Creating a Car Wash Business Plan

Before embarking on writing a business plan for				sources to help come up with this number including:
starting a car wash, a definition of what a business				Industry journals
plan is in order. A business plan is a document to				Trade groups
identify an opportunity, research why this opportunity is				Car washes in similar demographic areas
profitable and the steps needed to capitalize on the				Industry experts
opportunity. The business plan can be a formal				Census data
document or it can be written on the back of a napkin				Pricing
but the mere act of writing the idea down forces you				The effects of pricing play a large role on how your
to get the idea out of your head and on paper which				product is perceived in the marketplace. Price too low
helps find hidden business flaws and makes you think				compared to the competition and your product could
carefully about each phase of your business.				be perceived as cheap and unreliable. Price too high
Creating a business plan is something anyone can do,				with the features and benefits of your product and
even if you don’t know anything about business or				few customers come through the door. While this is a
finances. Even though the business plan is critical to				complex issue, here are a few things to keep in mind.
getting the idea off of the ground, many entrepreneurs				Make sure you can make a profit at whatever price
procrastinate when it comes to preparing a written				you are selling at.
plan. If you don’t know anything about business or				If you want to have lower costs and “get your foot
finances, this is the best time to begin learning as the				in the door” it may be better to offer discounts or
chances of your business being successful will be				coupons initially until your business is better known.
limited without this knowledge. Just as a builder won't				Don’t be afraid to charge more for your product or
begin construction without a blueprint, entrepreneurs				service than the competition if you have something of
shouldn't rush into new ventures without a plan. The old				more value to offer.
saying that “those who fail to plan, plan to fail” is				Pricing is the easiest of the marketing mix to change.
very relevant when talking about starting a business.				You may find that a large competitor will under price
SBA’s statistics claim over half of new businesses				you to ensure you can’t make a profit and your
fail in the first three years and the common factor is				car wash goes out of business.
poor planning or under-capitalization (which is also poor				Management & Employees
planning).				In this section you would describe who is going to
Getting Started				manage the business on a daily basis as well as
The first step in creating a business plan is just getting				provide strategic direction (if these positions are
started. Writing the business plan may seem				separate). Each of these people need to have a brief
overwhelming at first, but if you break the plan down				biography included as well as a resume in the
to bite sized pieces and work on one section at a time				appendix. Try to show how the experience and
won’t seem as daunting. Begin with what you				education of these people will be able to successfully
know first and describe your business and your				execute the strategy in the business plan and
product or services. Work towards the more difficult				succeed. Many times the owner may not have the
subjects such as marketing, operations and financials.				specific experience for this business, so it is very
Don’t worry about it being perfect now, just get the				important to pull their other professional experience in
concepts on paper - expand and refine later. If you get				and explain how it will make for a successful operation.
stuck on a section in the plan, skip it for now and come				Next, a brief explanation of the employees is in order
back later when you have more details.				including:
Who is your audience?				What positions need to be filled
When writing your car wash business plan, you need				When they need to be filled (This is important in
to keep in mind who your intended audience is and				developing financial projections as you may have
why you are writing the plan. Why? A plan for the				some employees come on after you start)
bank will be less interested in the exit strategy and				How much they get paid (Be sure to calculate payroll
return on investment than one for equity investors.				taxes as well, estimate 15% if not sure)
Additionally, a plan for written for internal use will be				It is also recommended to add the professional and
different than one looking for financing as a bank is not				advisors to your business. These people include:
necessarily interested in detailed operations of the				Board of directors
business.				Consultants
Structure				Accountants
Business plans tend to have a lot of elements in				Attorneys
common. While there is not a format that all business				Bankers
plans follow, there are generally accepted guidelines				Mentors
that most follow as the order in which the subjects				Operations & Location
flow are not random. The Business Description of a				The operations and location section of the plan
business plan is aimed at painting a picture of your				illustrates how you are going to make or acquire your
business and why this business will be successful. The				product and information about your business location.
Marketing, Management and Operations sections are				Operations – Explain how and where your products
researched and a strategy of how your business will				or services are made. A few points to include in your
compete and operate is developed. Last financial				plan
projections show in numbers what you explained in the				How does your car wash operate, what steps are in
business plan for the sales and expenses.				your service?
Breaking these three major sections down even				Who are your suppliers?
further, a business plan consists of six key				What are the terms and lead time for this product?
components:				Location – Location is where you will be doing
Executive Summary				business out of. If you are in the classic, I can’t get
Business Description				my location until I get a loan so I can’t finish my
Marketing				business plan scenario, list what features you are
Managers & Employees				looking at in a building along with average prices or
Operations & Location				rents and pad that number a little just in case. A few
Financial Projections				things to add:
In addition to these sections, a business plan should				Department of Transportation traffic count – most
also have a cover, title page and table of contents.				states have this information online to show how many
How Long Should Your Business Plan Be?				vehicles pass your location each day.
The answer that nobody liked in school applies to a				Building description
business plan which is, “as long as it needs to				What is the size
be”. The more complex a business or the more				Where is it located
sophisticated investors or funds requested will increase				Specific reasons for this property
the length of a plan. An average car wash business				Proximity to suppliers, roads, airports, railroads, and
plan narrative should be 4-15 pages plus financials and				shipping centers, etc.
appendix items.				Zoning
Business Plan Outline				Average utilities – Be sure to get the last 12 months
Executive Summary				from the electric company if the building had been
The executive summary is the first part of the				occupied. This could be an expensive lesson from a
business plan but is the last to be written. It gives the				dishonest landlord. If you are opening a new location,
reader a quick glance of what your business proposal				try to talk with other car wash operators in a
is about and what you are asking for. This part is				non-competitive area to get a estimate
critical as most readers will scan this section before				Add pictures to the appendix
deciding whether to read further.				Add a floor plan to the appendix
The executive summary should typically be about				Purchase price or monthly rent/lease
one-half of a page in length and include what you				Include sales/rent/lease agreement in appendix
would cover in an elevator pitch such as:				If building or renovating be sure to include quotes as
Explain the condensed version of the business				this is an area frequently underestimated in costs.
concept				Financial Projections
Product description or service proposition				Financial projections are placed at the end of your
This section should emphasize any unique features or				business plan, before the appendix but it a very critical
benefits that what is currently in the industry or area,				piece to the plan. The three must-have financial
aka why would someone buy your product over the				statements are a cash flow statement, a profit and
competition.				loss statement and a balance sheet. The information
The demographics of your market				already provided in the narrative portion of the
The Management team				business plan must match the financial projections.
When the anticipated start date is				Most financial projections are three years in length. It is
Your equity position				a good idea to include a Notes & Assumptions to
How much are you asking for				Financial Projections page to both help make sure all
Concise is the key in the executive summary. You will				of your numbers come through and provide an
go into more detail later in the business plan.				itemized list to provide clarity for the reader.
Business Description				Notes & Assumptions to Financial Projections
The purpose of the business description is to				Loans
objectively describe the car wash business details and				Break out each loan (building, equipment, inventory)
future potential include:				Amount
Mission				Interest rate
What the business does				Length
Description of products and/or services				And any monthly costs not discussed in business plan
Industry information				narrative
Business Organization				Cost of goods/inventory
Status of the business (start-up, expansion or				Advertising
purchasing)				Employee wages
Current and future goals				Insurance
Any facts or figures should be noted and sources				License & fees
included in the business plan. This information is				Miscellaneous
important should you need to defend your data and				Professional fees
assumptions. The business description is where you				Rent/property taxes
are trying to paint a picture of the potential of your				Repairs & maintenance
business along with the facts to support it. Try to inject				Supplies
energy and excitement to get the reader enthusiastic				Telephone
about the idea, without going overboard of course.				Utilities
After describing the business, it is time to describe and				Vehicle expense
additional products or services your car wash is selling.				Etc.
Keep in mind that it is important to show how your				Anything else that needs to be explained in the
products and services are better than the competition.				financials that is not in the narrative
If you don’t have a good answer than you should				Financial Projection Sections
rethink your strategy. What is it about your car wash				Startup Expenses – These are all expenses you
that is going to get the customer to change doing				will incur prior to opening your car wash. It is
business with the competition?				recommended to have quotes available or in the
Marketing				appendix for the larger items. It is also recommended
A very important part of your business plan is the				that you pad your numbers some as there will always
marketing section. Regardless of the quality of your				be unexpected expenses that were not accounted
products and your services, your business will be lost in				for.
the clutter of advertising. If you don’t know your				Sources and Uses of Funds – This section details
customers, how will they ever find you? All of this				how the loan money will be used (inventory, car wash
begins with doing some research.				equipment, repairs and improvements, working capital,
Customers: Who Is Your Market				etc) and who is providing it (bank, investor or owner).
The first step is to determine who you are going to sell				You will likely need to be injecting 20% of your own
to by identifying common characteristics of your				money and maybe more depending on the risk
market such as age, income, race, religion, education,				assessment of the business and your personal
interests and/or geographic locations. While everyone				finances.
will want to wash their car product how are you going				Cash Flows - The cash-flow statement is one of the
to effectively advertise to everyone and still make a				most important pieces of your business plan. It shows
profit? What you need to do instead is determine the				a schedule of the money coming into the business and
group or groups of people who are most likely to use				expenses that need to be paid and whether you have
your car wash services and market to them. After all				enough cash to sustain the business gained during the
you are trying to generate a positive return on your				warm month to cover the costs during the winter
marketing dollars, so use them wisely.				months. Every part of your business plan is important,
Competition				but none of it means a thing if you run out of cash.
In today's ultracompetitive marketplace, there is going				Should this number be negative, you either need to
to be competition, no matter how creative your				raise sales, reduce expenses or have more cash.
business concept is. Attempting to run a portion of				Your cash flow statement will typically be three years
your car wash business better than the competition				in length with the first year analyzing the monthly
may be a difficult challenge so it is often better to				figures and later years by quarter. Don’t be
focus on planning on being different and competing				intimidated with the cash flow statement as it is merely
with them less directly. Can you serve a particular				a future look into your checking account.
market niche such as the elderly that isn’t being				Profit & Loss – This statement, while similar to the
looked at? Can you identify a unique operations				cash flow statement but illustrated annually looks at
marketing/distribution strategy with a mobile approach?				the effects of non-cash charges such as depreciation
Even if you don’t have direct competition in your				and amortization to get an accounting overview of the
area meaning someone selling the same or similar				operations of your business.
products/services, you will have indirect competition for				Balance Sheet – The balance sheet is a summary
replacement products/services. If you indicate in your				of the value of all assets, liabilities and equity for an
plan there is no competition it will be viewed that there				organization at the end of each year. A balance sheet
is either no market for your product or you have not				is often described as a "snapshot" of a company's
done your research.				financial condition and will show the value of the
Optimally you will want information on at least three				business over time.
but no more than five competitors. List information				Personal Financial Statement – If you are looking at
about who they are, how long they have been in				bank financing every person who will have a 20% or
business, location, products or services offered,				more ownership position will need to provide a
perception on pricing, quality, etc. and compare your				personal financial statement to show how effective
advantages and disadvantages. If the information you				they are at managing your money. This statement will
are looking for is not available online, you may need to				show your assets (checking & savings accounts,
pretend you are a customer to get some of this				cd’s ira, 401K, valuables, home, vehicle, etc) as well
information.				as assets (mortgages, credit card bills, installment
Distribution - How Will You Get the Product To The				accounts, etc)
Customer: By looking at who your market and				Appendices
competition is, you will have an idea of how to get				Appendix items are various pieces of information that
your product to them. Perhaps through your research				help make your case. Include details and studies used
you will find a strategic advantage to serve the				in your business plan; for example:
customer that the competition does not.				Quotes for items over $500
Promotional Strategy				Resumes of the management team
With the above steps researched, the promotional				Industry research
strategy follows. The promotional strategy is where				Demographic data and trends
most entrepreneurs fail as they use the blanket				Maps/floorplans/blueprints of location
statement that they are going to advertise in the				Leases and contracts
newspaper, radio and/or television without thinking				Letters of support
through the process or the customer. The promotional				There is a lot to creating your business plan but will
strategy provides you a map of how you are going to				definitely make your business stronger. While it may
reach your market in the most efficient manner				seem easier to have someone else write your plan,
possible. Advertising is expensive, use it wisely.				there is no substitute to writing it yourself. This is your
Sales Projections				business and by writing it yourself you will have a
On of the more difficult areas of the business plan is				better understanding of your business and strategies
coming up with sales projections. This number is				for success. There are also many free business plan
probably going to be wrong and that’s ok. What				templates and workbooks available on the web to help
you want is a figure backed up with justifiable data.				you get started. You can use these to help get started
Just grabbing a number out of the air saying you will				creating your business plan and then modify it for your
make $300,000 won’t work. There are many				car wash business.

Sandiego Apa

Creating a Car Wash Business Plan