Avoiding the Pitfalls of Building a Carwash

Editor’s Note: This is the first in a three-part series examining some of the challenges and business dangers that operators face when entering the carwash business. Read Part 2 and Part 3.

Going into business for oneself can be a daunting and imposing mission. The journey can be rife with setbacks, monetary and logistical challenges, and deceitful business people who are quick to take advantage of people blinded by eagerness and inexperience. The goal of this series is to eliminate the possibilities (or at least make it difficult) for carwash buyers to be misled by unscrupulous sellers. Carwash dreams should become a reality not a catastrophe.

The following is a true story, although the names have been altered to protect those involved. It recounts the beginning stages of two people embarking on a journey toward entrepreneurship.

The Dream

Mike and Jill long dreamed of owning their own business. Both worked hard in their respective professions but came to the conclusion that working for others would not provide them with the long-term security they desired or the opportunity to be their own boss. Together, they aggressively saved money and created a significant net worth that could be used to fund their dream.

Like many others, they believed strongly that the risk-reward of being an entrepreneur was right for their future. They discussed their goals and aspirations, and began to identify and research business ventures that suited their long-range plan for independence and financial success.

Neither partner was skilled in a particular retail field so they kept their search aimed at businesses that would provide a quick learning curve, as well as those that would be physically and intellectually fun and challenging.

The first decision they made was to find a business that would enable them to remain in the area in which they were living. They calculated that for the first or second year, both should maintain their current employment until the business was off the ground. Jill studied the local market to determine what services were desirable and underserved. They investigated franchises in the food, service and automotive industries, as well as others that met their general criteria. They also observed similar operations in and around their market to see what they liked or disliked.

One thing that became clear to Mike and Jill during their investigation was the importance of creating wealth through the ownership of real estate. Accordingly, they eliminated any opportunities that would preclude them from land ownership. Thus, businesses in leased facilities were dropped from consideration.

As the search narrowed, a number of businesses in the automotive field kept coming to the surface, including quick lubes, muffler shops, auto repair and carwashes.

Jill and Mike studied the existing carwash installations in their area. As they became more interested in the business, they began taking road trips to other communities to “wash” their vehicle and talk to owners. Road trips began to expand and soon included regional and national conferences and trade shows.

Once they set their sights squarely on carwashing, they devoured every book, magazine article and trade show that could help them learn about the industry. It was clear that the carwash industry met every business criteria they had established. Now, however, the questions of who, what, where and how replaced the initial question of which business it would be.

They started to see how in starting a carwash business, the answer to one question often leads to dozens more queries. Discovering the type of business that meets your career goals is one thing; figuring out all of the logistics, carwash segmentation, site selection, permits, equipment and other necessities is quite different.

How to go about fulfilling their dream was somewhat of a mystery. They understood, with certainty, that the key element to whatever carwash business model they chose would be the selection of land. Not just any land, but land that was properly zoned and permitted for a carwash. Property that met all the criteria they had learned about through their due diligence and research.

So the search began. Mike and Jill knew the general area where they wanted the carwash to be. They had some preconceived idea as to the type of carwash that appealed to them, but other than that, they didn’t have a clue.

The next steps took them on an odyssey of more than three years. As it turned out, finding a good location that