may have a more difficult time capturing cars than one with a slower speed limit. If your car wash is difficult to notice because of trees, other businesses or a lack of signage, this will decrease your capture rate.

Estimating capture rate can be difficult if you don’t have the data to support what would be an accurate number. If you have the previous year’s data on the number of cars your car wash serviced, you can divide that by the estimated annual traffic volume on your street to determine a capture rate. If you are starting a new car wash, you can either ask other car wash owners in the area or use a moderate 0.75 percent figure.

  • Average Ticket Price

Meanwhile, your average ticket price is a number based on the average amount that your customers are spending each time they use your car wash. You can analyze this by taking the total revenue for your car wash and dividing it by the total number of cars serviced. If you don’t know these numbers, the industry average in 2017 was $15 per ticket.

  • Profit Margin per Vehicle

Agreeably, the profit margin that your car wash will make per vehicle is the most important factor when you are calculating the cash flow and profitability of your car wash. Experts believe that the average profit per car for in-bay automatics was $4.35 (or 29 percent of an average ticket price of $15), although your car wash could easily be above or below this amount.

It is important to determine your total revenue for a sufficient period of time (greater than a year of data if you have it), subtract your total expenses for that period and divide the resulting figure by the number of cars that you serviced in that time.

After considering the above factors coupled with the variable and fixed cost of doing business, including rent or a mortgage payment, the average business cost to wash a car at a professional location is $4.13. With a given bay washing 20,000 automobiles every year, your operational expenses will be $82,600 annually. If you charge $10 per car wash, your net profit will be $117,400.

The average price for a simple hand car wash is $5 to $7. For self – service systems, the charge is usually $1 to $2 for a 15 – minute use of the washing equipment. Vacuum charges are about the same. The average customer might spend $2 to $4.

For automatic car wash systems, the average charge is $10. Most customers like to add some extras and can pay as much as $15 for a wash with the extras of interior cleaning, freshener, tire treatment, and the application of car wax.

To calculate the average car wash business profit you can make, take the total estimated revenue and subtract by the total average costs and the number you get is $57,400. Since this is just an average car wash business profit, there is potential to make much more profit by either opening up more bays, adding additional car wash services and having customer loyalty programs.

Conclusion

Although a six – figure bottom line is certainly impressive in this industry, it is important to note that the number is the potential profit from just one bay at an average car wash. You have the potential to make significantly more with that bay by attracting more than the average number of cars. Savvy entrepreneurs can also multiply their profit by installing additional bays, opening more car wash locations, and investing more in business publicity and branding.

Joy Nwokoro