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The Complete How­To Guide forStarting a Car WashBy Katie Cubitt

What you need to know about opening your own car wash in South Africa.

We all love to have a clean car. Shiny wheels, theperfectly clear windows and not a streak in sight. Intoday’s fast paced world we often don’t have the timeto do it ourselves – and when we do, there are otherthings that quickly fill that time.

And so we pop off to the local car wash to have it doneand ticked off the list so that we can move on to otherthings.

How often have you sat considering owning a carwash of your own while you’re waiting for your car tobe done? If it’s more than once, then maybe you

should consider taking the leap and starting a car wash business. Below are all the steps andtricks of the trade that you will need to launch your new car wash business.

How to Choose What Type of Car Wash to Open

The first decision that needs to be made involvesdeciding between a franchise and anindependent business model. Both of these comewith their own set of risks and rewards – all ofwhich have been set out in the table below.

The decision between an independent venture and a franchise opportunity must be a personalchoice based on your personality.

If however, you are better at working within the guidelines and like the freedom of someoneelse, in this case the parent company, making the decisions for you – then starting a franchiseis the way forward.

Make sure when investigating the car wash franchise you are interested in, that you choose arecognisable brand with a good reputation in order to get the full benefit of buying into afranchise.

With both franchising and independent ventures, you now also have the choice of starting amobile car wash, instead of a fixed full time entity. This also comes with pros and cons andthese are listed below.

In general – if you are someone who likes to blaze your own trail and like to havecomplete and utter control over every aspect of your business, then starting a car

wash, or any business, as an independent is the way to go for you.

Steps for Registering a Car Wash Business

Here are the main steps for registering your new small to medium enterprise:

Register your business with the Companies and Intellectual Property Commission (CIPC). Thisinvolves lodging a Notice of Incorporation (CoR 14.1) and a Memorandum of Incorporation(CoR 15.1 A­E). These forms are available at www.cipc.co.za. They take roughly five to sevendays.

Alternatively, it is possible to use a service that registers your company for you with the CIPCsuch as this one. These services do of course have their own fees attached.

Thereafter, you must open a bank account for your business. Depending on the correctness ofthe application forms, this only takes a day or two and is free of charge.

For an SME, earning less than a million rand a year – the only form that SARS requires is theIT77C that must be accompanied by a certified copy of your ID and a copy of the company’sregistration documentation. The IT77C form is available from www.sars.gov.za. If youremployees aged 24 – 65 will be earning more than R5000 per month, then you will need toregister for UIF and PAYE.

To register for unemployment insurance – visit www.labour.gov.za for more information on theprocess and for the forms.

The final step that takes place in conjunction with the step above is to cover your employees interms of occupational injuries, diseases or death in terms of the Compensation Fund. This isoptional. These forms are available from www.labour.gov.za

In terms of the permits and licenses you will need to start a car wash you need to first assesswhether or not the premise you want to work from is purely residential or if it has been zoned toallow it to be a business property.

Furthermore, to operate a car wash you might need to apply for a permit under the waterrestriction bylaws depending on your municipality and the province you are in. For moreinformation on the permits possibly required visit the Department of Water Affairs website.

Car Wash Funding Options

Before you even begin to look for funding, you will at this point need to create a detailedbusiness plan. No institution will give you funding without one. For instructions on how to put abusiness plan together watch this video on business plans for dummies .

Sourcing funding for a start­up can be a bit of a challenge if you do not know where to go orwhat they are expecting of you. Here is a quick rundown of what you would need to prepare inorder to encourage others, such as financial institutions, to give you the funding you need tostart your venture.

Broadly speaking there are four main options available to entrepreneurs starting their ownbusinesses. These are: loans from financial institutions, own capital, investors and grants.Grants usually come from the government and are loans that you won’t have to repay, butgrants come with strict guidelines on how the funds may be used.

It is always preferable to start with the bank that you already do business with – that way theyhave all your information and know your financial habits and behaviours as well as your creditrecord. Another option is to look at credit unions.

When applying for funding here are a few tricks to help you get the cash:

Make sure that you have a detailed business plan that shows how the funds will be used and spent. It is

highly necessary for you to have a detailed knowledge of the costs involved in your business – from supplies to

staff to overheads and equipment.

Know about the industry and the market you are entering. It can be beneficial for you todo a market analysis.You will more than likely have to use your personal assets and wealth as collateral for

your new business.It will show your dedication and commitment if you use your own capital to place an initial

investment. In some cases, it is required for you to do so – such as with SEFA – the SmallEnterprise Finance Agency who require a 10% personal initial investment.

Choosing a Location for Your Car Wash

With a fixed location – most of your business will come from ‘walk ins’. It is essential to yourbusiness that your car wash, or any service based business, is in a location that is convenient.

More often than not people do not specifically set out to go have their cars washed but ratherend up having it done because it was easily available and they had the time.

Here are a few tips of choosing a successful location:

Being near a shopping area is always preferable

Heavily populated residential areas with high traffic volumes are better for businessThe site must be easily accessible from the roadIt must be easy for customers to get back onto the road once their car is cleanHighly visibleA decent size car wash has more than one washing and drying bay, there needs to be

enough space for these as well as a waiting areaEnough space for cars to queueIt is also in your interest to pick a location that will allow for expansions as your business

grows.

In South African law, verbal leases can be upheld in court, but it is always best to get theagreement in writing.

In clear and concise language that both parties can understand, make sure that your leasecovers any changes you may or may not make both structurally and superficially.

Make sure you know how your rental will be calculated – it is usually quoted in Rands persquare metre per month, excluding VAT for commercial and industrial properties in SouthAfrica. Make sure you both agree on what costs will be covered by your rental and what costsyou will incur (i.e. electricity).

Know under what circumstances the lease may be voided by either party. And finally, knowwho is liable for damages to the property or for instances of burglary.

Car Wash Insurance and Liability Cover

First off, for new owners the importance of a disclaimer needs to be highlighted. A disclaimercan exempt car wash owners from covering the costs of repairing vehicles that are damagedon their premise but they do not cover gross negligence on behalf of the business owner.

It is the responsibility of the owner to ensure that all machinery and equipment is wellmaintained and is regularly checked for foreign objects that could cause damage. It is also theresponsibility of the owner to make absolutely sure that all cleaning products used throughoutthe process are car­friendly.

Furthermore, public liability cover is not enough. Property in the custody, care or control of thecar wash owner is excluded from cover under the public liability section. The correct policy tohave in place is the Motor Traders Internal section.

Your level of insurance coverage will have to be higher if you and your employees are the onesdriving and moving the cars.

It is important that you as the owner of the car wash to have general liability insurance thatcovers:

Medical expenses to yourself and your employees in case of injury

Custody, care and control coverageEquipment break downDamage to cars – you will need to set this limit for your policyIt is also important (especially if you have bought the property) that you have property

insurance that will cover your premise in terms of theft, damage, fire, flooding etc.

Leonard Degee, who has been in the independent car wash industry for 12 years, knows thatin order for his car wash to continue successfully, it is important that only management handlesall the cars.

Not only does it make the insurance coverage easier and cheaper, but customers are usuallyhappier knowing that the person who might be moving their car is more accountable.

Car Wash Equipment and Supplies

Obviously the equipment you need will depend on the type of car wash you open.

In some cases, all you’ll need is a bucket, clean water, soap and some good cloths – and thewillingness to approach people to offer your services. But if you would like to open a moreprofessional business and reach a broader market then there is some equipment that you’llneed.

If you are opening a franchise, the parent company or franchisor will be making the decisionsfor you. If you are opening an independent location or mobile business then you will need tosource the necessary equipment.

The basic equipment needed for a manual car wash is:

High pressure system

Oil/water separation UnitDrainage unitIndustrial vacuum cleaner with wet upholstery cleaning optionPossibly an upholstery cleanerDepending on the products you choose you might need a foam attachment on your hose.

Alongside your basic equipment you will also need your location to have:

Concrete wash bay slab

Pump roomDrying bayAncillary Walling and Paving

The Basic equipment you will need for a mobile car wash is:

Pressure washer hose with a compressor

An industrial hose with nozzle and gunA good sized tank in the back of the truck/van or even trailerA generator (remember to keep extra fuel handy)A powerful vacuum cleaner

For cleaning products and supplies, you have a multitude of varieties to choose from. If you areinclined to go the eco­friend route, there are even ranges of waterless cleaning solutions.

The cleaning product basics you would need are:

Car soaps

Metal polishPlastic polishCar waxGlass cleanerFabric shampooLeather cleanersDetergent for the pedalsAnd then sponges, cloths, brushes – preferably suitable for use on all cars.

Here are some suppliers of equipment and cleaning products:

Eco Wash – http://www.ecowash.co.za/

Hurricane Car Wash – http://www.hurricanecarwash.co.za/about.htmlKwik Car Wash – http://www.kwikcarwash.co.za/page2.htmEco D Wash – http://www.ecodwash.com/Durawash – http://www.durawash.co.za/Dynachem – http://www.dynachem.co.za/Geowash South Africa (for mobile car wash systems) – www.geowash.co.za

Keep all equipment in good working condition with regular check­ups. For an easier resale,make sure you have detailed maintenance records on all equipment.

In Degee’s car wash, they purchase R3000 worth of stock every month – which covers the360 or so cars that they clean.

Car Wash Marketing and Branding Basics

Branding and marketing are two very different concepts, both of which are highly important tothe effectiveness of your business.

Simply put, branding is your promise to your customers; marketing is communicating thatpromise to them.

In order to bring the customers to you, there are a couple of things you could do. These involveconnecting on an emotional level, staying relevant and flexible, committing to the communityyou work in, staying visible and finally aligning your marketing tactics with your brand strategy.

The biggest secret to marketing is being able to differentiate yourself from your competitors.Brand Strategy Insider is an online resource for branding and marketing and they list 50 waysto differentiate your brand.

For the car wash business here are the applicable ones:

Expand your appeal

Rewrite the experienceBreak away from conventional wisdomBe the expertShare values with your customersEngage the sensesFocus on aestheticsTreat people differently than your competitors do (treat them better)

When you are implementing these values in your brand, make sure that they go deeper thanjust your aims. Make these things that make you different the foundation of your business.

That means engraving these changes in the mission statement and instilling it in your staff. It’simportant to note that your staff are your brand ambassadors. A good service experiencemeans that people will come back and more than that, they will tell others about you too. Wordof mouth is a powerful tool in launching a new business.

Degee says that the best marketing strategy they have is their car wash’s visibility.

In terms of marketing schemes available to you as a new business owner, you have a coupleof easy options.

Available marketing options:

Keep the conversation active with your customers

FlyersCustomer databases so that you can text or email them your specials (these must be opt

in)SignagePostersAdvertisements in local papers and on local sitesPromotionsCouponsSpecialsDiscountsAlways squash any bad word of mouth by proving the oppositeConsider loyalty reward programmes to encourage repeat customers

Hiring and Managing Your Car Wash Staff

“Good management and good staff is the most important thing,” says Degee. With your staffoften handling the money, it is easy for untrustworthy staff to “slip it into their pocket.”

If you open a bigger operation than just yourself, or if you are needed to expand your businessas it grows, then you will need to hire staff. Because you are in the service delivery industry,you need to remember that your staff needs to treat your customers well – as do you.

To this effect, hire people that are

Polite

FriendlyPunctualEfficientHave a good sense of service delivery.

The number of people you hire depends on your expected workload. The more washing anddrying bays you have, the more people you will need. You also need to consider how manydays of the week you are open and how many hours a day.

Obviously, if you want to go the more automated route with a machine run conveyor system,then the need for physical staff will be less.

How to Set You Set Your Prices?

If you are going to give a variety of different services then you should have options for allbudgets and time frames to suit the biggest market possible.

As with any service industry business – you need to have competitive prices for the servicesthat you offer. It’s important to do some market research in your area as to what yourcompetitors are charging for which services. People will pay a little more if the service that they

Make sure your staff is reliable and Degee advises that you need to keep theft aslow as you possibly can.

Katie Cubitt completed an internship with Entrepreneur Magazine in 2014. She is a final year Journalism and

Linguistics student at the University of Johannesburg.

receive is outstanding – but the quality of your work must justify the price.

Important factors to consider:

The cost of your cleaning supplies

Your overhead costsThe amount of cars you can do in an hourThe number of staff members you haveYour working hours for the weekCompetitor prices for similar servicesThe type of area you are in (residential, urban, rural, business?)

For a mobile car wash it is important to consider many of the same factors including fuel priceand distance travelled. In general, the cost of a mobile car wash service is higher than that of acar wash that a patron will go to because of the added convenience factor for the customer.

When deciding on prices for a mobile business, you will once again need to do current marketresearch into what your competitors are charging.

To end off, it is important that you and your staff do a good job on the cars that you clean. Thebest way to get repeat customers is to supply the ones you have with an amazing service. Foran in­depth tutorial on how to professionally clean a car – watch this video.

Advice from Car Wash Pros

Degee offers a few tips for an entrepreneur starting his own car wash.

Trustworthy staff is hard to find. Sort that out before anything else.

Sometimes, the easiest way to bring in new staff is through our existing staff.A high turnover rate brings the possibility of more theft – try keeping good staff for as long

as possible.

For the International Carwash Association visit www.carwash.org.

Apr 29, 2014

Katie Cubitt