For some reason, I always wanted to build a self-serve car wash. Maybe it was sub-consciously related to how I washed cars at a local Lincoln Mercury dealer to put myself through college. Maybe it was because I thought it would just be an easy business. Maybe it was because I thought the entry costs were low. I really am not sure the exact reason why I always had an interest in the business, but for some reason I always had it on my “bucket list”. When my brother died at the young age of 45 back in 2002, I decided that life was short and that if I really wanted to own a car wash, I should give it a try.
One of the more memorable meetings when I started my research phase was with a local car wash equipment distributor. I met with the owners of the distributor at a large expansive board room table they had set up in their office. I had about 10-15 questions written down that I wanted answers to. Most of them were related to car wash start-up costs. As the meeting drew longer, I realized that cost for building a wash was much higher than I ever anticipated. For some reason I had a number of $300k-$400k in my mind as a reasonable overall budget for building a self-serve car wash in the Pittsburgh area (Pittsburgh real estate prices are a lot more reasonable than many other parts of the country) and at some point in the meeting we were upwards of $700k and there was still quite a few items not budgeted for. I remember leaving the meeting thinking that getting into the car wash business was a lot more risky than I originally thought and that I if I wanted to enter in to the industry that I better make sure I research what the gross revenues were for successful washes in the area. Lots of people ask me the question: “How much does it cost to build a car wash?” and my usual broad response is over $1m at a minimum.
Here were the items I budgeted for when I built my first car wash:
- Land – ($100k – $250K)
- Site Work – ($75k – $200k)
- Soft Fees Including architectural, engineering, impact, traffic studies, appraisals, loan closing costs, construction permits, etc. ($50k – $150k)
- Sewer/Water Tap-Ins – ($10k – $150k) Make sure you research this! It vary’s widely among communities and can be a deal killer.
- Site Work including earthwork, foundation, asphalt, and landscaping ($200k – $300k)
- Building Construction Including Electrical and Plumbing ($350k – $500k)
- Equipment – ($400k-$500k)
- Signage – ($15k-$25k)
- Security System – ($5k-$15k)
I did not add up the totals for a budget because they can vary widely but you can see that the costs can add up quickly and will almost always exceed $1m if you build anything worthwhile. With costs like these, it will deter many interested individuals from moving forward with their dreams of getting into the car wash business. In some respects, these higher costs are good for the industry because it makes the entry cost for getting into the business unachievable for many aspiring car wash owners and does not spread revenues over what some car wash owners think is an already diluted market.
If you are really interested in getting into starting a car wash business you should not let these costs deter you. You need to develop a business plan and forecast realistic revenues to determine whether the business makes sense to you or not. Finding financing or investment partners for projects of this size should not be ruled out as many new car wash owners take the leap each year.
Main add value’s from this blog:
What costs and what you should budget if you wanted to build a self-serve car wash from the ground up.
Buzz Glover is the author of Car Wash Business 101, a book written for people who are interested in getting into the car wash business. He has also built two self serve car washes with in-bay automatics, and bought a third wash.