Insider Secrets for Starting a Successful Business

Starting a Car Wash Business

Andy Pazz, author of How to Set Up an Express Exterior Car Wash, provides tips about how to start a car wash. He covers choosing between tunnel, rollover, touchless, and self-serve. He also offers advice about buying car wash equipment and locating your car wash for maximum profitability. [16 min.]

Tell us a little bit about your background in the car wash industry.

I started back in 1969 with Hanna Industries, which was the leading car wash manufacturer in the industry. There were actually three big manufacturers, Hanna Industries, Sherman Supersonic on the East coast, and we’re on the west coast, and California, which is actually down in Los Angeles. I moved to Houston from Portland, Oregon, and was first regional national accounts manager specifically moved there to help develop the oil companies programs. Prior to the oil companies getting into the car wash business, you would go into a station and you would buy, lets say eight gallons of gas and you’d get two free glasses with some Shell signature on it or something, and they just wanted to move product. So we came into the picture, we said, well why not offer a free car wash with an 8 or 10 gallon or a fill-up purchase. So that’s basically how I started in the business. And I stayed in Houston for about five years, helped develop the Conoco account, the Exxon account, Gulf Oil, etc., etc. So that’s how I started in the car wash business.

What are the different types of car washes that someone can start?

The tunnel car wash is one that has a building, has a conveyor, and you’re pulled through, you pull up, the attendant greets you, leads you onto the conveyor, and then you go through and it’s automatic, and at the other end, generally a 70 to 80 to 100 feet long conveyor, you’re on your way and you’re gone. On a full-service car wash, you would get out of the car, walk down a aisle watching your car going inside, watching your car being washed, etc., and then at the other end they would wipe your car down so forth and so on. That’s very labor intensive, and that’s why the exterior tunnel really coming into its own because labor is very minimal. Probably two or three people can run an exterior tunnel car wash. The other car wash would be, in the industry we call the rollover, or automatic. That’s where you pull into a bay, you stop your car, and the car wash actually goes back and forth over your car, and then there will be a sign there that says proceed, and you’ll just leave and that’s it. The third would be a self-serve. Generally a car wash has four or five fixed bays, and you pull in and you wash your own car. Those are the three predominant types of car washes.

Which type of car wash do most people choose to start when they’re researching this business?

Well, what’s happened in the past, oil companies got into the car wash business both in conveyor and automatic, and about 10 years ago, oil companies getting into the rollover business because they could actually add on a car wash into an existing location. Those are always going to be very popular, but the volume that they’re capable of is only about 15-16 cars an hour maximum, whereas in the tunnel you can adjust the speed of the conveyor depending on how busy a day it is, and you can wash anywhere from 60-100 on up, but 60, 70, 80 cars an hour is generally the amount that you can wash comfortably, depending on the length of the building. The thing with exterior is if you price out an exterior with the building, etc., etc., not counting the land, and then you price out four or five bay selfserve with one or two automatics, cost of construction and equipment is almost equal. Well, the tunnel will generate a lot more volume, and therefore a lot more profit if run correctly. It’s location, location, location, so that’s very very important. But the tunnel is the one that’s capable of really generating a lot of volume and income.

For the entrepreneur, what are some of the benefits of running a car wash?

Nowadays, it’s getting harder and harder to wash your car in an apartment and you’re not supposed to wash your car at home because environmentally it’s not really good for the environment. The cost of getting into a car wash is pretty substantial, and exterior especially, but the return investment on the equipment can be paid off anywhere from 5-6 years, and the amount generated can be substantial. I’ll give you a good example: here in Portland there are about 135-140 exterior car washes, and there isn’t one for sale. There hasn’t been one for sale for probably three years, and generally there sold between existing operators. The average exterior car wash in the Portland area will generate between 5500 and 6000 cars a month, at an average of about $6-7 per car, and there are others here that will do 10 and 15,000 cars. Well, when you figure 10 and 15,000 cars at $6 and $7 and $8 per car, you can figure out how much volume you can do, and the cost of operation is probably, it’s hard to say, I don’t like to get into the cost of everything as far as labor and electric because it varies so much from area to area. You can net probably around 20-25% of volume if you’re doing at least 10,000 cars a month.

What locations work best for car washes?

Primarily a location that would be in an area like near a Wal-Mart, near a commercial area like a strip mall, close to a light or a stop sign on a main thoroughfare. The worst mistake anyone can make is finding a lot that’s maybe a half a block off of a main street, and has a great price, and think, well gee, I can buy that for $200,000 less than the cost of the one on the main street. You’re a half a block away from success. You have to be near a destination, in other words where people are actually shopping, going to, for instance, here there are WinCo’s, and there are, which is actually like a Safeway, but does a tremendous business, you’ve got Bi-Mart’s, etc. Anywhere around a commercial area like that you’re going to generate a lot better than you are out in an area that’s predominantly residential.

Are there lots that might be less desirable for many commercial purposes, but might be very appropriate for a tunnel car wash?

Generally that’s not true. I could show you a couple of locations here in Portland that are actually a half a block off of a main street that could’ve generated 10-12 to even 15,000 cars per month, that are only generating 3-4,000 cars per month because of visibility. No one knows it’s there. There’s another misconception. A lot of people think that washing your car is an impulse item, other people say, well, it’s a destination, you’re going there specifically to have your car washed. In the old days I think that it was possibly an impulse thing, but nowadays I believe you plan to have your car washed. Whenever I have my car washed I know that I’m going to go Wednesday morning or Saturday morning or Sunday afternoon. I’m going to have my car washed. I don’t drive by a car wash, and say oh, I think I’ll go in and have my car washed.

How can you figure out what the best products to use are, like soap or other chemicals?

The industry is pretty small. Equipment-wise there are good manufacturers, average manufacturers, and I don’t think I can name any bad manufacturers, but there are a lot of chemical companies, and the best place to find those who would be in the trade magazines which are like, Auto Laundry News, Modern Car Care, things like that, or even on the Internet, looking under car wash supplies. The big manufacturers are generally the best way to go. You’ve got Turtle Wax is a big manufacturer, serving the car wash industry, Blue Coral, those are two majors. Ecolab, which is another one that’s a giant, and of course nowadays everything is environmentally safe. Hydrofluoric acid is actually something that a lot of people have used on tires to get them cleaner, it’s a very dangerous substance. You should never use hydrofluoric acid, and it’s on it’s way out. Chlorine in the reclaim is the thing that they’ve used for years and years and years, and that’s not a good product simply because it’s hard on pumps and seals, and the it’s just not the way to go environmentally.

What are some of the more popular manufacturers of car wash equipment?

The big ones for instance are Ryko, they do a big business in rollovers. They’ve been around since about 1973. They are the ones that have developed the foam material used that everyone’s going to now. Ryko’s big. Hannah Industries, which has been purchased by Jim Coleman. Jim Coleman is a big company in Houston Texas, they’re big in self-serve. Belanger which is a big company up in Michigan, makes good equipment. Peco makes good equipment. There are a lot of good manufacturers. There is Karcher, which is German, coming out of Germany. WashTec is another one that is coming out of Europe. The biggest thing is not the equipment. Just about all the equipment will wash a car. The biggest thing to look for is the distributor. The distributor in your area is going to service your car wash, and your car wash isn’t going to break down on a Tuesday morning at 7:00 when it’s raining. It’s going to break down on Saturday morning when your cars are lined up and it’s sun-shining. So your distributor you want to be able to have him there and available, maybe not 24 hours a day, but all day long, so your distributor is more important than your equipment manufacturer.

Talk about touchless car wash systems. What do you think about these?

You can’t wash your car with strictly chemicals and water, you need friction, and the touchless in certain areas will do a real good job, it’s not going to be perfect, it’s not going to be as good as the friction wash, but in certain areas where there’s more dust and light dirt, you’re going to be OK, but up in the areas where you get a lot of dirt, where cars really get dirty, the touchless simply does not do the job that a friction will do. Still, the best friction wash you can find are the old brushes. You know it’s just like your brush that you use to scrub a pail or something. Those were the best. The only problem was that the perception was that when a customer had a car wash once a week he would see swirls in the paint, he thought that well, it’s damaging my paint. Well that wasn’t really true. Basically what that was was the bristles leaving some of the polypropylene or plastic onto the car over a period of time, and it could be buffed out. Well, from there, they went to cloth. Cloth actually did almost as good a job. Foam is the big thing now. So foam is predominantly the material used in most all the car washes.

Are there car wash franchises that are worth considering?

Personally, this is only personally, I don’t believe in franchises, for the simple reason that I had a rent-a-car franchise and it didn’t do me any good. Depending on the area again. Here in the Northwest, no, I wouldn’t have a franchise, even in California. I don’t know of any franchises that are really successful, other than there’s one car wash franchise that I know of that’s in Georgia called GooGoo. They have probably approximately 35, 40, maybe more, car washes that they’ve franchised, and they own their own also. But I don’t like paying the franchise fee. Why should I pay 5 or 6% to someone just for the name. To me, it’s not worth it. It’s just not worth paying that. And as far as the help that you get from the franchisor, I just don’t understand how they could help my car wash business, you know, locally, if they’re in Atlanta or in Los Angeles.

What are the biggest mistakes you see people make when starting a car wash?

Probably not having enough information. Not doing their due diligence and not talking to other operators. You can go and talk to an operator and as long as you’re not going to be in direct competition, they will give you some information. And then ask them a lot of questions. The other thing is don’t get locked up with one distributor right off the bat. Talk to at least two or three or four equipment manufacturers. Go to their place of business. Talk to their customers. Just do your due diligence. And the other thing is find a good architect. The architect is really important. If an architect has never built a car wash before, never designed a car wash, you don’t want to use him. The biggest thing that I see because our main business is sediment removal and odor control, is reclaim. Reclaim is really coming into its own. It’s been around forever, but what’s happening now is that an investor puts together a car wash, the car wash looks beautiful, they’re ready to build it, and then at the very end they say, oh, yeah, what about reclaim? What about reclaim tanks? Well, that’s where they make a big mistake. Either the reclaim tanks are too big or they’re either too small, they’re laid out wrong, the configuration is wrong, they don’t know much about reclaim. They’re selling equipment. And that’s their main thrust. The reclaim people that build total reclaim closed loop systems, they’re on the other end. They build the closed loops systems which is, again, another part of the industry, some states you have to have a closed loop system like parts of Florida, parts of California, down in the south, so you can reclaim all your water. You can not have any discharge water going to sewer. So you have no sewer connection. That makes it kind of tough, and that equipment is pretty expensive, starting at probably at least $20,000, going up as far as $50-60,000, if not more.

Andy Pazz is the author of How to Set Up an Express Exterior Car Wash and owner of Laguna Ltd., a company which manufactures water treatment and reclaim systems for car washes.