Waterless car wash businesses are continuing to gain momentum, with new technology focused on eco-friendly consumers, whilst also presenting a drought-proof business model.
South Africa’s older generation view cars as a status symbol, which means operating a business in the automotive industry could accelerate profits and secure you a large client base.
There are many choices to make when buying a car wash business, so research and due diligence is imperative.
Type of car wash
Car wash businesses come in many different styles. Location and the physical size of the business are also important factors to consider; you should have a clear understanding of what type of car wash will suit your preferred location, lifestyle and business goals.
For example, you may be interested in buying a conveyor belt style tunnel car wash that is located within a city-based shopping mall, or perhaps you prefer to own a hand-wash business that relies on staff washing the cars.
Self-serve car washes operate by customers washing their own cars using the equipment you provide. The benefit of this type of car wash is that your staff costs will generally be a lot lower, however, customers may misuse equipment, which means repair and maintenance costs could be higher.
Waterless car wash businesses are the future of this industry in South Africa, particulary due to many provinces suffering from drought.
South African consumers are also become more environmentally conscious, with 54% of consumers surveyed agreeing that brands and companies have to be environmentally responsible in today’s business climate.
Before you make an offer on a car-wash business, you should check the inventory and have a clear understanding of what machinery and equipment are being included within the sale.
Make a thorough inspection and check what condition the equipment is in; will you need to repair or replace any items, and if so, how much will this cost? You should calculate how much you will need to spend on the business once you take it over and factor this in before you make an offer.
You should also do your research and find out how easy it is to maintain the equipment, it may all be in good working well during an inspection, but you should be aware of the cost, time and care involved when using and maintaining the equipment daily.
You should also take into consideration how much water is being used during each wash and determine how environmentally responsible the car wash business is on water conservation.
The franchise sector in South Africa is showing positive growth, contributing more than 13% to the country’s GDP, which is a growth of 1.2% per annum.
If you’re considering the franchise route, do your research and find a business model that suits your vision and principles. For example, if running an environmentally-friendly business is important to you, you may want to consider running a waterless car wash franchise.
The estimated start-up cost is between R800,000 - R1,200,000 which also includes the initial franchise fee.
You should be aware, franchisors will charge a percentage for royalties, a franchise fee and some will also charge a marketing fee. You should speak to other franchisees before committing to a company, to find out their personal experience within the business, and what their realistic profit margins and working capital is.