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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Car Wash SWOT Analysis

 

Strengths

 

Car washes operate with a great deal of economic stability. During times of economic recessions or duress, these businesses are able to remain profitable and cash flow positive given that they generate extremely high gross margins from their services. Additionally, as many people are extremely busy, they will continue to use car washes instead of cleaning their cars on their own. Generally, the startup costs for a new car wash business range from $20,000 to $250,000 depending on whether or not automated equipment will be purchased. Companies that provide detailing services generally produce higher gross margins than self-service car washes.

 

Weaknesses

 

One of the primary issues that car washes have, much like any other business is that they face a tremendous amount of competition. There are low barriers to entry for starting a new car wash (with the exception of mechanically operated locations). Additionally, these businesses - while generating high gross margins - also have very high operating costs. The energy and water costs for these businesses are very high. It should be noted that payroll costs for a car wash a usually somewhat low.


Opportunities

 

From a service standpoint, a car wash can continually expand its service offerings to include specialized detailing and more through washes. Additionally, many owners of car washes expand their operations by acquiring or developing additional locations. Once established, banks and financial institutions like providing capital to these businesses given their high gross margins, highly predictable revenue streams, and economic stability.

 

From a financing standpoint, a developer of car washes should expect to be required to make a 20% down payment when acquiring or starting a new business. This amount may be lower if real estate is being developed or acquired.

 

Threats

 

Generally, the primary threat faced by car washes are competitive issues. However, provided that a proper location is found - this risk can be substantially ameliorated. At this time, there are no pending pieces of legislation that would impact the way that these businesses conduct their operations.


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