Top 11 Mistakes People Make When Starting a Carwash Business

Are you planning to start a carwash business? Building one from the ground up can be a lucrative venture, but it's essential to avoid common mistakes that can hurt your success.

Lacking Knowledge of Cars

As a business owner, you'll need to focus on managing your car wash business operations and having a basic understanding of cars and their components can be an advantage in many situations, such as identifying potential car damage, advising customers on appropriate washing techniques, or recommending value-added services such as detailing or waxing.

While some may argue that knowing cars is not essential in building a carwash business, this is important in making the business successful in the long run.

No Passion for Cars or Car Care

Many successful business owners will tell you the same thing - the secret to their success is their passion for their work. Passion for cars or car care can provide the motivation, innovation, enthusiasm, and understanding necessary to create a unique, high-quality car care experience that can keep the right customers returning.

Carwash business owners who deeply love and understand car care are often better equipped to communicate their mission and vision to their staff, creating a shared sense of purpose and commitment to excellence.

Not Doing Enough Research

Before launching a car wash business, it's crucial to research the market, competition, and customer preferences to understand what you need to do to stand out. Doing research will help you create an effective business plan to secure funding, attract investors, make strategic decisions, and choose a perfect location.

Not Having the Right Reason

Some business owners form businesses for the wrong reasons. Some people started selling electric bikes because they were trending during the pandemic, some created milk tea shops because they were popular on Instagram and Twitter from 2014 to 2019, some built coffee shops after seeing a crowded coffee spot elsewhere, and some began an expensive Italian gourmet restaurant in a market-style area because they tried a similar restaurant somewhere in Makati.

Based on our experience, some of our old regular customers had also turned their home garages into carwash shops, just like the humble beginning of Nanoworx Car Care. They saw the business' potential and started their own, even replicating history. Some even lowered their services' prices to the point where sustainability was already being questioned. Unfortunately, not all could keep their shops open for at least a year. We're genuinely happy for those who remained standing as of this writing.

Lowering Down Prices Just to Kill the Competitions

As mentioned, lowering your prices to attract or steal customers can negatively impact your business. Here are some of its disadvantages:

1. It can reduce your profit margins to an unsustainable level in the long term. If you can't cover your costs or make a reasonable profit, your business won't be able to survive.
2. It can devalue your brand. Lowering your prices too drastically can give the impression that your product or service is below standard.
3. It can attract the wrong type of customers. If you lower your prices too much, you may attract customers who are only interested in the lowest price rather than the quality of your product or service. These customers won't be loyal.
4. It can create unrealistic expectations. Raising prices later to cover costs or increase profits can be problematic.

Settling for the Traditional Carwash Shop

Admit it, a "traditional carwash shop" in the Philippines is somehow similar to a "talyer" (car workshop). Oily, wet, dirty, too dark or too bright because the area doesn't have a roof, lots of unnecessary junk everywhere, and carwash staff wearing clothes that make them look like they're about to have a drinking sesh.

As people say, do not follow social norms to stand out. If you want growth, be different than the rest.

Not Having Enough Capital

Starting a car wash business requires a significant investment, including equipment, land, and labor costs. Underestimating these expenses can leave you with a shortfall of funds, low-quality tools, or a below-satisfactory productivity rate.

Not Hiring the Right People

Car washing is a labor-intensive job that requires attention to detail and a friendly demeanor. Hiring the right employees can improve service quality and customer satisfaction.

Ignoring Marketing and Advertising

When you have a marketing/advertising person, he should be on the same page as you. You should feel the same level of hunger and drive. Lastly, the person assigned to do the job should have an innovative mind and extensive experience in the marketing field.

Not Focusing on Customer Service

Customer satisfaction is essential to a car wash business's success, and ignoring it can lead to negative reviews and lost business.

Not Having a Contingency Plan

Unexpected events such as natural disasters, economic collapses, or epidemics/pandemics can disrupt a car wash business's operations. A contingency plan can help you navigate these challenges and minimize their impact on your business.

During the pandemic in 2020, we didn't have a choice but to stop our operations since our business is not classified as a "basic need." When the lockdowns eased up a bit, we started the renovations. When we were allowed to open it again, we reopened Nanoworx Car Care with more car bays, more open spaces to offer more car care services, and more staff to accommodate more customers simultaneously. Instead of panicking, we used the lockdown era to give the shop a complete make-over in preparation for its relaunching.

These mistakes were not acquired from various references online. These are listed based on our experiences running the shop, our previous customers who built and (eventually) destroyed their car care shops, and even our friends' lessons from their failed business ventures.