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How to Start a Car Wash Business

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.

How to Start a Hair Salon Business

The hair salon business is all about customer satisfaction. Those salons that have happy customers thrive and grow. Those that have a problem with customer satisfaction will not grow, will not get referrals and will eventually lose customers, and go out of business. The message here is if you are not a people person, then this business may not be for you. A salon needs to be a pleasant place to visit and spend an hour or so. The beauticians need to be skilled and friendly. They need to be efficient in their work and professional in the service they provide.

A person with the knowledge, licenses, some business skills and the desire to work for themselves can be successful in this business. The first step, after putting in your time to learn the business, may be renting a space in an existing salon. This arrangement will allow you to gain more experience without going fully out on your own. Be careful about any contract you sign when doing this so you do not limit what you can do in the future. This is a way to build a following that will stay with you when you open your own shop. Depending on where you live, you may or may not be able to start in your own home. Zoning laws about home businesses will determine if this is a possibility. If not, it will take some money to start a shop, in the typical strip mall or small business corner. You may consider doing this with a partner and there by cut the expenses a little. You could also rent space to another beautician with her own following. In fact this may be a way to get a very nice salon off the ground with a bang.

A hair salon these days can be far more than just doing hair. It can also do nails, offer massages and body wraps. It could be part of a workout complex or part of a larger hotel or motel complex. The secret to growing a business like this is foot traffic and referrals. Starting from scratch is the hard way to go, but it is the least expensive out of pocket cost, compared with buying an existing shop and its client list. The problem with buying an existing shop is the customer list while valuable could also be very unstable. A buyer would have to make it part of the contract that a certain percentage of the clients must remain customers. The known entity has value and the location, but the client list can be hard to value.

Using a business broker correctly

A business broker may have listings in your area of shops that are for sale. Check with them and local papers for businesses for sale. Use the Internet to expand your search and the list of business brokers that may be able to help you find the perfect shop for you to buy. A solid broker can be of real service and speed up the process of finding what you are looking for. They also are very good at negotiating the deal and the terms if they are needed. Brokers that have been in the business for a while are excellent sources for getting answers to your questions. If they do not know the answer they know where to find it. A business broker can be of service and value far above what you will need to pay for their help. If nothing else they can evaluate the price of the business to see if it is fair. The fact is most of these professional brokers help far more than telling you the price is fair for the business you are considering.

You have the desire, but not all of the money

This is a common problem when buying a business. Where to find and get the extra money needed is part of the problem solving that is needed when buying a business. A loan from your friendly banker, a second mortgage on your home, a loan from family or friends and finally terms with the present owner are typical ways to come up with the money needed to buy a business. The first three are fairly obvious to understand. The answer is usually a quick yes or no. Terms from the current owner will depend on several factors. How much of the total price can you come up with and still have money left to operate the business. How much of the total price does the owner need right now? Are they going to stay in the area or move? This can be an important factor in making a deal How much of a premium over the cash out price are they going to demand if you want to buy on terms? How long will they give you to pay off the balance of the agreed to price? Terms are a matter of how badly they wish to sell, how much they will need to carry back in paper and what you can afford to pay back on a monthly basis. If the term price is high enough this could cement the deal. If they are just tired of the business and ready to retire, then you may be in a strong position to negotiate. In any event, this is a common way to make up the short fall between the money you have available and the asking price.

There is one other source you may try. The Internet list many businesses that make loans to business buyers to complete the purchase. These companies understand this type of loan and can evaluate it better than most lenders. It is certainly worth checking out if you need the extra money to make the purchase happen. The worst-case scenario is you have to go back to the owner and pay a higher price for the business to get the terms you need.

Conclusions

The beauty business is alive and a growing niche in the business world. People will pay good money to look their best and the salon is able to make that happen. When a shop is opened in a mall or a strip of commercial establishments, the traffic will help it grow right from the start. If the service is good, a loyal customer can be obtained. This is money in the bank as this business is all about customer care and satisfaction. Repeat customers guarantee cash flow and also referrals. As the business grows the fixed expenses stay relatively constant so the profit margin will grow significantly. There are several ways to enhance the business and improve cash flow. An owner can rent out chair space or just hire new employees as needed. The business can offer other services such as nails and massages etc. Beauty takes care to maintain and customers in this business are willing to pay for its maintenance. If they feel a new service will help with their appearance, they will spend the money for it. This business is not a costly business to start like many other new businesses. An existing salon may be quite a bit more in cost to buy, but the immediate cash flow will help it succeed.

Hiring Brokers or Advisors for the Business Buying Process

The start of the hunt for a business to purchase is a very important time in the process. I would strongly recommend getting help to make your decisions much easier. Business Buying Brokers and Advisors are very useful when you are on the hunt and when you find a viable business fitting the criteria model you have made in your prep work before starting the hunt.

Does every buyer necessarily need help from a Broker or Business Advisor?

If you have already bought a business before then maybe you don’t need help. Although it wouldn’t hurt to get a second opinion on businesses you are seriously considering purchasing, especially when determining a fair market price.

If you have never bought a business before, it really is a good idea. Once you buy the business, a Business Advisor will really come in handy to help you settle into your new venture quicker and with better success.

Be smart and do not buy a business and expect to know everything and do everything. Plan on sticking to what you know best and get help with everything else until you either learn it, or permanently hire someone to take over the work. Taking on too much will quickly put your new venture into a hole.

Where do I find these professionals?

I would start with asking other business owners you know if they could recommend someone. If this is not possible, ask attorneys or accountants. I would also recommend doing a strong internet search specifically for the following key words “broker help in buying a business” or “business advisor help in buying a business”. From the search results, look for one in your local area.

You can technically hire this kind of help from anywhere as long as you don’t need them to physically look at the businesses with you. Be prepared to get in touch with a few. You really need to feel comfortable with this person.

Keep in mind that using a Broker that came directly from a listing is OK, but they are really representing the seller more than anything else. With that said, some of the larger Brokerages will actually assign a Broker to you that is really there to help you out but you need to ask how this works on a case by case basis.

Which one is better to go with?

The answer to this question often comes down to plain experience. Obviously a Broker has experience in Buying/Selling a business so this would always be a good idea. Better yet, a Broker that also has business owning/operations experience would really be ideal as far as Brokers go. If you are looking more long term, then finding a Business Advisor that has a background in business buying and selling is the ultimate way to go.

When should I hire one?

That’s very simple. As soon as you have performed your prep work, you should look for the proper Broker or Advisor to help you out. Services should be used through the due diligence period. They really aren’t needed following that unless you are looking for help with the business after the purchase from an Advisor.

What will they do for me?

Either one can fine tune your business buying criteria from your prep but a Broker is more adept in actually helping you on the hunt or actually performing this service for you. They can also help you search for the right business including soliciting businesses that fit your criteria that are not actually listed as for sale at the time. For the right price, almost any business is for sale so this may be a route you would want to take although it will be a much longer process.

These professional can make sure that a particular business that interests you fits all of your criteria well enough to get more information on it. Remember that you will initially get very little data on the business you are looking at.

Once you sign a non-disclosure, you will get additional information and these professionals will really be able to tell you whether to pursue it or not. If that is the next step, they will be a big help in giving you the right questions to ask the Seller/Broker about the business since this information will be limited financial data and an expanded description in most cases.

Their help in determining a fair market price for the business is the next crucial point. This is where you really can’t go wrong with getting help and taking purely personal opinions out of the loop.

Before you get all of the company financial history and dig deep into the operations of the business during the due diligence process, you will need to make an offer on the business, which is why this valuation is needed. This offer is made using a “Letter of Intent”, which is an agreement to pay the offered price if the business passes your “test” of contingencies.

A Broker or Advisor can make sure you have a reasonable set of contingency criteria to prove that the business is worth what you are offering. They will assist you in the due diligence process, along with your accountant, to verify that this is the case. Once the business passes muster, the Advisor or Broker has finished their job as far as the purchase is concerned.

How much will it cost?

Well, there are no set prices for this kind of work. Some may work hourly and some on a flat fee with some limitations on length of the contract term or the number of businesses they will look at with you. Others will have a small upfront fee with the rest of the payment tied to the asking price or savings from the original asking price.

It shouldn’t surprise you to see prices in the range of $125-$200 an hour or flat rates of $2000 to $4000. Again, if you find a broker directly through a listing, this will be “free” help. You may get lucky and find a gem but you might end up getting what you pay for. Don’t forget that a broker that comes from a listing is actually working for the seller since that’s who is paying them.

This is a big decision you are making here so this help really is necessary and worth the money if you are serious about purchasing a business. If this seems like too much money to make sure you do things right, then maybe you aren’t really ready at this point in time.

Conclusion

One final point about who you choose to help you find the right business and ultimately purchase one. Do yourself a huge favor and do not employ an accountant or attorney as your advisor. Everyone has their place in this process and this is not the one for either of these professions.

Although these professionals are needed in the process and should have experience in business buying/selling procedures, the majority are not qualified, nor do they have the time, to be a business advisor to you. If that was the thought process you had, forget about it right now. I promise you it will not be money well spent.

Please keep in mind that any advice you get from a Broker or Advisor is just that: advice. This is your money, time and effort going into the business you want to find and purchase. All final decisions are yours to make.

Being prepared before even starting your hunt is essential. Getting help doing anything you have not done before is just as important.