Wash and Earn: How to Start a Car Wash Business in the Philippines

Are you passionate about cars? Do you love making your auto look sparkly clean? Do you want to make extra money? If you answer “Yes!” to all, a car wash business is something you should consider.

However, starting a car wash business in the Philippines isn’t a walk in the park. It requires careful planning and execution. If you do it right, you can earn good money.

Don’t know where to start? We’ve got you! Here’s a comprehensive guide to starting a car wash business.

Top Reasons to Start a Car Wash Business in the Philippines

Why is a car wash good business? Starting a car wash in the Philippines in 2023 comes with the following advantages:

👍 You are Your Own Boss

Just like other entrepreneurial endeavors, a car or motor wash business offers flexibility and independence. You get to call the shots on everything, from the opening hours to the number of cars the shop will clean per day. And since you’re the boss, you’re more than free to implement out-of-the-box ideas that will make your business stand out.

But the greatest benefit of being a business owner is a healthy life-work balance. If your shop achieves the quota for the day, you can leave early and attend to other important things in your life.

👍 There’s Always a Need for a Car Wash

In 2022, more than 1.27 million private cars were registered with the authorities. [1] Add to that the number of public vehicles on the road.

A lot of these cars will regularly need cleaning, which means business for car wash shops. In other words, a car wash will always have clients.

👍 You Can Earn Good Money

Is a car wash business profitable in the Philippines? As mentioned earlier, a car wash will always have clients.

An average car wash price list may peg the cleaning service between ₱200 and ₱500 per car. On the other hand, auto detailing prices in the Philippines may cost between ₱2,000 and ₱15,000 per car.

Depending on your car wash size, your business may earn a net income of around ₱35,000 per month.

👍 You Can Offer Other Services

If you’re creative, you can offer non-car wash services, such as a snack bar or a mini grocery, to earn extra bucks. You’ll learn more about this later in this guide.

How to Start a Car Wash Business in the Philippines

Starting a car wash business in the Philippines requires you to take calculated steps. This will help you minimize risks while increasing your odds of success.

Here are the things to keep in mind:

1. Do Your Research

One of the first steps you need to take is to scope out the industry landscape. Research the process, the technologies involved, and customer insights.

Start by having your car cleaned by different car wash shops. Subtly ask the employees about their operations. If you’re lucky enough to meet the owner, ask them about how they started their business.

As you go about your research, you’ll realize that car wash shops follow different business models. Generally, you can categorize them into the following:

• Self-service car wash – Using a coin-operated dial system, the customer cleans their car within a time limit. When the time is up, the water will be shut off. The car owner will have to insert more coins to get more water.
• Automatic or touchless car wash – In this set-up, the customer drives their car into a bay and lets the car-washing machine move all over the vehicle. In some cases, the wheels are manually cleaned by the staff.
• Mobile car wash – A relatively new breed of car cleaning service in the country, a mobile car wash comes to the customer’s location to clean their vehicle. Customers can book a service via app or phone.
• Detailing shop – An auto detailing shop offers more than just a car wash. It restores the vehicle to a like-new or best possible condition. Steps include upholstery cleaning, window polishing, and waxing.

Consider looking into the industry of car wash franchises in the Philippines as well. While a franchise may be quite expensive, you can easily mount your shop with a tried-and-tested business model and professional assistance. Popular car wash franchise brands include Speedy1 Carwash, Zorro Contactless Carwash, and Nice Day! Carwash.

2. Scout for a Great Location

A good location greatly contributes to the profitability of a car wash business. When scouting for a location, take note of the following factors:

• Traffic – Pick a location where vehicles regularly drive by. The more cars in your vicinity, the more chances of getting customers. High-traffic areas include highways, subdivisions, and even shopping centers.
• Competition – As much as possible, set up your business in a location far away from your competitors.
• Zoning concerns – See to it that zoning laws actually allow car wash operations in the location you’re eyeing.
• Rent – A prime location comes with a price. See if your projected income can cover the cost of rent.
• Potential – Will the size of your location make it possible for you to set up other ventures in the future like a snack bar or a café?

3. Know the Start-Up Costs

How much does it cost to open a car wash? It will primarily depend on the type of shop you want and the range of services you plan to offer.

For starters, your car wash business capital should cover the following:

• Car wash space rental - ₱40,000 per month
• Equipment (e.g. pressure washer) - ₱30,000
• Supplies (e.g., soap, towels, etc.) - ₱3,000 per month
• Water - ₱2,000 per month
• Electricity - ₱3,000 per month
• Labor (at least two persons) - ₱25,000 per month
• Marketing - ₱3,000
• TOTAL - ₱106,000

Note that these prices are just estimates. They can go up or down, depending on other factors.

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4. Create Your Car Wash Business Plan

A business plan is a document that shows your car wash shop’s feasibility and profit potential. Think of it as the blueprint of your venture. You’ll need it to convince your business partners and lenders that the car wash can actually come to life.

Your car wash business plan in the Philippines should include the following details, which are included in the template developed by the Department of Trade and Industry (DTI): [2]

• Executive summary – Include a brief description of your business, your profile, and the contribution of your business to the community and the economy.
• Marketing plan – Include the description of your car wash service and where it stands in the competition. You’ll also need to cover your target market, marketing strategy, and marketing budget.
• Operational plan – Detail how your car wash shop’s operations will work. Include your sources of equipment, labor availability, and labor cost, among others.
• Financial plan – Discuss the cost of the business, financing plan, return on investment (ROI), break-even point (BEP), and loan requirements.
• Organizational plan – Explain the business structure of the shop and the qualifications of the owner. Give a breakdown of the following expenses: pre-operating expenses, post-operating expenses, and administrative expenses.

5. Choose a Business Name

Coming up with a business name is something you shouldn’t overlook. Spend some time crafting a brand that people will remember.

Here are some tips to help you formulate car wash name ideas:

• Pick a name that tells a story. It could be something personal, such as the name of your dad, brother, or best friend.
• Don’t choose names that are difficult to spell or pronounce.
• Resort to puns if you want to inject your fun personality into the brand. However, keep in mind that some people may not take your business seriously.
• Make sure your business name can adjust to your future plans. If you started with “Manny’s Car Wash” and suddenly decide to add detailing services, you can change the name to “Manny’s Auto Detailing” to encompass both services.
• Get car wash name ideas by using business name generators. [3]

6. Register Your Car Wash Business

You can’t run a business without the right permits. Make sure your car wash business in the Philippines is registered with the proper authorities.

Register your business with the DTI first. Then register it with the Bureau of Internal Revenue (BIR) for tax purposes.

These may seem like a hassle, but they’re necessary. Ultimately, a duly registered business allows you to confidently advertise your services and foster relationships with customers and suppliers.

7. Source the Necessary Equipment

You can source some of your equipment for car wash from hardware stores and even online shops, such as Lazada and Shopee. Your car wash equipment list should include the following:

• High-pressure washers
• Water hoses
• Foam cannon
• Buckets
• Car wash brushes
• Car sponge
• Wheel and tire brushes
• Car shampoo
• Microfiber cloth
• Drying towels and rags
• Air blower
• Glass cleaners
• Vacuum cleaners
• Upholstery cleaners
• Two-step ladders
• Car polisher
• Car wax
• Car wax applicator

8. Hire the Right People

Build an amazing team by hiring the right people. You can hire newbies if you have the resources to train them.

Since this business is labor-intensive, hire people who have the physical capacity and stamina. If you’re offering more technical services, such as detailing and automatic cleaning, look for employees with experience and expertise.

Attract the right people with competitive wages and benefits. On top of that, foster a healthy workplace culture. All of these will help prevent employee turnover.

9. Offer Value-Added Services

As a car wash owner, you’ll eventually find that your customers have needs other than having their cars cleaned. This is an opportunity to offer them value-added services that will keep them coming back to your shop.

Here are some ideas:

• Free Wi-Fi – Connect your customers to the internet, so they can kill time on their own terms. While they wait for the cleaning to finish, they can surf the web, connect with their friends, and even catch up on work.
• Auto detailing – If you’re operating a basic car wash and planning to expand the business in the future, auto detailing services in the Philippines are something to consider. As mentioned, detailing is all about restoring a car’s finish from its interior to its exterior.
• Café or restaurant – Customers can fill their tummies as they wait for their cars to get cleaned. A café, a milk tea shop , or a small eatery also provides your patrons with a cozy place to lounge at.
• Mini grocery – For many, a car wash is part of their list of errands. Set up a mini grocery where your customers can do their shopping. You may also offer bills payment and remittance services.
• Pet wash – Car owners who have pets can hit two birds with one stone when they visit your car wash.
• Laundry shop – Since water is your car wash’s main resource, it just makes sense to set up a laundry shop .
• Barber shop and salon – Customers can have their hair cut and done while their cars are being cleaned.

10. Create a Marketing Strategy

Your car wash business in the Philippines can attract more clients with the right marketing strategies. Flyers and posters are a given, but if you want to up your tactics, consider the following:

• Free or discounted car wash – For your launch, offer a free or discounted car wash, so people can see the quality of your service.
• Social media – Start a social media page for your car wash. This works both as a marketing medium and a customer service channel. For the latter, you can use the page to answer customer inquiries and pencil book appointments.
• Loyalty program – This may come in the form of a small booklet that collects stamps every time a customer visits your shop. If the customer completes all the stamps, they will get a reward, such as a free car wash or vouchers.
• Sponsorships – If you’re serious about increasing your shop’s local presence, sponsor events and hold fundraisers.

Final Thoughts

Starting a car wash business in the Philippines is a feasible and lucrative venture since there will always be someone who needs their car cleaned. Setting it up, however, comes with challenges. You’ll need a big space, technical expertise, and manpower.

Minimize risks and increase your odds of success with a well-thought-out plan. Start with the pointers above, but don’t forget to talk to seasoned business owners.

Sources:

• [1] Number of Registered Private Cars in the Philippines
• [2] Department of Trade and Industry Business Plan Template
• [3] Business Name Generator

Jay Pagkatotohan

Jay is a marketing communications professional who specializes in short-form and long-form content. He has written ads for TV, radio, print, and digital. He has also produced corporate blogs, magazine features, white papers, product listings, reviews, and press releases for clients here and abroad. When he’s not writing, Jay plays the piano or takes pictures for his visual diary. Follow Jay on LinkedIn.