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Meticulous, detail-oriented, and a fan of working with vehicles? If your car is always the cleanest one around and you take pride in doing great work, then you could put those talents to use by opening a car detailing business. Car detailing is an exciting industry that offers some significant earning potential, and when you establish a great reputation in your local community, news about your business can quickly spread.
Car detailing businesses offer meticulous cleaning services that include a car’s exterior, interior, and underside. These services help to keep the car looking good, but they can also make a car last longer. Common services include washing and drying a car before polishing and waxing the exterior. Interior detailing usually involves vacuuming, shampooing, wiping down, and deodorizing the interior.
Detailing a car offers many benefits, making it an appealing service to many vehicle owners. Regular detailing helps to protect drivers from germs and allergens while also helping to maintain the vehicle’s condition. Vehicle owners often have a car detailed just before selling it, since a clean car has a higher resale value than a dirty vehicle.
From 2013 to 2018, the car wash and car detailing business underwent significant growth. According to IBIS World statistics, the industry experienced annual growth at a rate of 3.9 percent, and in 2018 the total revenue was $12 billion. The number of businesses also increased over this period, and by 2018, 67,382 businesses employed 219,894 people.
As the economy has improved and disposable income has increased, the auto detailing industry has also seen corresponding growth. During the 2008 recession, Americans largely held onto their vehicles, but with increased disposable income, more people are buying new vehicles – and having those vehicles detailed. In 2009, total United States auto sales were 10,431,510 for the year. In contrast, auto sales reached 17,208,748 in 2017. With more people buying new vehicles, the market for auto detailing to preserve those cars has also increased.
While many car owners once washed and detailed their cars at home, an increased awareness of the environmental impacts of auto detailing and washing has increased the demand for eco-friendly detailing services. Some auto detailers have moved away from using water entirely, opting for waterless products, instead. Other detailers still use water but prioritize water conservation trends and methods in their businesses.
Who is the target market for your car detailing business?
Target markets can vary according to location and the car detailing business’ marketing. Some car detailers may find an ideal market in used car dealers, offering their services to these businesses and detailing any used cars that come into the lot. Other detailers may market their services specifically for luxury car owners, while other detailers may take a more general approach in marketing to the everyday driver who just doesn’t have time to detail their own vehicle.
High earning households are generally much more likely to utilize car detailing services than lower earning households as they tend to have higher disposable income, less time and more expensive vehicles.
Skills, experience, and education useful in running a car detailing business
Starting a car detailing business doesn’t require a business degree, but certain skills, training and experiences will increase the chance of your business being a success.
Attention to detail. Perhaps the most important skill to have in this industry is the ability to pay attention to and notice little details. Car detailing is all about perfection, so paying attention to the little things is very important in performing quality work.
Understanding of detailing techniques. Some experience in car detailing is necessary to start up an independent business. Knowledge of the chemicals and detailing techniques used will help ensure that the business’ work is professional and will please customers.
Vehicle knowledge. When specializing in higher-end cars, some vehicle knowledge is helpful and can make customers feel more confident in entrusting their vehicles to the business for detailing.
Time management skills. Adherence to deadlines and time management skills can increase a business’ productivity while keeping customers satisfied with the detailing timeline.
Marketing skills. Some marketing skills and talents will benefit any detailing business owner. Even if an owner just manages their social media, a personal touch on marketing can help to portray the business in a positive light and bring in new customers.
Costs to Start a Car Wash
One major benefit to starting a detailing business is that it carries relatively low startup costs when compared to other types of businesses. While some car detailers operate out of a garage or other space, many detailers begin with a mobile business which eliminates the need to purchase or rent property and facilities. You could potentially even operate out of your driveway or home garage. Expect to spend between $5,000 and $25,000 on startup supplies and equipment.
Common startup costs for a car detailing business include:
- Auto detailing tools
- Polishes, waxes, and shampoos
- Supplies such as rags, paper towels, buckets, and sponges
- A trailer (for a mobile operation)
Steps to Starting a Car Detailing Business
Step 1. Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Step 2. Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC. Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements.
Related: Comparison of Business Entities
Step 3. Select your Location
For businesses with a physical location, leasing a garage or other space is a necessary expense. Having a physical location offers the convenience of saving on driving time in between jobs while increasing efficiency and the number of jobs a business can take on. Lease costs will vary according to location and the size of the space available. In addition to budgeting for a lease, be sure to account for some modifications, like improved lighting and accommodations for the detailing equipment.
Related: Choosing a business location
Step 4. Apply for Business Licenses and Permits
The owner of a detailing business must obtain various licenses and permits before starting the business. These requirements can vary depending on location; a local town hall or business administration office can advise you about the permits that you’ll need.
California, for instance, requires all businesses that offer car washing and polishing in the state to register with the California Department of Industrial Relations.
Step 5. Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a car detailing business is another. While the cost to start an auto detailing business isn’t huge, if funding is needed, it may be difficult to get. In order to get a loan, the borrower(s) will need to have good credit and be able invest 15-25% of their money towards the total start-up costs.
Step 6. Get your Marketing Plan in Place
Marketing costs will vary according to the marketing methods used, and their volume. Common types of marketing for car detailing businesses includes the use of flyers, direct mail, print advertising, and social media. The more that a business owner can do themselves, the more money they can save.
Step 7. Get Insurance
An auto detailing business will require a few different types of insurance policies:
- Commercial liability insurance covers the business in case a detailer ever damages a customer’s car. It also provides coverage in case a customer is ever hurt while at the business’ garage or facility.
- Commercial property insurance can reimburse business owners for the cost of their detailing equipment if that equipment is ever damaged or destroyed in an event like a fire.
- Workers comp insurance is required for any detailing business that hires employees, and can pay for lost wages or medical bills if an employee is hurt while working.
- Auto insurance is necessary for mobile detailing businesses and covers any business vehicles or trailers.
Many factors affect the costs of these insurance policies, and your business’ location, the policy deductible, policy coverage, and value of your equipment will all influence the insurance premium. To find the best policy for your business, request quotes from a number of different companies and consider how they stack up in terms of their deductibles, coverage, and premiums.
Step 8. Hiring Employees
Depending on the size and success of a detailing business, staff may be needed to keep up with the increasing demand. According to PayScale, entry-level automobile detailers earn about $10.21 per hour. Detailers who have between one and four years of experience average $10.85 an hour, while mid-year detailers with five to nine years of experience earn about $12.18 per hour. Experienced auto detailers with 10 to 19 years of experience earn about $12.95 per hour.
Hiring employees means additional expenses such as workers comp insurance, paid time off, and contributions to unemployment insurance.
The largest expense for most vehicle detailers is labor, so be sure to monitor the amount of time staff spend on customer’s vehicles.
Related: Hiring your first employee
Every state has specific requirements and regulations when starting a business. Select your state below to find the guide to starting a business in your state.
How much can you potentially make owning a car detailing business?
The annual income and profits of a car detailing business will depend on location, clientele, and the number of hours worked, as well as the business’ age and existing roster of clients. Simply Hired indicates that owners of mobile detailing businesses earn an average annual salary of $80,000.
Things to consider before starting a car detailing business
Doing detailing well takes some talent, and you’ll be working with highly valuable cars, so it’s best to gain some experience either working as a detailer or working as an apprentice with a detailer. Understanding the specific materials that you’re working with and the chemicals that you’re using can help you to get the best results and can also help to avoid damaging a vehicle.
Depending on the setup of a detailing business, utility bills may be a significant expense. Because a typical garden hose ca put out up to 10 gallons of water in a minute, you could easily go through 100 gallons of water during a 10-minute car wash. Using an automatic shutoff nozzle can reduce the water consumption, but it’s still important to budget for this potential expense.
Returning customers are valuable to a car detailing business, so consider establishing a loyalty rewards program to encourage repeat customers. A referral rewards program can also help to build clientele as your existing customers refer your business to their friends. If you’re looking for a business that you can start on a part-time basis, a mobile car detailing business offers that flexibility and makes for an easier entry into business ownership than some traditional retail businesses do.