SPRAKY’S CAR WASH
Business Plan
APRIL 6, 2015
By Yufan, Ziyan, J.P., and Abdulrahman
Sparky’s Car Wash Business Plan
General Information
The Sparky’s Car Wash business is solely owned and it will be a partnership with equal power
split, funded by Yufan, Ziyan, J.P., and Abdulrahman. Sparky’s Car Wash is aiming to provide
top-quality washing and detailing service in Arizona.
Business Plan
When most people think of a car wash, they tend to think of an exterior conveyor wash or hand
car wash. However, we are planning to open a full-service car wash called Sparky’s Car wash.
We are combining the exterior conveyor cleaning with a manual interior cleaning. In addition to
providing cleaning cars, we also have rest center and shop for customers to wait in, and offer
snacks, air fresheners, and car accessories to purchases. Our car wash will be on the Mill and
University Drive around the Arizona State University. Our target market will be Arizona State
students, fans, or any alumni living in the area with cars. There will be an Arizona State theme
with maroon and gold colored rotating brushes. We will be open from 9 to 5 on Monday through
Sunday. If there is rain, we will not be open.
Background Research
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Overview & Trend
The Car Wash industry relies heavily on discretionary spending and the driving habits of
consumers. As such, the industry is vulnerable to slower economic conditions and has faced
reduced revenue over the last five years. Recent improvements in consumers’ disposable
income will help the industry rebound in the coming years, with anticipated revenue growth of
3.3% annually to $7.7 billion by 2018.
The total number of Car Wash Businesses has declined in recent years to approximately 13,
177 and have forced remaining establishments to expand or diversify their services.
With continued economic growth, car sales will quicken and increase the number of motor
vehicle registrations in the United States. Through 2018, motor vehicle registrations are
expected to increase 1.3% annually. This will result in increased consumer demand for
aftermarket services such as car washes.
Rising utility costs, combined with increased competition from larger retailers, has pinched Car
Wash & Detailing businesses’ profitability. To offset these factors, smaller establishments have
focused their efforts on refreshing or expanding their product and service lines, developing
customer loyalty programs, and investing in waiting room amenities.
Customer Demographics
Household customers account for the largest share of car wash & detailing industry revenue at
approximately 76%. Car Wash & Detailing household customers are broadly defined as
consumers that have a driver’s license, own a car, and are older than 16 years of age. This
demographic is further segmented by income brackets, with households in the highest division
representing the greatest demand for car wash & detailing services.
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Business customers contribute 22% of industry revenue. Revenue from this segment is largely
derived from servicing delivery vans and taxi cabs. This segment includes businesses that
depend on motor vehicles for the daily running of the company, as well as taxi and rental car
companies, and truck businesses — many of whom cannot afford in-house repair and
maintenance shops. “Particularly independent companies that do not have the option of inhouse repairs. Slower economic activity during the recession led to fewer businesses using
vehicles to conduct trade, however a resumption of economic growth since 2010, has seen this
segment strengthen.
Comparing to other car washes in the area that offer HAND WASHING instead of
machine
Machine Wash
Pros
Cons
Fewer employees Expensive machinery
Faster
Possible breakdown
Self-sustaining
Higher startup cost
There are 10 other car washes in Tempe, which means we have some pretty stiff competition.
However, more than half of these are hand wash car washes. Customer reviews online reveal
that some of these car washes can take over an hour to wash your car! Our car wash would be
much quicker, and would result in higher customer satisfaction and better online reviews.
Estimated budget for 5 years
1. Startup costs
Our initial startup budget will be high due to the fixed cost of purchasing the land, demolishing
the old building, and building our car wash. Also, we will buy the automated machine system at
the beginning of the business.
2. Annual expenses
We will need to pay for advertising, vacuums, electricity and soap for the wash every year.
3. Customer services center
We will offer a customer services room with Wi-Fi for customers to wait in, offer snacks, air
fresheners, and car accessories for people to purchase while waiting for their car.
4. Wages for employees
We will also hire employees to work in the customer services and to help make sure people drive
into the automated wash correctly.
Five years budget table
Land (5 year
mortgage)
Demolition
Costs
Building and
Year 1
10,000
Year 2
10,000
Year 3
10,000
Year 4
10,000
Year 5
10,000
20,000
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-
-
1,000
-
-
-
-
Sign
Automated
System
Advertising
Electricity
Soap and
Supplies
Customer
Service Costs
Labor Costs
Totals
200,000
-
-
-
-
5,000
90,000
10,000
5,000
90,000
10,000
5,000
90,000
10,000
5,000
90,000
10,000
5,000
90,000
10,000
5,400
5,400
5,400
5,400
5,400
50,000
481,400
50,000
260,400
50,000
260,400
50,000
260,400
50,000
260,400
Marketing & Advertising strategies
The car wash will be based in Tempe, Arizona. This area has a number of benefits in terms of the
market that it will provide for the business.
Market Segmentation
 Business owners (new car owners) tend to be very busy people, but often able to make
their own hours.
 Retired people (older luxury car owners) are not restricted by typical work schedules so
will bale to frequent the car wash during the week.
 Local business are always require their small vans keep clean to maintain their company
image, and are looking for a cost effective, efficient car washing servicing. Also, they are
prefer to use a car wash service during the week rather than during weekends.
Sales strategies
The sales and marketing focus will be on a one-to-one basis, with the emphasis on gaining loyal
and repeat customers as “friends” of the business. All customers will feel they are a valued friend
of Soapy Rides, and that all employees care about the care and upkeep of each vehicle. We must
be aware that there are low switching costs in the car washing industry, so we have to work hard
to develop and keep repeat customers.
Advertising Strategies
For the advertising part, appealing the customers always the most important part. First, we will
have a huge nylon car wash blowup with crazy arms, so we will catch people’s attention as they
drive past our location. We will also have a large colorful sign in the front of our store, hopefully
attracting more customers. Furthermore, because of our location, there will be amount students
be our customers. We will offer student discounts, and hand out flyers on campus outside the
Memorial Union on the north patio.
Establishing a physical and digital location
The profitability of individual firms depends on favorable location and efficient operations. In
this case, the favorable location is our basic element for our operating business. According to the
research, there are some location tips we need to be concentrated. First of all, the target
customers from the surrounding area and local business play the most important roles in the
operation. To make sure we have large amount of customers to provide service with, we will
choose the location that near the residential neighborhood. The Mill Avenue and University
Drive around the Arizona State University will be a good choice to attract the students and
parents from the university. Second, we will set our sign at the visible place to make sure drivers
have enough time to find our car wash. During the research, drivers need at least 40 seconds to
react. Ideally, traffic should travel past at no more than 40 miles per hour so drivers have time to
see the signal and make decision. The location around the Mill Avenue satisfied all these
requirements. In addition, there are many large empty space for us to build our car wash shop.
Based on analyses, around the Arizona State University will bring our benefits.
On the other hand, we will also market through social media. Social media will help us expand
the market to appeal more customers. First, we will build the official website for our car wash.
We will design the car care services, coupons, locations, about us, and news part. People can
easily search us on the website and get the general information of our car wash.. First, we will
create a Facebook page, and also an Instagram page where we can reach a larger audience in the
area. For every person that “likes” our Facebook or follows our Instagram feed, we will give
them 50% off a car wash. After people are following us, we will post fun and exciting pictures
related to the business and customers, attracting them to our car wash instead of the competition.
Closing Statements
Customer care is our most important element of succeeding in this business. We emphasize all
the issues our customers are informing us about and we try to improve our business based on
those complaints and suggestions. We try to make our car wash experience the most convenient
in the Tempe for our valued customers in every possible way. We try our best to serve all of our
customers and take their comments seriously to insure that all customers get the best car wash
experience ever.
Works Cited
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"Car Wash Business 2013." SBDCNet SBDC Clearinghouse. N.p., n.d. Web. 07 Apr. 2015.
"Conveyor Car Wash." Entrepreneur. N.p., n.d. Web. 07 Apr. 2015.
"How to Open a Car Wash Business." WikiHow. N.p., n.d. Web. 07 Apr. 2015.