Car Wash photo

Car Washes: Selecting the Right Business Model

As long as there are cars, there’ll be car washes. Many people who own (and have owned) car washes have done very well with them. And since it’s a highly fragmented industry (only 15% are owned by major chains) most of those who’ve made real money in the business have done it with one or a small number of stores.

Anyone interested in owning a car wash, however, should understand that there are four basic types. And it’s important that the investor match his (or her) expectations, limitations and capabilities with the right type before they start looking at specific investments. Otherwise, you can waste a lot of time or, worse yet, you end up getting excited and buying something that’s a bad fit.

Notwithstanding that there are variations and hybrids, most washes fall into one of four classifications: Full service, conveyor, in-bay automatics and self-serve.

At a full-service car wash, customers generally exit the vehicle and when it’s returned a few minutes later, both the exterior and the interior are clean. Because of this, these washes can charge more and, on average, generate the highest annual revenue. They’re also the most labor intensive and, consequently, the most expensive and complicated to operate.

With conveyor washes (or tunnel washes), customers drive onto a moving conveyor and remain in their cars while the vehicle is pulled through various stages of the cleaner. These are external-only washes. If the customer wants the interior cleaned, they generally have to do it themselves. Although many conveyor operators offer customers free access to self-serve vacuum equipment as part of the wash price.

In-bay automatic washes are exterior-only as well. The difference is that there’s no conveyor. Instead, vehicles are stationary. It’s the washing equipment that moves, automatically, over and around the vehicle. You see these kinds of washes as stand alone business and as ancillary services at gas stations.

Finally, there are self-service washes. Customers pull into an open bay, exit their vehicles, insert coins into a box then wash their own vehicles with hand-held wands and brushes. These are the least expensive to own and operate. They also generate least revenue.

As investments, full-service washes require people, onsite, in order to operate. The fact that you have employees adds complexity and expense, which is fine, but that means full service washes are not ideal investments for absentee owners. Nor are they ideal for owners who want to manage their own business but not intensely, full-time, everyday.

Absentee owners (and owners who want to manage but maybe on a part-time basis) are much better suited for conveyor, in-bay automatic or self-service washes. Of these, the latter two—in-bay automatics and self-service—tend to require least onsite time and effort.

So, before you start looking at specific businesses, identify the business type that fits you best.