Do you want to start a car detailing business? If YES, here is a complete guide to starting a mobile auto detailing business with NO money and no experience plus a sample mobile auto detailing business plan template. If you love vehicles, can handle chemicals, have an eye for details and have a substantial amount of money at hand, then you can start an automobile detailing business.
In order to start this business, there are things you need to take into consideration such as, a proper work-space, having the right equipment and knowing what type of services you intend to offer. This business is one that not only requires physical fitness and stamina, but also technical ability as you will work with different hand tools, machines and chemicals without damaging the automobile of your clients.
16 Steps to Starting a Mobile Auto Detailing Business
1. Understand the Industry
The auto detailing industry in the united states is expected to generate billion annually from the periods of 2014 to 2019. The automobile detailing industry is expected to contribute an average annual GDP rate of 3.2 percent annually till 2019. The automobile detailing industry in the United States is divided into two major categories – the interior automobile detailing and the exterior automobile detailing.
The exterior automobile detailing is expected to develop faster than the interior automobile detailing. This is because exterior automobile detailing like car paint is estimated to grow to $11.7 billion by 2018 from $8.7 billion, which therefore means that it is growing at a CAGR of more than 6 percent.
However, interior automobile detailing is also growing as well especially as fixing or installing car coolant have been growing at a rate of more than 6 percent and is expected to reach more than 346 million gallon by the year 2019, with the market size still growing fast.
The automobile detailing industry which was for high end car owners became separate from the car wash industry in the 90s and early 2000s. The separation of the industry was due to the fact that there were more cars of higher value as well as more luxury cars.
Therefore, more people started spending more money and demanding for services that will help maintain their high-end luxury cars. During this period, the automobile detailing industry was not automated as physical detailing afforded detailers the opportunity to give high prices to car owners as well as become consultants.
In the mid-2000s, the automobile detailing industry experienced a bit of downtime due to the fact that detailing was expensive and not many people, except luxury car owners understood the importance of detailing, and as such automobile detailing companies were closing down; and also people were unwilling to leave their cars the whole day for a process known as detailing.
This therefore led to a merging of the car wash and automobile detailing industry, where automobile detailing companies took matters into their own hands by taking their services to their clients instead of waiting for them to come to their workshops.
According to IBISWorld, the car wash and automobile detailing industry has no companies with a dominant share in the industry and this is because the automobile detailing business operates best in the region in which it is located and so a company from another state cannot effectively compete against local automobile detailing businesses except it was offering a franchise to entrepreneurs in the locality.
The revenue size of the industry is estimated to be $10 billion annually with an annual growth of more than 3 percent between the periods of 2011 and 2016. Also there were more than 64,000 car wash and automobile detailing businesses employing over 208,000 people in the United States of America.
Over the past five years, operators in this industry have experienced steady growth due to the recovering economy which has seen more people getting employed and also an increase in per capita disposable income. Another factor that has led to the increase in demand for services in this industry is due to the fact that low gas prices has resulted to more people using cars than was the case previously.
The demand experienced in the industry is expected to continue till 2022; however, this will be at a slower pace compared to the periods of 2011 to 2016 and so operators need to be aware of this fact.
According to IBISWorld, the car wash and automobile detailing industry is one that has a low market share concentration especially as the top four companies in this industry in 2016, generated less than 5 percent of the total industry revenue.
This is because the business is seen as one that is regionalized and localized. Large scale operators not having any physical facilities in other cities could not compete against the small or very low scale operators in those cities. Aside franchises, consolidation is also rampant in this industry as companies seek to improve the size of their customer base.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of an automobile detailing business are those who own high end, vintage, luxury cars, local dealers, sport cars or any form of vehicle. This therefore means that almost everyone who owns and drives a car will require automobile detailing.
This then means that the demographic composition of those who require the services of an automobile detailing business cannot be restricted to just a certain group of people as it encompasses all those who drive and are able to afford the detailing services.
3. Decide Which Niche to Concentrate On
The automobile detailing industry is one where entrepreneurs have to strive hard to not only stand out but get a fair share of the target market. This is why businesses often choose niches to concentrate on so as to be seen by their target customers.
Large scale automobile detailing businesses who have more labour and equipment are however able to offer more niches than small scale automobile detailing businesses because they are usually not able to handle more than a certain amount of services at once.
Therefore some of the niche areas that a business can decide to major in whilst starting the automobile detailing business are;
- Automobile paint
- Auto wax
- Leather conditioning
- Clay bar treatment
- Oxidation removal
- Odor or mold removal
- Auto scratches
- Engine detailing
- Tire repair
- Paint correction
- Auto restoration
- Standard car wash
- Under carriage/engine wash
The Level of Competition in the Industry
The level of competition in the automobile detailing industry is dependent mainly on where the business is located as this is a business where the customers expect to see the physical presence of the operators. Also, the operators have to be physically present to be able to carry out the service of automobile detailing for customers.
Also, while large detailing companies might thrive due to their popularity, customers are willing to drive into the nearest auto detailing shop to have their vehicles detailed without needing to drive too far out to get this service done. Because this is a business that depends on location, you have to be careful in picking a suitable location for the business and not be located too far out.
While demand in this industry has risen due to the positive growth in the economy, most businesses are still struggling. To be able to compete, large auto detailing businesses are careful about the locations they pick for their businesses and also incorporate other services into their business. Small automobile detailing businesses on the other hand offer their customers more personalized services in order to still remain in business.
4. Know Your Major Competitors in the Industry
Having well-known brands are nothing new, the only difference is the industry these brands are in. The automobile detailing business might not be as old as most industries but yet there are some brands that stand out because they are known for either their marketing and publicity strategies, their quality of service or their excellent customer relationship.
Below therefore are some of the well-known brands in the automobile detailing industry in the United States of America;
- Spark and Stallion
- S&R Auto Detailing
- Detail King
- Detail XPerts
- Allure Detail
- Exclusive Detail
The automobile detailing business is one that is very labor intensive and therefore would need the entrepreneur to be aware of what the hourly operating cost is. Knowing the hourly operating cost prevents you from having high overhead costs that will make you run at a loss and therefore have to close shop early. Not being careful about your financial analysis could lead you to panic by offering lower or higher rates than you should.
Demand in this industry is driven by growth in the economy which has seen more cars being sold and also a growth in the spending patterns of consumers. Each individual business’ profitability is highly dependent on location as well as efficient operations.
Large scale industries have an advantage in getting more customers through their advertising strategies while small scale operators usually compete by choosing good locations. The industry in the United States is highly fragmented as the top five companies generate less than 3 percent of the industry’s revenue.
The industry relies heavily on the driving habits as well as the discretionary spending of customers. The industry is not recession proof and has therefore suffered setbacks in its revenue during the great recession experienced in the country in 2008 and 2009. However recent improvements in the economy has seen revenue rising for this industry with an anticipated annual growth of more than 3 percent expected to last till 2018.
Therefore with continued economic growth in this country, it is expected that there will be more car sales which will cause an increase in the number of vehicle registration and also cause an increase in aftermarket services such as automobile detailing.
5. Decide Whether to Buy a Franchise or Start from Scratch
The decision of whether to start your business from scratch or buy a franchise should solely depend on the goals and objectives of your business; especially as each decision has its own pros and cons. When starting your business from scratch, you are in control of all the major decisions that will have an impact on your business in the long and short runs.
If you are lucky to buy over an existing business or get a very good location, it will be less challenging to run your business from the scratch because you may not need to conduct intense marketing and promotions as one who is starting from a brand new location. Also, in starting your business from the scratch, you are able to adapt quickly and proactively to changing trends in the industry.
Buying a franchise is a business decision that entrepreneurs who do not want the hassles associated in starting a business from the scratch usually go for.
It is however important that you conduct thorough investigation on the automobile detailing company you intend to buy your franchise from so that you do not end up wasting your money buying a franchise that isn’t right for you especially as the franchisor will be making most of the major decisions that will be affecting your business.
6. Know the Possible Threats and Challenges You Will Face
Every entrepreneur going into business knows to expect several threats and challenges that might mar the success and growth of the business if not proactively acted on. As an entrepreneur you should know what threats you are likely to face and prepare for it even the unexpected ones.
Therefore, the challenges and threats you are likely to face include; economic downturn which will affect the rate at which customers spend to have their automobiles detailed, competition from new entrants and already established operators in the industry, a poor choice of location and government policies.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Choosing what legal entity would be appropriate for your auto detailing business is one of the most important decisions you would need to make, as whatever you choose will have an impact on how your business can grow in future.
When choosing a legal entity for your automobile detailing business, you should consider factors such as ownership and control flexibility, liability, ease of set-up and taxation. If you are not quite sure of what legal entity to pick, you can engage the services of an attorney or accountant to help you out with the decision.
In the United States of America, there are about four major legal entities available for entrepreneurs going into the automobile detailing business and they are sole proprietorship, partnership, corporation and Limited Liability Company (LLC).
The LLC is one of the most popular forms of legal entities amongst entrepreneurs and this is because it offers the advantages of the partnership and the corporation. It should however be noted that incorporation laws vary from state to state, so efforts must be made by entrepreneurs to find out which legal entity would best suit their purposes in the state they intend to be operating from.
8. Discuss with an Agent to Know the Best Insurance Policies for You
Getting the right insurance policies for your business is very important as it is mandatory that all businesses operating in the United States get insurance policies. The importance of an insurance policy is to help protect the entrepreneur from paying personally for anything that goes wrong during the course of running the business.
It is however important that not only should the right insurance policies be purchased but also a budget should be set aside to handle this aspect of the business.
If you are however confused as regards what insurance policies you would need for your business, it is best you meet with a professional insurance agent or broker so that you can be rightly advised. Below therefore are some of the basic insurance policies that you would need to purchase in order to successfully start and run your own automobile detailing business in the United States of America;
- General Insurance
- Health Insurance
- Liability Insurance
- Auto Insurance
- Workers’ compensation Insurance
- Business Owner Policy Group Insurance
- Property Insurance
- Errors and Omission Insurance
9. Protect your Intellectual Property With Trademark, Copyrights, Patents
The automobile detailing business is one that is in the service industry and therefore any entrepreneur going into this business would not need to bother about applying for an intellectual property protection for the business, except such an entrepreneur comes up with a product that can be used in detailing the car. If this is the case, your products would need to be severally tested before you get an attorney to file for intellectual property with the USPTO.
10. Get the Necessary Professional Certification
The automobile detailing business is one that is a service oriented business that requires physical fitness, stamina and the technical ability to handle certain tools and chemicals, it however does not require any form of professional certification before one can start or run the business.
However, to gain more credibility and also network, there are local associations that you can join in order to give your business a boost.
11. Get the Necessary Legal Documents You Need to Operate
Having legal documentation is very important if you intend to run your business without any sort of hitches in the United States of America. The regulated authorities take it seriously when a business is found without the proper documentation because not only will the business be financially penalized, the owner of such a business might be banned from ever running such a business.
Therefore, some of the basic legal documents that you are expected to have before you can start your business in the United States of America include;
- Certificate of Incorporation
- Operating Agreement
- Tax Registration Certificate
- Local Business License
- Employer Identification Number (EIN)
- Business Plan
- Insurance Policy
- Federal Tax Identification Number
- Environmental and Safety Inspections
12. Raise the Needed Startup Capital
Having the necessary finance for your automobile business is very important so that you do not end up closing shop half-way because you ran out of funds before your business stabilizes. This is why a business plan is very important as it can help you source for start-up capital from private investors and financial institutions.
Some of the financing options that are therefore available for your automobile detailing business include;
- Raising part of the start-up capital from personal savings and sale of personal stocks
- Sourcing for soft loan from family members and friends
- Applying for loan from the bank
- Raising money from private investors
13. Choose a Suitable Location for your Business
The location you intend to use for your automobile detailing business is very important as this could lead to you spending more or less money in publicizing your business to your intended target market. While this is the kind of business that can be run from home, you would need to determine if operating from home is in line with your overall vision and objectives.
Also, if you are running your business in an area where there are many competitors who are leasing facilities, you may need to reconsider your options.
It is important that the location you choose is one that is within the permitted zoning locations by the city for businesses such as yours. You might need to find out if you would require a special license in order to locate your automobile detailing business where you have chosen.
This is why most entrepreneurs work with real estate agents when looking to lease or rent a facility. You should ensure that the location you choose for your business is one that sees a lot of vehicular traffic or is close to a place where people go to such as a mall, shopping center, car sales lot and gas stations.
While the facility in the city might be pricier than that on the outskirts of the city, only pick it if you would be able to recoup your investment in the shortest time possible; otherwise go for something that is within your budget even if it is not within the city hub.
Having a budget when looking for a location will enable you spend within your budget and not have to cause a strain on your overall budget.
14. Hire Employees for your Technical and Manpower Needs
The automobile detailing business is one that requires a substantial amount of money to start up and run. The start-up capital for the business will be used to secure a facility that has the required amount of work-space, and also getting the necessary equipment and chemicals.
If you are starting your business on a tight budget, you might look to either running the business from home on a very low scale or getting some of the equipment you would need as fairly used. The automobile business is one that requires not only a certain level of fitness physically but also stamina as well.
You will also need to have an eye for details and the technical capability to handle the different tools, chemicals and machines that will be needed. If you are going to be hiring employees to help run the business, then ensure that they have the necessary attributes so that you do not dent the reputation of your business.
The detailing chemicals you will need to get if you are starting your own automobile detailing business are wax, car wash soap, cleaner and treatments for tire, windows, wheel carpet as well as the upholstery. The detailing tools you would need for your automobile detailing business may vary depending on the type of services you intend to offer, and they include; vacuum, sponges, wax buffer, cleaning towels, brushes, hoses, buckets and window squeegees.
It is important for you to note that some of these items can be gotten for fairly used; they however, have to be in good condition.
The employees you will need to successfully run your automobile detailing business successfully are; chief executive officer, admin and human resources manager, supervisor, accountant, marketing executive, front desk officer, automobile detailers and security guard.
From the above break down, you will need at least 8 key staff in order to run an effective, efficient, standard and successful automobile detailing business.
The Service Delivery Process of the Business
In the automobile detailing business, service delivery often depends on the scope and kind of detailing you are offering your customers. There are two types of automobile detailing – interior automobile detailing and exterior automobile detailing.
While some businesses focus on just one of the services, others usually combine the services in addition to providing other kinds of services as well. There are however specialist auto detailers and those ones offer rare services that others do not offer. The auto detailing business is a physically demanding one, so it is best for entrepreneurs to choose their services wisely.
15. Write a Marketing Plan Packed with ideas & Strategies
Before you can develop the right marketing strategies that would draw your intended target market to your business, you would first need to conduct a thorough market survey. Your market survey allows you to know who your target market is, what they expect from you, what to expect from them and what your competitors are doing to attract those in this target market to their own businesses.
Another thing you would need to do before developing your market strategies is to ensure that you build a successful profile for your business.
Automobiles are not something you should be experimenting on, so you may need to work in an automobile detailing company to understand how best to detail automobiles, and also start your business by offering your services to close family members, friends and neighbors before working your way up to actively marketing your business to the larger market.
Whilst creating your marketing strategies, it is essential to know what channels would best work for you and how much you will need to be able to use the available platforms you feel will best push your business into the awareness of your target market.
The rise of the internet has had businesses using the internet to massively market their products and/or services especially as this means is not only effective and far reaching but also cheaper. Below therefore are some of the platforms that you can effectively utilize in marketing your automobile detailing business;
- Ensure that you print brochures with information about your services, rates with contact information attached and send this to auto sellers, auto parts dealers as well as other stakeholders in the industry.
- Ensure that the automobile detailing business is listed in yellow pages as well as online directories
- Engage in direct marketing and via the internet
- Ask your loyal customers to help spread the word about your automobile detailing business
- Ensure that you place adverts for your automobile detailing business in local newspapers and magazines as well as on local radio and television stations
- Ensure that you use social media platforms such as Facebook, Google Plus, Instagram, Snapchat, Twitter and YouTube to market your automobile detailing business
16. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Boosting the awareness of your brand helps to not only retain customers but to also attract new ones. While all forms of publicity – bad or good – is good for certain businesses and industries, such is not true for this kind of business as it is only positive publicity that will help increase the clients you need to sustain and grow your business to the level you want it.
The internet for instance has been embraced by many entrepreneurs who understand the far reaching effects of the internet coupled with its not so expensive rates. This does not however mean that offline publicity measures should be discarded as most of the target market might not be using the channels you are using to promote your business.
This means that while you might use your Facebook page to advertise your business, you would also need to physically distribute handbills and fliers to promote your business as well. Below therefore are some of the platforms that you can leverage on in order to boost the awareness of your brand as well as create a corporate identity for your automobile detailing business;
- Distribute hand bills in strategic locations and paste fliers on utility poles
- Participate in and sponsor certain community events in order to promote your automobile detailing business
- Network with other car wash businesses, car sales lot and other stakeholders in the industry in order to increase awareness for our business.
- Ensure that you place adverts in local newspapers and auto magazines as well as on radio and television stations
- Be active on auto blogs and forums by writing educative and enlightening articles about the industry via your official handle
- Build a website and ensure that you drive as much traffic as you can to the website by employing a search engine optimization consultant to help with this.