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How to Start a Car Wash Business

admin — Sat, 14 Aug 2010 01:45:11 +0000

There are several options for a person to consider when looking getting into the car wash business. Should the person buy an existing business? Should it be automatic-self service or one with a staff of washers? Should you consider a mobile business or a business with a fixed location? Should the business be a hand wash business or equipment oriented? All of these questions must be answered and the potential owner must come to grips with these options. The amount of money the person has available to put into the business will be a determining factor on what way would be the best way to go. A fixed location will cost more to do than a mobile business. Buying an existing business is usually more costly upfront than starting one from scratch, but in this case it would depend on which way the person chose. For example the mobile car wash would be far less expensive than a fixed location operation. The mobile business would have the cost of equipment and a truck. The fixed location would entail a building and the equipment for the bay or bays.

Starting either from scratch would cost a certain amount. Whether this would be more of less than buying an existing business would depend on the deal that could be made with the current owner. If the owner is motivated and trying to just get out of the business, then a better deal may be possible. The circumstances would dictate the answers to these questions.

Talking with business brokers and looking on the Internet could help in finding a person with a mobile business. The fixed property would probably be easier to find.

Another possibility would be to start with a mobile business and as the cash flow became more stable, look into getting or adding a fixed location car wash.

The Internet is a terrific way to find businesses/equipment for sale

A person thinking about starting one of these car wash associated businesses can easily find car washes for sale and brokers who represent them. The mobile businesses may be slightly harder to find, but they are available. The advantage of buying an existing business is almost always a better way to go than starting one from scratch. The immediate cash flow and clients is a huge plus to a new owner. This factor could be the difference between success and failure. An existing business is much easier to push past the break-even point and to a successful venture. A true start-up business has to gain clients and slowly build up cash flow. The question for the owner of this business is will it happen soon enough for the business to survive.

Talk with a broker about what is available and the terms they feel they can obtain from the current owner. If this is out of your reach financially, then a mobile hand wash could be the answer or using a small power washer to get the business off the ground and started. There are several options in this business that could lead to a successful new business. Getting clients will be the biggest problem facing the new owner of such a business, as there are few to none when the business is opened.

The Internet can be used to find equipment, which is new or used. This is another real advantage of using this tool to help a potential owner find what is needed. Just put in what you are looking for in the search box and you will be surprised at how many sources will show up.

Arranging financing of an existing business

The current owner is the obvious source of some financing of an existing business. The problem is the buyer will have to pay a higher price for the business than if it were being purchased for cash. Having your financing in place when making your offer for the business will save money on the purchase price.

The Internet is an excellent way to find business financing for your purchase. There are several firms that show up on the Net for this type of loans. These firms are in the business of doing this kind of lending and are much more understanding of the problems a new owner faces when buying a business. They are certainly worth contacting and discussing your situation.

Car Wash information and Car Wash business planning

There are great sources on the Net that will help the potential owner of any type of business. The Car Wash business is well covered and a buyer can get good information about running and owning this type of business. Having prior knowledge of what is needed to be successful in this business will help a potential buyer decide if this is the correct move for them to follow. A book that tells the facts is invaluable to the buyer of such a business. Getting an up close and personal look before the fact lets the buyer imagine what it would be like to own a car wash business. If they like what the see in their minds eye they can pursue the project.

Another way to get information is to speak with people in the business. They may be willing to talk if they are sure that you will not be in competition with them. They could lead you to brokers and companies that would be helpful in getting more information. The one question that you should try to get them to answer is would they do it again. Has it panned out like they thought it would before they got into it?

Any information from all sources will help you evaluate even better the advantages and disadvantages of going into such a business. This is true of any type of business that a person is considering.

The problem as always is one size does not fit all. One owners experience could be great and another could wish they never made the decision

Conclusions

This business, car washing, has so many options available to owners and potential buyers that need to be looked at and considered very carefully.

It is not like buying a restaurant or a plumbing company. Those businesses have limited variations such as location or the type special services they offer. This business has many different levels of financial commitment to buy or start. All of these options make this an interesting business to consider. People are very particular about their cars these days. Their car represents a substantial investment that needs care and ongoing maintenance. This means this business niche is likely to grow and be used by more people all of the time. A trend like that makes this business even more attractive to the potential owner.

Finding a business for sale and the needed money to make the purchase is fairly easy for a person that is used to using an Internet search engine. If you speak with someone in the business, they may be very helpful and even better they may be in the market to sell. If they are, the obvious question is why do they want to sell. In any event they could give you valuable insight into the business.

Business revenue profit and loss and balance sheet cash and bank

admin — Mon, 19 Jul 2010 01:51:23 +0000

Due to unfamiliarity with the technical aspects of double entry bookkeeping non accountants frequently have problems understanding the financial accounting terms of business revenue profit and loss and balance sheet cash and bank transactions. This misunderstanding has its root in that money received is not a sale, gain or profit but the settlement of a debt owed to the business. And money paid out is not an expense or loss but the settlement of a debt owed by the business in accounting terms.

Essential double entry bookkeeping does separate business revenue debits and credits from balance sheet capital accounts. Accounting produces a profit statement which is the sum of the revenue accounts and a balance sheet which is list of the assets and liabilities. Business revenue accounts represent the description of goods and services the business has supplied as sales and goods and services bought by the business that is expenses.

The confusion can be explained in what is often perceived as a single financial transaction at the till of a shopkeeper. Receiving the money from the customer is wrongly regarded as a sale. In fact when the item is presented to the sales assistant at the till in accounting terms the customer is offering to buy the item. The sales assistant then enters the amount to be paid in the till and that is the recording of the sale. When the customer pays that is not the sale but payment of the money owed by the customer for that item.

When the financial accounts are prepared the till receipt would be recorded as the sales figure which is a business revenue profit and loss account item. The double entry is the amount of money received which is an asset and recorded as cash received being a balance sheet item. If the amount received is less than the record of sales the difference is money still owed by the customer and would be recorded as a debtor balance.

Staying with the retail accounting example when the goods sold were originally purchased by the shop owner produces two accounting transactions. Firstly the shop owner would order and take delivery of the goods at which point no money may have changed hands and the double entry bookkeeping is to record the item purchased as a business expense in the financial accounts and also as a debt owed to the supplier, known as the creditor.

When the supplier is paid the amount paid is recorded twice, firstly to reduce the creditor balance and secondly to show the amount paid by reducing the cash and bank resources. Cash and bank balances are balance sheet items as are creditor balances. Payment of the creditor is then not a business revenue transaction but the transfer of amounts between balance sheet accounts

The essence of understanding financial accounting terms is similar to the physics rule of every action having an equal and opposite reaction. In double entry bookkeeping every financial transaction entered has an equal and opposite entry, the double entry.

Sales and cash received are not directly the equal and opposite but in fact are two separate financial transactions. Double entry accounting for sales is to debit the debtors account in the balance sheet as debtors are assets and credit sales in the revenue account, Double entry accounting for the money received would be between two balance sheet accounts by crediting debtors to reduce the amount owed by customers and debit the cash or bank account as the money now received is now the asset.

To Be, Or Not to Be, an Entrepreneur

admin — Mon, 28 Jun 2010 04:51:27 +0000

Being an entrepreneur is challenging.

That’s an understatement. Ask anyone who successfully runs their own operation and they will probably tell you that it’s the most demanding, and the most rewarding undertaking of their life.

While many entrepreneurs recognize characteristics such as knowledge, passion, and perseverance as being prerequisites for success, many don’t take the time do define what success is, and how they will measure it. This results in unrealistic expectations, or worse, measuring their success against the successes of others.

Every year it’s estimated that over 60% of new businesses fail. With a staggering and eye-opening statistic such as this, one should seriously ponder the question, to be, or not to be an entrepreneur, when considering entrepreneurship as an employment option.

Often overlooked at the outset of entrepreneurial endeavors are the requirements for success, which can be viewed as “phases” of development.

While they may vary in accordance to endeavor or industry, the first, and perhaps most critical phase, is market research – which has one purpose: to help you thoroughly understand the market that you are attempting to achieve profits in.

Too often, would-be entrepreneurs make an emotional decision to take a product or service to the marketplace without evaluating its viability. It’s always a mistake. Once met with the daunting task of marketing and differentiation, they buckle under pressure, and eventually fold.

In order to find your place, and your success in any marketplace, you need to not only understand the history, conditions, trends, and status of your market, but your competitors. In doing so, you find your target audience (those who will most likely value and purchase your services or products), and your niche (a particular product or service that you’re distinctly able to provide).

It’s not uncommon for novice business owners and upstart entrepreneurs to be delusional about the novelty of their products or services. This type of delusion breeds false confidence which can hinder your progress, and is detrimental to the life your new business.

You may not know of competing entrepreneurs and businesses offering similar services and products, but your target audience does. So does the bank from which you may attempt to secure a loan. It’s almost a guarantee that you will not be given a loan if you say that you have “no competition.”

Even though market research, and the information uncovered while conducting it may be vital, so is the need for start-up capital. Businesses need money to go like cars need gas. Undercapitalization is cited as one of the top reasons for business failure by the United States Small Business Administration (SBA).

Once you’ve cleared the research and start-up capital hurdles, the management hurdle looms just as large. Properly managing the day-to-day operations of your business is just as consuming, and should be done by someone who has skill and experience in doing so.

Your market research enabled you to discover that there was a market for your products and services, your marketing plan will help you to get people to discover your products and services, and purchase them.

Many people (and business owners) allocate the lion’s share of their operational budget to marketing efforts. It makes sense: you get back what you put out, right? Not necessarily.

Marketing always comes down to perceived value and desired benefits.

The real value of what you have to offer – product or service – should not be incongruent between how good it really is, and how good you made it seem with your marketing efforts. If so, your success will be short-lived. Eventually, such practices will come back to haunt you because word of mouth is very powerful, and is still one of the most effective marketing strategies.

If you successfully clear the research, management, and marketing hurdles, you need to be very mindful of business laws and taxes. I always recommend consulting with to a established business and tax attorneys about this aspect of your business. It’s worth it and it pays for itself in the long run.

Finally, there are the other miscellaneous items that while small, loom very large in the grand scheme of your success and happiness as an entrepreneur. No sick, vacation, or holiday pay; no 401K; unstable monthly income; longer work hours (maybe 12 hours per day). And this is before considering common issues with vendors, clients, and employees. Let alone factoring in the impact on your personal relationships due to time constraints caused by the growing attention demands of your new business.

In the end, it really does come down to passion.

If you are passionate about whatever product or service you have to offer, and passionate about your belief that it solves problems, fulfills needs, or caters to desires, you can overcome many hurdles with limited resources.