Table of Content

    Car Detailing Business Plan for starting your own business

    Do you want to start an auto detailing business? Well, auto detailing is the thing which keeps the valuable cars of vehicle owners in shape so the prospects of earning huge amounts of profits in this business are really high. But as with any other business, this business also requires top-notch planning for its startup as well as for its successful operation.

    In case you aren’t sure how to start a mobile auto detailing business, the first thing you should do is develop a comprehensive business plan covering all aspects. The business plan for car detailing not only lays the primary ground for establishing your company policies but it also helps you in startup. For helping you write an effective professional business planning, we are providing here the business plan of an auto detailing startup named ‘ProStar Auto Detailers’.

    Executive Summary

    2.1 The Business

    ProStar Auto Detailers will be started in a leased location adjacent to 6-Sigma Carwash in the main commercial district of San Jose, United States. We will be based at a ten minutes’ drive from the residential zone, that’s why our location is nearly ideal for starting a auto detailing business.

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    2.2 Management

    ProStar Auto Detailers will be owned and operated by Samuel King, who has been associated with automobile industry for more than 9 years. Samuel will hire a team of industry professionals for providing quality services to the customers.

    2.3 Customers

    The company will provide in-station auto detailing services at the facility while a mobile minibus will provide out-station auto detailing services to the customers. We plan to serve all sorts of customers, ranging from individual car owners to automobile dealers, located in the vicinity of our workshop.

    2.4 Target of the Company

    Our main business targets are summarized in the following column chart.

    Business plan for Car Detailing - 3 Years Profit Forecast

    Franchise Business Plan
    Helps the franchisee get business case approval from the franchisor

    Company Summary

    3.1 Company Owner

    ProStar Auto Detailers will be owned and operated by Samuel King, who has been associated with this industry for more than 9 years. After graduating from High School, Samuel started working in Realtek Carwash & Auto Detailers. Within next 5 years, he was promoted to Manager Operations of the company’s Manhattan branch. He then served as General Manager of Star Carwash for next 5 years after which he finally decided to start his own car detailing business startup.

    3.2 Why the Business is being started

    Samuel aims to start car detailing business for making profits in this industry as well as for introducing innovative detailing solutions originated from his creative mind. Being associated with this industry for around a decade, Samuel knows how to run a successful auto detailing business.

    3.3 How the Business will be started

    ProStar Auto Detailers will be started in a leased location adjacent to 6-Sigma Carwash in the main commercial district of San Jose, United States. The company will provide in-station services at the facility while for providing out-station services, a mobile minibus will be procured. The location was used as a warehouse in past and a contractor will be hired for converting the facility into an auto detailing workshop. In addition to leasing the facility, the company will acquire an operating license from the state. The inventory needed for startup includes furniture for office and waiting area, cash registers, computer systems, carpet extractors, air/vacuum fresheners, steam cleaners and associated detailing equipment and tools. The major startup costs are summarized in the column chart below.

    Auto Detailing Business Plan - Startup cost

    The detailed startup requirements and expenses are given in the table below.

    Start-up Expenses  
    Legal $75,500
    Consultants $0
    Insurance $62,750
    Rent $22,500
    Research and Development $42,750
    Expensed Equipment $42,750
    Signs $1,250
    TOTAL START-UP EXPENSES $247,500
    Start-up Assets $0
    Cash Required $322,500
    Start-up Inventory $52,625
    Other Current Assets $222,500
    Long-term Assets $125,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $121,875
    Start-up Assets to Fund $195,000
    TOTAL FUNDING REQUIRED $0
    Assets $203,125
    Non-cash Assets from Start-up $118,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $118,750
    Cash Balance on Starting Date $121,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $312,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $221,875
    TOTAL CAPITAL AND LIABILITIES $221,875
    Total Funding $265,000

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    Services for customers

    Before starting a mobile car detailing business, you must take many things into consideration such as you must consider what types of detailing services will you be providing to your customers. Deciding your services is extremely important since it helps you plan other components of your business so make sure to consider it before you think about how to start a car detailing business. ProStar Auto Detailers will mainly provide following services to its customers:

    • Exterior detailing: Exterior detailing will be done by providing a multi-step, scratch free, manual hand washes for giving an exquisite look to the valuable vehicles of our customers.
    • Interior detailing: Interior detailing will be done by cleaning all hard surfaces; seats, dashboard, center console, instrument cluster, door panels, etc. by wiping them down to remove topical dust. After that debris will be removed from carpets by blowing out & vacuuming.
    • Waxing & paint correction: Paint correction will be done by restoring the paint back to its true clarity by removing visible defects followed by waxing to protect and maintain the car’s paint.
    • Ceramic coating: Ceramic coating will be done by coating the vehicles with a fine layer of quartz for protecting their surface and giving them a shiny look.

    Marketing Analysis of auto detailing business

    The most important component of an effective car detailing business plan is its accurate marketing analysis. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this auto detailing business plan sample or other car detailing business plans available online. On the other hand, if you are starting a car detailing business on a larger scale, it is always best to seek the counsel of marketing experts.

    Note

    The success or failure of a business totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis.

    Therefore, it must be considered before you think about how to start car detailing business. Samuel acquired the services of marketing experts to carry out the marketing analysis for his mobile auto detailing business plan.

    5.1 Market & Industry Trends

    Immigration Business Plan

    Before you start an auto detailing business, you must analyze whether the market is feasible for startups or not. For analyzing the market trends, you can also take help from this car detailing business plan template. According to IBISWorld, the car wash and auto detailing industry generate $11 billion in revenue every year in the United States. As of 2018, there are more than 65,000 businesses in this industry which are responsible for employing more than 212,000 people in the United States. The number of car wash and auto detailing companies has been increasing over the past years while the industry is growing at an estimated rate of 3.1%. Considering the number of established businesses in this industry, the environment has become extremely competitive especially for the startups. Starting an auto detailing business is easy but sustaining it and making it profitable is something which can only be achieved by impeccable planning and effective marketing.

    5.2 Marketing Segmentation

    Our primary target market is the residential community living in San Jose. Nearly all people based in the area have their own vehicles either new or leased. Our secondary market will be the car dealerships located in the vicinity. Our experts have identified the following type of target audience which can become our future consumers:

    Auto Detailing Business Plan - Marketing Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 New car owners:

    This group comprises of customers who have recently bought a new car. These customers are very conscious about their cars and want them to look new as long as possible. Our detailing services will provide the perfect solution to them. In addition to exterior and interior detailing, these customers are also expected to have their vehicles ceramic coated by us for preserving their new look.

    5.2.2 Sports car owners:

    Many young and middle-aged men in the neighborhood own expensive sports cars. These people will also need our services for maintaining the exquisite looks of their expensive vehicles.

    5.2.3 Luxury car owners:

    Luxury car owners have totally different requirements and they can easily spend a lot of cash for maintaining their high-end expensive cars and keeping them in the best possible shape. These customers prefer quality to cost that’s why we will offer premium packages for them.

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    5.2.4 Local businesses:

    Since we will be located in the main commercial district of the city, we will be surrounded by several companies and local businesses, most of which have fleets of small vans and cars. Although these businesses own a lot of cars, their contribution to our revenue and sales will be negligible since they seldom require car detailing services.

    5.2.5 Dealerships:

    There are 5 car dealerships within 6 miles of our location. These car dealers sell old as well as new cars and need their cars to be in the best possible state. That’s why they will regularly require our auto detailing services.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis              
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    New car owners 35% 22,334 32,344 43,665 52,544 66,432 13.43%
    Sports car owners 15% 11,433 13,344 16,553 18,745 20,545 10.00%
    Luxury car owners 18% 12,867 14,433 15,999 17,565 19,131 15.32%
    Local businesses 7% 8,322 9,455 10,655 12,867 14,433 10.00%
    Dealerships 25% 10,655 11,221 12,867 14,433 15,485 16.32%
    Total 100% 54,956 80,797 86,872 101,721 120,541 9.54%

    5.3 Packages Pricing

    Considering the competitive environment, we have priced all our services in the similar ranges as of our competitors except for the interior detailing. While many of our competitors offer interior detailing services for about $100 on average, we have priced this service in relatively lower ranges. This is done to achieve a competitive advantage since interior detailing is the most frequently availed detailing service. Our services are priced as follows:

    • Exterior detailing starting at $50
    • Interior detailing starting at $80
    • Waxing & paint correction starting at $200
    • Ceramic coating starting at $400

    The pricing varies with the type of car and will generally be 30% more for SUVs and trucks.

    5.4 Target of the Company

    Our main business targets to be achieved as milestones over the course of next three years are as follows:

    • To become the best auto detailing service in San Jose within next five years of launch by providing high-quality services
    • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
    • To balance the initial cost of the startup with earned profits by the end of the second year

    Strategy

    After identifying the market demand, market trends, and the potential customers of the startup, the next step is to define an effective strategy for business attracting those customers.

    Kirk
    TrustPilot

    Aqua Hydro Solutions

    Aqua Hydro Solutions
    Alex and team are very professional, courteous and patient through out our business development. They helped our multi million dollar company advance to the next stage within our original business plan and strategies. We look forward to working with them on our next development and strongly recommend their services to any serious company that is evolving from start up and/or in the growth stages.
    Kirk

    ∙ Kirk

    Like marketing analysis, sales strategy is also an important component of a mobile car detailing business startup and must be properly planned before you think about to start your own car detailing business.

    6.1 Competitive Analysis

    As mentioned earlier, there are more than 65,000 similar businesses in the United States and for surviving in such intensely competitive environment, one needs to have certain competitive advantages. Our biggest competitive advantage is our location which is nearly ideal to start mobile car detailing business. We are located in the main commercial district but the residential zone is just at a ten minutes’ drive from us. Secondly, we have priced our interior detailing service in relatively lower ranges as compared to our competitors so as to promote our sales and build trust among customers. Another aspect which will distinguish us from other similar businesses will be our unparalleled and exceptional customer service. At our company, all esteemed customers and their valuable vehicles will be dealt with utmost respect and care.

    6.2 Sales Strategy

    After carrying out a detailed analysis, our experts came up with the following brilliant ideas to advertise and sell our services.

    • We will advertise our company on social media.
    • We will make a company webpage by which our customers can make a reservation with us.
    • We will offer various discounts on special occasions to attract new customers.
    • We will initially offer 20% discount on all services for first three months.

    6.3 Sales Monthly

    Auto Detailing Business Plan - Sales Monthly

    6.4 Sales Yearly

    Auto Detailing Business Plan - Sales Yearly

    6.5 Sales Forecast

    Auto Detailing Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Interior detailing 1,887,030 2,680,320 2,588,240
    Exterior detailing 802,370 815,430 823,540
    Waxing & paint correction 539,320 770230 1,002,310
    Ceramic coating 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    Interior detailing $140.00 $150.00 $160.00
    Exterior detailing $600.00 $800.00 $1,000.00
    Waxing & paint correction $700.00 $800.00 $900.00
    Ceramic coating $650.00 $750.00 $850.00
    Sales
    Interior detailing $2,149,800 $2,784,000 $3,383,200
    Exterior detailing $120,050 $194,500 $268,500
    Waxing & paint correction $50,110 $71,600 $93,000
    Ceramic coating $139,350 $194,600 $249,850
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Interior detailing $0.70 $0.80 $0.90
    Exterior detailing $0.40 $0.45 $0.50
    Waxing & paint correction $0.30 $0.35 $0.40
    Ceramic coating $3.00 $3.50 $4.00
    Direct Cost of Sales
    Interior detailing $989,300 $1,839,000 $2,679,700
    Exterior detailing $66,600 $119,900 $173,200
    Waxing & paint correction $17,900 $35,000 $52,100
    Ceramic coating $19,400 $67,600 $115,800
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

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    Personnel plan

    Personnel plan is also an important component of a car detailing business plan since it gives you an estimate of the staff required for your startup as well as the costs incurred on their salaries. So, make sure to duly consider it before thinking about how to start a car detailing business. The personnel plan of ProStar Auto Detailers is as follows.

    7.1 Company Staff

    Samuel will act as the General Manager of the company and will initially hire following people:

    • 1 Accountant for maintaining financial and other records
    • 2 Sales Executives responsible for marketing and discovering new ventures
    • 10 Workers for manually washing the cars and providing detailing services
    • 3 Technicians for operating the equipment and machines
    • 1 Driver for driving the mobile van to customers
    • 1 Technical Assistant for managing the company’s official website and social media pages
    • 1 Customer Representative for interacting with customers

    To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs. Since the traffic for car detailing service varies month to month so part-time workers will also be hired to facilitate the company staff in the busy summer months.

    7.2 Average Salary of Employees

    The following table shows the forecasted data about the salaries of the employees for the next three years:

     Personnel Plan      
      Year 1 Year 2 Year 3
    Accountant $85,000 $95,000 $105,000
    Sales Executives $45,000 $50,000 $55,000
    Workers $550,000 $650,000 $750,000
    Technicians $145,000 $152,000 $159,000
    Driver $50,000 $55,000 $60,000
    Technical Assistant $87,000 $94,000 $101,000
    Customer Representative $42,000 $45,000 $48,000
    Total Salaries $1,004,000 $1,141,000 $1,278,000

    Financial Plan

    The last component of car detailing business plan is an in-depth financial plan. The financial plan crafts a detailed map of all the expenses needed for the startup and how these expenses will be met by the earned profits. It is recommended that you hire a financial expert for guiding you through all financial aspects needed to be considered for starting an auto detailing business.
    The company will be financed by Samuel himself and he will control the direction of business to make sure that it is expanding at the forecasted rate. As for the car detailing business start up, no equity funding or outside loan will be required. With the help of financial experts, Samuel has developed the following financial plan for his auto detailing start up business, which outlines the financial development of ProStar Auto Detailers over the next three years.

    8.1 Important Assumptions

    The financial projections of the company are forecasted on the basis of following assumptions. These assumptions are quite conservative and are expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.

     General Assumptions      
      Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Auto Detailing Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:  
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
      Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses      
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Auto Detailing Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Auto Detailing Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Auto Detailing Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Auto Detailing Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Auto Detailing Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations      
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received      
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations      
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent      
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets      
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets      
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities      
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

     Ratio Analysis        
      Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets        
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales        
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios        
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3  
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios        
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios        
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios        
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios        
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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