The Car Wash Industry, A Great Place to Invest

As entrepreneurs consider their options on what industry to invest in, the Car Wash industry is now more appealing than ever.  With a steady growth trajectory, this $33 billion industry is growth minded and full of excitement.  The payoff is definitely worth the challenge. Many car wash operations are also becoming known as “experiences” with creative themes, architecture, and innovative technology.  Car wash owners are dialing into the passion and finding that running a successful car wash can be a business they not only enjoy, but thrive at. 

According to Davidson Capital Advisors LLC Car Wash Industry Report, despite a downturn in industry performance due to COVID, over the next 5 years after 2021, car wash industry revenue is expected to increase at an annualized rate of 2%, including 9.4% growth in 2021 alone.  In addition, demand for services provided by Car Wash and Auto Detailing is expected to increase over the next five years.  It is believed that revenue growth will be bolstered by rising disposable income boosting spending on discretionary services such as car washing. 

Profitability of individual locations is determined by strategy, planning and clear direction with efficient equipment, local appeal and unlimited wash membership offerings.  Adding to the desirability of consumers to get their cars washed professionally is the fairly recent environmental awareness that professional car washes typically use less than one third of the water used by residential car washing, and car wash operations have the ability to recycle their water!  Fun themes and building concepts tied in with events and local community participation give car wash owners the opportunity to become landmark businesses.   

The investment in a car wash operation includes not only the real estate, building and equipment but now entrepreneurs are also investing in technology that hadn’t existed previously – this game changer allow entrepreneurs tech savvy and novice to enjoy access to business system data from any location.  This kind of access available now is instrumental in tracking car counts, chemical usage, memberships, promotions, sophisticated marketing tactics, and overall efficiency for maximizing profitability.  

There are also a variety of car wash operation business models to choose from including Self-Serve, In-Bay Automatic (IBA), Express Exterior (EE), Full-Serve, and Flex Serve.  Determining which operation model is right for you will depend largely on the size of workforce you want to maintain for the location, the size of property, proximity to key market (location), and desired investment level.  The rise in automation has given a boost to the express exterior model.  

While owning a car wash can be an entrepreneur’s realized dream, success takes planning and due diligence as there can be a lot to learn.  We recommend doing a pro forma analysis as well as getting a consultant to understand all of the risks and benefits. We also believe that it is important to start thinking about technology like POS and marketing as the plan is being developed.  We hope to see you at one of the upcoming car wash shows!   

February 27 – March 1, 2022: The SCWA Convention & Expo – Booth #205  

May 9 – May 11, 2022: The Car Wash Show – Booth #1401