Are you looking for the fast track to starting your business? You want to make sure you hit all the high points but don’t get bogged down in too many fine points that lead you nowhere, right? Then read this guide, and get your business running in no time.
The following topics are covered in this guide:
- Start with a viable idea
- Determine ownership
- Get the agreement in writing
- Name the business
- Think about the initial sales forecast
- Create an initial expense budget
- Estimate starting costs
- Plan your marketing strategy
- Develop your look and feel
- Start building your website
- Think about how you’re going to get paid
- Try making a sale
- Get an insurance policy
- Build your dream team
- Think about your business’s location
- Set up your accounts
- Create the legal documents
- Start hiring
- Get funding
- Think about opening day
- Start your business
1. Start with a viable idea
Start thinking about whether your core idea makes a viable business. How do you know? Well, honestly, you don’t always. It helps to take a step back, try to be honest and objective with yourself, and ask these questions:
- Does anybody need (or want) what we’re going to be selling? How bad is the need, or how much do they want it? Think about it in common sense terms. Vigorous market research will come later.
- Will they pay for it? While they say people will beat a path to your door for a better mousetrap, that’s not always true. Think about it in your case.
- Are they paying for something else, now, already? Can we go from that to honestly believing they’ll pay for what you’re going to offer?
- How will you focus? Do you have a strategy, or are you planning to do everything for everybody?
The answers to these questions may seem obvious, but the point of this exercise is to give yourself a reality check. Essentially, you’re asking whether there’s a market for your product or service. If you’re laying out a lot of money, and especially if that’s somebody else’s money (like investors), it’s worth it to do the background research.
2. Determine ownership
There are no formulas for ownership, and it may seem awkward at first, but if you’re partnering with someone, it’s a thousand times easier to do it now than to wait until after the money starts flowing.
Determine the percentage of ownership, who does what, whose idea it was and how much that matters. There are no formulas for ownership. The closest thing to it is money spent, especially if you add in time spent (so-called sweat equity) and work that into a money value.
It’s extremely hard to value the original idea – I say the idea has very little real value, because it’s the work that matters. You have to talk through this. For now, talk about it first, and leave it to settle for tomorrow. Now that you have mulled over the potential legal issues surrounding ownership, it’s time to get concrete. Today, get a draft of the agreement in writing.
3. Get the agreement in writing
We don’t mean go to the attorney, but we do mean write down the main points of your agreement with the other people involved.
You don’t need formal legal language. That will come later (actually, Step 17). What you want is a simple, plain agreement: Percentage of ownership, money invested, time invested and who owns what.
4. Name the business
That might be just using your own name, but usually it’s more than that, including not only coming up with the ideas, but also checking them for availability, and registering the name to make it legally yours.
You don’t have to make it final, at least not yet (you will later, Step 17 again). Start with the ideas, though, and start thinking about it.
Many people misunderstand what you can and can’t do with names. You can waste a lot of time with those misunderstandings. Some people dread the forecasting, but your business won’t succeed without it. How can you estimate expenses without knowing sales? How can you estimate your initial cash needs, as part of your starting costs, without knowing sales? A lot of people think sales forecasting is some highly sophisticated scientific thing they don’t know how to do.
5. Think about the initial sales forecast
Don’t worry; back here in the real world, a sales forecast is an educated guess. How can you forecast something brand new? Break it down into pieces. Lay it out onto a spreadsheet over 12 months and make your estimates for each month.
Think about how many tables, how many stalls, how many hours? How much per each? Multiply those units by the rands per unit, and you have a sales forecast. Like your sales forecast, lay out a spreadsheet with rows on the left, months along the columns and a sum at the bottom to come up with an initial expense budget. Think about rent, utilities, marketing costs and payroll.
6. Create an initial expense budget
Note: remember to include what you’re going to pay yourself.
7. Estimate starting costs
Start this with two simple lists: Expenses you’ll incur before you start, and the things (assets) you’ll need to have. Expenses are things like legal costs, fixing up the location, setting up your website and so on. Assets are the things (inventory) you’re going to sell.
The harder part is estimating how much money you need to have in the bank, to support the company through the normal drain period during the early cash-negative days.
You have to lay this out month by month, comparing your sales to your expenses, watching the way the money goes in and out. Remember, in most business-to-business settings, you have to wait to get paid.
Think about your target market. Imagine a hypothetical, ideal customer. Determine his or her age, gender, job, favourite media and family situation. It’s important to know your customer well.
8. Plan your marketing strategy
What’s your message? Can you say it in a single sentence? What if you have just one sentence that your customers will listen to? Where would you send that message? How would you reach them?
Think about your marketing strategy and implementation details. Take the time to go through a short but focused marketing plan to make sure you understand what it will take to market your business.
9. Develop your look and feel
Start developing a sense of the look and feel of your company as your buyers will see it. What will your logo look like? What sense will it have to convey? Old-fashioned? Trustworthy? Leading edge? Everybody has a brand. What will yours be? How will you get that idea across to customers and potential customers? Develop your look and feel with logos, signs, letterhead and graphic standards. These are your branding essentials, and you need to have them in place before you get much further.
10. Start building your website
Have you started your website already? Have you been thinking about it? Today’s the day to get going with that. If you’re building a Web 2.0 application or any website that’s core to your business, then you might have to settle for simply having begun by the end of the three weeks.
For most businesses, you can have a website built very quickly. Think about the basic elements of your website, and at least get a site up with basic information about you, your business, your products and your services.
These days there are some good shortcuts available: Take a look at TypePad, WordPress and blogger platforms, for example. These were built for blogging but can apply to many small sites, with little to no formatting work. Think about how your customers will pay you. If you’re going to be selling to consumers, then you probably want to establish a merchant account so you can accept credit cards.
Be warned – there are a few mistakes start-ups make when it comes to designing their websites. Find out more about them here.
11. Think about how you’re going to get paid
These days, because of the online suppliers, there are a lot more options. In the old days you had to go straight to your favourite bank, which had a detailed and time-consuming process.
These days, you have the option of setting yourself up with some web stores (like Amazon, Yahoo! and others) that can handle that part of it for you. If you’re selling to businesses, then think about invoices and credit policies for business customers. There’s no underestimating how important getting paid is.
12. Try making a sale
This is where you get to make sure that people want to buy what you’re selling. Even if you can’t make a sale, because things aren’t ready, talk somebody through it.Have you been able to make a sale yet? Maybe you should take today to peddle your goods. Even though you’re not fully established yet, lots of businesses (maybe most of them) start selling before they’re fully launched.
The selling will continue for as long as your business is open, but we wanted to include it here as well because so many businesses are born at the moment the first customer says “yes”.
13. Get an insurance policy
Take time to talk to an insurance broker and get your business insurance started. These days, you can do a lot of research or even do the whole thing online. And if not, remember the old-fashioned telephone style of finding the right people.
Talk to any insurance broker you can think of, ask some questions, and if he or she isn’t the right one, ask who else you should talk to. Find the right person by asking the wrong person who else you should talk to.
In the doing, you’ll find out what kinds of insurance are appropriate for the type of business you’re starting.
14. Build your dream team
Have you been thinking about how to build your team? Do you know the people you want to bring on? It’s time to start ironing down the team and the employees, and start the recruiting process. Depending on your specifics, you’ll probably need job descriptions, and you’ll need to place ads on the right websites.
Start thinking about your employee list. Who will you need to help you out when you actually open for business? Will it be just you and your business partner? Do you need to hire service people? Drivers? Designers?
To get started, take another look at the financial planning you did in steps 1-7, see who you can afford to hire and start looking. Most people know they’re either going to work out of their home or they know where their office will be. They’re considering the right location, how it should look, where it should be, what else is nearby, and so on.
15. Think about your business’s location
Even if it’s a home office, you’ve probably been thinking about it. Now’s the time to make sure you’re set up. Desk, computer, telephone, Internet, quiet if you need it, view or not, the whole nine yards.
For a retail shop, workshop or office space, if you haven’t done so already, start looking. It’s almost time to make a decision.
There are brokers to help, and they won’t charge you because they get their commission from the landlords (which you should keep in mind as you deal with them because it’s always good to remember who’s paying). Find a broker who’ll work with you; one who listens to you about what you want and don’t want.
Today take steps to establish the location, whether it’s simply adding desks and phones in your home office or making calls to revamp a restaurant or manufacturing plant. For some people and businesses, this takes more than three weeks. Sometimes you can’t even lock in the location you want in that time. But start planning the office space in which you want to work, as this can create the most lag time.
16. Set up your accounts
With some good accounting software, you can keep track of every transaction – every cheque, each invoice you receive and those you send out.
Keep careful track of spending and invoice categories, and before you know it, you’re doing the bookkeeping. The best way to choose your new accounting software is to check with your bank so your systems will be compatible.
That will save you endless frustration with inputting records.
17. Create the legal documents
Way back in Stage 1, you got together with the others involved and wrote down your agreements on who is supposed to own how much of the business, who does what and who is putting in how much money. And you started looking at possible names for the business. Today, get it locked in by creating the legal entity online talking to an attorney or both.
Do yourself a favour, though, before you start the attorney’s meter running: Make sure you understand the basic trade-offs, so you can spend the billable attorney time making the right choices, rather than just understanding the options. We don’t recommend setting up your business without an attorney (online or not), but if you get informed first, you’ll reduce the expense.
18. Start hiring
You’re nearing the end of your three-week start-up. Just three steps left, so if you’re going to have employees, it’s time to hire them or at least begin hiring. You started the recruiting process last week, so you should have some people in mind. Don’t do job interviews without first going over a simple review of what you can and can’t say.
A lot of what would at first glance seem like common sense is technically illegal. For example, you’re not supposed to ask someone his or her age or marital status because that information can lead to the appearance or suspicion of discrimination.
19. Get funding
This is another one that depends on the details. It can be as easy as deciding to spend a few thousand rands you already have or as hard as raising millions of rands from professional investors.
Your simple start-up, involving a home office and a computer, might need nothing more than what you can get at a retailer like Dion or Makro in an afternoon.
If you have to raise more money than you have, you need to write a detailed business plan, find potential investors and do a lot more work. If you’re looking for professional investment, you almost certainly won’t get that in three weeks (although there are some rare exceptions). You can still get your business going with the money you can get quickly so that you look that much more attractive to investors.
20. Think about opening day
This should be fun: Imagine the big party, the searchlights beaming into the sky, a brass band. Well maybe not all that, but opening day is a good event to start your business marketing right.
Plan your opening day and make sure everyone knows about it. Write a press release, talk to local or trade reporters and generally let people know about your business. You want to build buzz so that when you open, people are aware of you.
You’re up and running, and in 21 steps, just as we had hoped. That makes today the first day of the rest of your business. Today you’ll want to take another day to make the sale.
21. Start your business
Focus today and see how many customers you can get in the door, figuratively or literally, depending on your business. On your first day, remember to observe what’s going right, what’s going wrong and to note what could be better.
Your business will quickly become different from what you expected, and that’s OK. The key is to record what’s different and why, and make course corrections. In the real world, your planning should become management. So review your plan vs. actual frequently, and run your business better.
How To Make Course Corrections And Finding Your Differentiator
A lot of launching a business is starting small, and pivoting as needed.
An advisor whom we trust, and who has been involved in our business since launch would like to buy into the business. We could make use of the cash injection, and we believe his experience would be beneficial to the business. His condition is that he occupies a board seat, and that we create an advisory board that he can also sit on. Should we do it? — Mvepho
If you trust the guy and need the money, do the deal. A board seat is fine. Voting should be based on shareholding, not hands raised. Don’t allow for any special minority rights like veto over budget or right to appoint CFO.
An advisory board for a start-up seems a tad overkill, but if he wants one, give it. He’s either going be an ass, or he won’t. Only one way to find out: Get into bed.
The key provisions of the shareholder agreement relate to divorce. How do you get out of relationship? There are three key parts to consider: Forced sale provisions (death, disability, prison, leave country, etc); Valuation formula for exit (5 x NPAT); Agree to arbitration being binding.
The simpler you keep things, the easier it will be to part ways if things don’t work out.
I need to attract customers away from their existing suppliers who offer a similar product to mine. My value proposition is convenience and quality. What other value should I consider? My main customers are restauranteurs and households (flats), and I provide the convenience by instant deliveries of food (chicken and eggs) to their doorstep. — Mam
Pick one differentiator. If one isn’t enough, your product isn’t good enough.
In this case maybe it’s convenience. Or maybe it’s speed of delivery (30 minutes from order). Or maybe it’s the best eggs in SA.
Whatever. Ask customers what the most important thing is, then focus on pushing that as your unique selling proposition.
That doesn’t mean you ignore the other inputs. It just means your pitch is predicated on one key selling point.
My partners and I have managed to get an investment opportunity for our app but now we have an issue about how we should spend that money.
I think we should first get some traction with users with a MVP even though we’re not delivering on our value proposition in the beginning i.e selling before we commit to building and iterating based on user feedback before adding new features.
My partners think that now that we have an investment opportunity, we should build the app with all the features because that’s what differentiates us in the market.
How would you handle a situation like this? — Tula
Start with MVP. Get feedback. Iterate.
Do not start with an app including all the bells and whistles. Firstly, it will take too long to make and get bogged in scope creep. Secondly, if you’re on the wrong track and you’ve already spent all your money, its game over. Insert coin.
Rather start small. It lets you course correct faster and keeps you in the game longer.
My waiter has contracted a chronic infectious disease (not HIV). He’s worked for me for seven years, but I can’t risk my staff/customers getting sick. What should I do? — Bob
The business comes before individuals. It can be painful losing a loyal long-time staff member, but you have to do it if he jeopardises your business survival. Exhaust all options, but if there is no medical solution then you have no choice. But you can’t just cut him loose. If you do that, all your other long-standing staff will look at you and think, “He doesn’t care for me.” Morale will go down, and your business may fail anyway.
If you are forced to lose a loyal staff member, you must go out of your way to ensure he/she is financially taken care of, either through a pension or a lump-sum payment.
It’s the right thing to do, and it will show your other staff that you have their backs through thick and thin.
Alan Knott-Craig’s latest book, 13 Rules for being an Entrepreneur is now available.
What it’s about
It’s easy to be an entrepreneur. It’s also easy to fail. What’s hard is being a successful entrepreneur.
For an entrepreneur, there is only one important metric of success: Money. But life is not only about making money. It’s about being happy.
This book is a collection of tips and wisdom that will help you make money without forgoing happiness.
Get it now
Do you have a burning start-up question?
(Infographic) The 20 Most Common Reasons Start-ups Fail And How To Avoid Them
These do’s and don’ts can make or break your start-up.
So, you have a great new idea or invention, and you are ready to open your start-up business. But, you’ve been scared by the well-publicised statistic about start-up failure – more than 50 percent of small businesses fail in the first four years.
Opening and operating a successful start-up requires some luck hard-work and thoughtful planning – as well as the ability to adapt that plan. Having been involved as a consultant to numerous start-ups over the past decade, I have seen some fail, some achieve a modicum of success, and some make it big.
Here are a few do’s and don’ts that will help guide your start-up to the promised land:
- Don’t think that a great idea or a great product is enough. The start-up graveyard is littered with amazing ideas and products that have failed.
- Do have a business plan that includes every aspect of how you will run your operation and how it will be successful. It should include all anticipated costs, marketing, manufacturing, the technology required and staffing. A business plan should also include how you will market and sell your product.
- Don’t think your idea or product is original and because you and your friends think it’s amazing, means that it is and there’s a market for it.
- Do lots of research before you spend your money. As a consultant, I have on three separate occasions been asked to help with a business plan for a start-up, where I discovered almost exactly what they are doing has been tried before and failed. In two of those instances, the previous failures indicated that the idea wasn’t good. In the third instance, we were able to learn from the previous mistakes and actually make a successful run at it. The number one reason start-ups fail is that there is no market for their offering.
- Don’t assume you will get financing other than the money you start with from yourself, family and friends. Only a very small percentage of start-ups get Venture Capital (VC) funding and in fact, the funding bubble has burst. And that means early-stage start-ups are getting little or no love from outside equity firms.
- Do assume the initial funding you have will be all you get, so the goal is to have the lowest burn rate possible. Therefore, your initial business plan should have a route to profitability and sustainability before the money runs out. The number two reason start-ups fail is that they run out of money.
- Don’t think that your expert knowledge of your business, a well-developed business plan and proficiency in PowerPoint are enough to craft an investor deck that will get a private equity firm’s attention.
- Do hire an expert consultant who has done this before. VCs can smell an embellished or amateurish deck 100 miles away. You typically only get one look by a potential investor, so make sure your investor deck is the absolute best it can be.
- Don’t assume that technology will be easy or come as scheduled. In almost every start-up I have been involved with, where the need for technology advancement was crucial to success, there were unanticipated issues and delays.
- Do assume that there will be delays in technological deliveries and therefore you need to leave a buffer for that in your business plan. Do have a competent development team and if they are not performing, replace them as soon as possible.
- Don’t think that you can go at this alone or that it will be easy to assemble a winning team.
- Do select your team members carefully, trying to add as much diversity as possible. The most successful start-ups that I have seen have mixed experience and newbies as well as the more traditional kind of diversity. The number three reason startups fail is that they have the wrong team.
- Don’t think customers are just waiting for your offering and investors will be lining up to give you money simply because your idea is amazing – even if you have been a successful serial entrepreneur in the past.
- Do be humble and realistic about everyone you meet. Relationships are a key to success, and like with personal relationships, if you want to be successful, be sure you see yourself as others see you. I have witnessed a lack of self-awareness and a big ego from owner’s doom potentially successful start-ups.
- Don’t think you are leaving a nine-to-five job for the easy and flexible life of being your own boss. A start-up is a seven-day-a-week occupation and now it’s your money and reputation that are solely on the line.
- Do plan to work harder than you ever have with little return on your efforts for an extended period. Do be honest with everyone you interact with, as your reputation will ultimately be a key to your success.
To have big success as a startup, you’ll have to master all the do’s and don’ts above, and that’s a daunting task. So, before you begin, the question you must ask yourself is: “How badly do you want it?!”
This article was originally posted here on Entrepreneur.com.
The Complete How-To Guide for Starting a Car Wash
What you need to know about opening your own car wash in South Africa.
We all love to have a clean car – start your own business today
Shiny wheels, the perfectly clear windows and not a streak in sight. In today’s fast paced world we often don’t have the time to do it ourselves – and when we do, there are other things that quickly fill that time.
And so we pop off to the local car wash to have it done and ticked off the list so that we can move on to other things.
How often have you sat considering owning a car wash of your own while you’re waiting for your car to be done? If it’s more than once, then maybe you should consider taking the leap and starting a car wash business.
Contents in this guide
- How to Choose What Type of Car Wash to Open
- Steps for Registering a Car Wash Business
- Car Wash Funding Options
- Choosing a Location for Your Car Wash
- Car Wash Insurance and Liability Cover
- Car Wash Equipment and Supplies
- Car Wash Marketing and Branding Basics
- Hiring and Managing Your Car Wash Staff
- How to Set Your Prices?
How to Choose What Type of Car Wash to Open
The first decision that needs to be made involves deciding between a franchise and an independent business model. Both of these come with their own set of risks and rewards – all of which have been set out in the table below.
The decision between an independent venture and a franchise opportunity must be a personal choice based on your personality.
In general – if you are someone who likes to blaze your own trail and like to have complete 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.
If however, you are better at working within the guidelines and like the freedom of someone else, in this case the parent company, making the decisions for you – then starting a franchise is the way forward.
Make sure when investigating the car wash franchise you are interested in, that you choose a recognisable brand with a good reputation in order to get the full benefit of buying into a franchise.
With both franchising and independent ventures, you now also have the choice of starting a mobile car wash, instead of a fixed full time entity.
Need to know: Should You Purchase An Existing Franchise?
This also comes with pros and cons and these are listed below.
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). This involves lodging a Notice of Incorporation (CoR 14.1) and a Memorandum of Incorporation (CoR 15.1 A-E). These forms are available at www.cipc.co.za. They take roughly five to seven days.
Alternatively, it is possible to use a service that registers your company for you with the CIPC such 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 of the 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 the IT77C that must be accompanied by a certified copy of your ID and a copy of the company’s registration documentation. The IT77C form is available from www.sars.gov.za. If your employees aged 24 – 65 will be earning more than R5 000 per month, then you will need to register for UIF and PAYE.
To register for unemployment insurance – visit www.labour.gov.za for more information on the process and for the forms.
The final step that takes place in conjunction with the step above is to cover your employees in terms of occupational injuries, diseases or death in terms of the Compensation Fund. This is optional. 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 assess whether or not the premise you want to work from is purely residential or if it has been zoned to allow it to be a business property.
Furthermore, to operate a car wash you might need to apply for a permit under the water restriction bylaws depending on your municipality and the province you are in. For more information 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 detailed business plan. No institution will give you funding without one. For instructions on how to put a business plan together watch this video on business plans for dummies.
Sourcing funding for a start-up can be a bit of a challenge if you do not know where to go or what they are expecting of you. Here is a quick rundown of what you would need to prepare in order to encourage others, such as financial institutions, to give you the funding you need to start your venture.
Related: New Ways SMEs Can Find Funding
Broadly speaking there are four main options available to entrepreneurs starting their own businesses. 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, but grants 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 they have all your information and know your financial habits and behaviours as well as your credit record. 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 to do 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 Small Enterprise 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 your business 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 rather end 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 business
- The site must be easily accessible from the road
- It must be easy for customers to get back onto the road once their car is clean
- Highly visible
- A 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 area
- Enough space for cars to queue
- It 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 the agreement in writing.
In clear and concise language that both parties can understand, make sure that your lease covers 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 per square metre per month, excluding VAT for commercial and industrial properties in South Africa. Make sure you both agree on what costs will be covered by your rental and what costs you will incur (i.e. electricity).
Know under what circumstances the lease may be voided by either party. And finally, know who 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 disclaimer can exempt car wash owners from covering the costs of repairing vehicles that are damaged on 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 well maintained and is regularly checked for foreign objects that could cause damage. It is also the responsibility of the owner to make absolutely sure that all cleaning products used throughout the process are car-friendly.
Furthermore, public liability cover is not enough. Property in the custody, care or control of the car wash owner is excluded from cover under the public liability section. The correct policy to have 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 ones driving and moving the cars.
It is important that you as the owner of the car wash to have general liability insurance that covers:
- Medical expenses to yourself and your employees in case of injury
- Custody, care and control coverage
- Equipment break down
- Damage to cars – you will need to set this limit for your policy
- It 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 that in order for his car wash to continue successfully, it is important that only management handles all the cars.
Not only does it make the insurance coverage easier and cheaper, but customers are usually happier knowing that the person who might be moving their car is more accountable.
Car Wash Equipment and Supplies
In some cases, all you’ll need is a bucket, clean water, soap and some good cloths – and the willingness to approach people to offer your services. But if you would like to open a more professional business and reach a broader market then there is some equipment that you’ll need.
If you are opening a franchise, the parent company or franchisor will be making the decisions for you. If you are opening an independent location or mobile business then you will need to source the necessary equipment.
The basic equipment needed for a manual car wash is:
- High pressure system
- Oil/water separation Unit
- Drainage unit
- Industrial vacuum cleaner with wet upholstery cleaning option
- Possibly an upholstery cleaner
- Depending 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 room
- Drying bay
- Ancillary 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 gun
- A good sized tank in the back of the truck/van or even trailer
- A 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 are inclined to go the eco-friend route, there are even ranges of waterless cleaning solutions.
The cleaning product basics you would need are:
- Car soaps
- Metal polish
- Plastic polish
- Car wax
- Glass cleaner
- Fabric shampoo
- Leather cleaners
- Detergent for the pedals
- And 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.html
- Kwik Car Wash – http://www.kwikcarwash.co.za/page2.htm
- Eco 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 check-ups. 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 the 360 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 to the effectiveness of your business.
In order to bring the customers to you, there are a couple of things you could do. These involve connecting on an emotional level, staying relevant and flexible, committing to the community you 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 ways to differentiate your brand.
For the car wash business here are the applicable ones:
- Expand your appeal
- Rewrite the experience
- Break away from conventional wisdom
- Be the expert
- Share values with your customers
- Engage the senses
- Focus on aesthetics
- Treat people differently than your competitors do (treat them better)
When you are implementing these values in your brand, make sure that they go deeper than just 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’s important to note that your staff are your brand ambassadors. A good service experience means that people will come back and more than that, they will tell others about you too. Word of 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 couple of easy options:
- Keep the conversation active with your customers
- Customer databases so that you can text or email them your specials (these must be opt in)
- Advertisements in local papers and on local sites
- Always squash any bad word of mouth by proving the opposite
- Consider 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 staff often handling the money, it is easy for untrustworthy staff to “slip it into their pocket.”
Make sure your staff is reliable and Degee advises that you need to keep theft as low as you possibly can.
If you open a bigger operation than just yourself, or if you are needed to expand your business as 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
- Have a good sense of service delivery.
The number of people you hire depends on your expected workload. The more washing and drying bays you have, the more people you will need. You also need to consider how many days 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 Your Prices?
If you are going to give a variety of different services then you should have options for all budgets and time frames to suit the biggest market possible.
As with any service industry business – you need to have competitive prices for the services that you offer. It’s important to do some market research in your area as to what your competitors are charging for which services.
Important factors to consider:
- The cost of your cleaning supplies
- Your overhead costs
- The amount of cars you can do in an hour
- The number of staff members you have
- Your working hours for the week
- Competitor prices for similar services
- The 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 price and distance travelled. In general, the cost of a mobile car wash service is higher than that of a car 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 market research 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. The best way to get repeat customers is to supply the ones you have with an amazing service. For an in-depth 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.
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