By Kristy Angerstien | Supervisor, Tax
When thinking an industry where independent owners and not chains manage 90% of the facilities, do car washes come to mind? It’s a fact – car wash businesses are growing at a rapid pace and have maintained independence throughout. Let’s explore the growth owners are experiencing and how Apple Growth Partners can help take the car wash industry to the next level.
Customer Volume
The car wash business has proven both short and long-term growth. Reported in the 2019 car wash industry report, the majority of car wash owners said annual car counts of 25,000+ and 12% said car counts as high as 250,000. From 1996 to 2014, the number of cars being washed massively increased by 19.26%. And, there are no signs of slowing down – industry growth is predicted to continue at an average yearly rate of 3.3%. Data shows consumers have more discretionary spending budget to allocate to routine car care, opposed to the bucket and hose in the driveway. Sales of new and used cars are rising, resulting in more cars to be washed. Car washes also positively impact the environment – professional facilities use two-thirds less water than washing at home. Environmentally-aware customers may choose to have a professional wash for water conservation.
Promising Possibilities for Owners
Driver volume has resulted in significant revenue for the car wash industry. In the US, there are 16,000 car wash establishments, which include individual locations that bring in yearly revenues of $900 million. Annual revenue of the car wash industry adds up to $48 billion. This revenue opportunity hasn’t gone unnoticed from owners and operators. As of 2017, 15% of car wash owners have owned their business for fewer than five years, indicating new owners have capitalized on the trends occurring. Yearly profits can range from $55,000 to $100,000 for self-service and $500,000 – $900,000 for full-service car washes.
Optimizing Your Car Wash
The stats are supportive of long-term growth opportunities for car wash owners. New operators are entering the business to capitalize on the trending potential. Partnering with Apple Growth Partners helps owners chart a course for success. Recognizing the increase in volume, owners should establish a customer loyalty program. Selling a pass for unlimited washes for a flat monthly fee guarantees a continuous revenue stream year-long, which can be helpful in months of lower volume. Ensuring the proper corporate structure of the car wash is critical for tax time. Designing a proper staffing model helps keep overhead costs low while providing coverage during the wash’s busiest hours. These are several examples designed by the Apple Growth Partners team of designated accountants and business advisors focused on the car wash industry. Our team is ready to maximize your car wash – contact me today to get started.