How much can be earned from car wash business in India ? – Profit Insights & Investment
A car wash business in India is one of the most booming businesses in India and as well as all across the globe. This is because the rise in population gave rise to demand for vehicles as well. Therefore, there has become a greater need in car wash services as well in the country.
Now, in a developing country like India the minimum requirement to start a car wash business could go as low as below INR 1 lakh but countries like the United States have started using automatic machines for car wash services which does not require much manpower but heavy investment on machinery and infrastructure.
Keeping all things aside here in this article we will talk about is car washing business a profitable business in India. There are some major factors that car businesses would have to keep in mind before they start the business.
Some of the most common factors that could determine the profitability and revenue earning of a car wash business in India are location, labor costs, space (owned or rented) and other such kinds of things.
Is Car Wash Business Really Profitable In India?
Every year more than 38 lakhs are being sold in India and there is a certain percentage increase every year. Therefore, with such a rise in demand for four-wheeler vehicles, the rise in demand in car washing service has also become significant. The car washing business still seems to be quite an underrated business in India because it is not often seen at every location but car owners do need to keep their vehicles clean which is why the car wash business has become a profitable business in India.
As mentioned earlier, there are several factors that one has to keep in mind if they wish to open a new car wash business. Some of those factors include the location and site selection, labor salary, and space if it is rented or owned.
The lesser is your cost and expenses the greater will be the profit earned by your business. Your business may earn a good amount of revenue at the end of the month but as a business owner you would also have to meet unavoidable expenses like electricity bill, water bill, rent (if space is rented), salary of staff, maintenance, and other such kinds of things.
Revenue Potential Of The Business With One Pressure Machine
| Sr No. | Vehicle Type | Charge |
| 1 | Bike | 100 |
| 2 | SUV's | 400-500 |
| 3 | Sedan | 300 |
| 4 | Average profit per 45 min | 300 |
| 5 | Per Day Income | 3000 |
| 6 | Monthly Income | 90000 |
| 7 | Labour Cost | 7-10 K |
| 8 | Lumsump Monthly profit | 70-75 K |
Say suppose you have started a new car wash business at a good location where you will receive a good number of customers every day (approximately 10 vehicles). Depending on the type of vehicle whether it is a bike, car (mostly hatchbacks and sedan), and SUVs you would have to set a decent price for each type of car service.
Your price should not be marked either too low nor too high. The average price that you can keep is INR 100 for bikes, INR 300 for hatchback and sedan cars, and INR 400-500 for SUVs.
Now, to calculate the revenue let us take the average price that your business will receive from a customer which is INR 300. The time taken for washing each type of vehicle is around 15 minutes and for 15 minutes you will be charging INR 100 and therefore the average of INR 300.
Now, your newly car washing business setup is receiving 10 customers per day. Therefore, the per day revenue for your business will come to INR 3000.
With the same number of customers the monthly revenue will be INR 75000 considering 25 days as business days excluding weekdays. Now, this is the total potential revenue that your business has made in a month with an average earning of INR 3000 per day.
At the end of the month you would also have to meet up with your expenses as well. The expenses will be deducted from the total revenue that your business has earned in a month which is in this case INR 75000.
Some basic expenses are the salary of your staff members which on an average could come to around INR 21000 for 3 staff members (INR 7000 per staff member salary). You would also have to spend on chemicals like car wash foams, and other such things on a daily basis. The cost in this would be around INR 5000 on average per month. For water and electricity bills you may have to spend around INR 5000 every month.
Keeping in mind that the shop area is owned by you and you do not have to pay any kind of rent then this business model is feasible or else there will be a huge fluctuation in the total profit earned. The total average expense is expected to be around INR 31000.
The cash in hand remaining after deducting expenses from revenues would be INR 44000. If you have to pay rent then it would come to around INR 24000 on average which would be your average profit per month.
Investment Required To Start Car Washing Business
The total investment required to start this business could vary from one location to another and also depending on the type of city where you decide to open. If you wish to open in a tier 1 city then the cost would be more as compared to opening in a tier 2 or tier 3 city or in a sub-urban area.
The competition in tier 1 cities is high and therefore your business could earn less profit every month. Therefore, the best option to start this business is to open in a tier 2 or tier 3 city.
The total investment required to start this business is minimum INR 1 lakh. You need to spend on machinery like on a platform for lifting cars, car washing tools and equipment, water supply, electric supply, and labor costs. With all these things keeping in mind one can easily open up a car washing business for under INR 1 lakh.
Return On Investment Period For This Setup
The return on investment period is yet another thing that would be determined on the volume of car wash being done every single day. Being a new player in the market it will not be easy to directly start making profits at the end of the month.
Also, you may have to spend time and effort on advertising and marketing for your services as well so that the maximum number of customers can view your services.
All in all, the expected return on investment period for this setup would be approximately less than 6-4 months. Business owners need to make sure that the setup is done at a proper location so that maximum potential customers can visit the car wash center.
You also need to keep your pricing strategy attractive for the customers so that it becomes a win-win situation for both the parties.
Factors Affecting Revenue Of A Car Wash Business
There are always some factors that could affect the revenue earning of a carwash business and it may even become a major challenge for you as well. Therefore, you need to study and research the market carefully before setting up the infrastructure for your business. However, there are certain other things that could possibly have a major effect on your revenue earning. They are mentioned as the following.
- Competition
- High pricing strategy
- Salary of labors
- Ineffective marketing and advertising
- Volume of sales being made per day.
- Location
Tips To Optimize The Customer Footfall For A Car Wash Business
Business owners can still come up with strategies to have a chance to increase their volume of car washes being done every single day. Before setting up the business it is important to conduct thorough market research and analyze the results. If the results seem positive and suitable for a car wash business to run smoothly then you can start on your business immediately.
Keep the pricing strategy attractive for both the customers and your business. Customers should feel attracted towards your car service just by looking at the pricing strategy itself. If the pricing is higher then you will be losing potential customers and therefore the revenue earned by your business at the end of the month will be low.
Make some investment on advertising and marketing of your business. There is no business in the world that can earn profits by not spending on its marketing and advertising. You may use free social media tools so that you do not have to spend a hefty amount. You can also set up small banners and put it up on local advertisements as well.