How to Start a Car Detailing Business

Some people care for their cars like their children and always want them spic and span, which is why the car wash and detailing industry is worth over $13 billion. Starting your own car detailing business offers a way for you to get a piece of that market and build a profitable company.

Challenges exist, however, when starting a car detailing business. You’ll have to work hard and be prepared with relevant knowledge to be successful. Fortunately, you’ve come to the right place, as this step-by-step guide provides all the information you’ll need to put you on the road to entrepreneurial success.

Step 1: Decide if the Business Is Right for You

Pros and cons

Every business, including a car detailing business, has pros and cons to consider before deciding if it’s the right path for you.

Car detailing industry trends

As car prices continue to rise, consumers tend to want to care for their cars more, which boosts the car detailing industry.

Industry size and growth

• Industry size and past growth – The US car wash and auto detailing industry showed steady growth for several years, until a pandemic-driven dip in 2020, according to market analyst IBISWorld. It is valued at nearly $14 billion in 2022.((https://www.ibisworld.com/industry-statistics/market-size/car-wash-auto-detailing-united-states/)) 
• Growth forecast – The industry is expected to grow 4% in 2022. A projected increase in per capita disposable income presents growth opportunities.
• Number of businesses – There are more than 56,000 car wash and auto detailing businesses in the US. ((https://www.ibisworld.com/industry-statistics/number-of-businesses/car-wash-auto-detailing-united-states/))
• Number of people employed – The industry employs more than 200,000 people.((https://www.ibisworld.com/industry-statistics/employment/car-wash-auto-detailing-united-states/))

Trends and challenges

Trends in the car detailing industry include:

• On-demand app-based auto detailing services are growing in demand. The mobile service comes to the customer’s home or workplace and does the work without any interruption to the customer’s day. The technology being used enables the detailing company to route detailers to customer locations. This offers customers speed and convenience by just clicking a few buttons on their phone.
• Consumers are also demanding eco-friendly detailing products including biodegradable soaps and waterless options. Business application provider CGS found in a 2019 survey that more than two-thirds of consumers consider sustainability when making purchases and are willing to pay more.((https://www.globenewswire.com/news-release/2019/01/10/1686144/0/en/CGS-Survey-Reveals-Sustainability-Is-Driving-Demand-and-Customer-Loyalty.html))

Challenges also exist in the car detailing industry which includes:

• The industry is extremely competitive due to low barriers to entry for a mobile detailing service. Business owners can combat this challenge by offering exceptional service, increasing revenue by upselling services, and offering rewards programs.
• Car detailing is considered a luxury purchase, so the industry is heavily impacted by economic fluctuations. When consumers have less disposable income the industry suffers.

Consumer spending

• Potential customer base – About 90% of US households had at least one light vehicle in 2017.((https://www.statista.com/statistics/551403/number-of-vehicles-per-household-in-the-united-states/))
• Average prices – The average price of car detailing is $100.

Demand hotspots

• Most popular states – The best states for auto detailers are New York, New Hampshire, and Washington.
• Least popular states – The least popular states for auto detailing are New Mexico, Texas, and Mississippi. ((https://www.zippia.com/automotive-detailer-jobs/best-states/)) 

What kind of people work in car detailing?

• Gender – Nearly 90% of automotive detailers are male, while 10% are female.((https://www.zippia.com/automotive-detailer-jobs/demographics/#gender-statistics))
• Average level of education – Automotive detailers don’t need to go to college. Half finished high school while 18% hold an associate degree. ((https://www.zippia.com/automotive-detailer-jobs/education/)) 
• Average age – Automotive detailers are under 50 years old.((https://www.zippia.com/automotive-detailer-jobs/demographics/#age-statistics))

How much does it cost to start a car detailing business?

Startup costs for a car detailing business range from $4,500 to $28,000. The low-end costs include purchasing used detailing tools and a used trailer to transport them. The high-end is for new detailing tools and renting a physical location. You can get all the tools you need in an auto detailer starter kit which range in price from $2,000 to $15,000.

Here’s a list to get you started:

• Buckets
• Vacuum
• Applicators and brushes
• Foam cannon
• Drying tools

How much can you earn from a car detailing business?

The average price of car detailing is $100. Your profit margin if you start a one-person mobile service will be around 90%. In your first year or two, you could work from home and detail 15 cars a week, bringing in $78,000 in annual revenue. This would mean about $70,000 in profit, assuming that 90% margin.

As your brand gains recognition, sales could climb to 70 cars a week with the help of other detailers. At this stage, you would rent a commercial space and hire staff, reducing your profit margin to around 40%. With annual revenue of $364,000, you would make about $145,000.

What barriers to entry are there?

There are a few barriers to entry for a car detailing business. Your biggest challenges will be:

• Startup costs to have a physical location are high
• You’ll face competition from large chain car washes

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a car detailing business, it’s a good idea to hone your concept in preparation to enter a competitive market.

Why? Identify an opportunity

Research car detailing businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an on-demand mobile service.

You might consider targeting a niche market by specializing in a certain aspect of your industry such as green detailing.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

You may want to offer different packages of services. A basic detailing service could include a wash and wax, vacuuming, and cleaning all non-fabric interior surfaces. A full detailing package could also include:

• Fabric cleaning and stain removal
• Trim paint repair
• Engine cleaning
• Tire cleaning

How much should you charge for car detailing?

Prices can range from $75 to $150 for basic detailing and will depend on the size of the car. Full-service detailing could be as much as $250.

If you’re working by yourself as a mobile detailer, your only expenses will be cleaning supplies and fuel, so you should aim for a profit margin of 90%. Once you know your costs, use the Step By Step profit margin calculator to determine your price points.

Who? Identify your target market

Your target market will be car owners, particularly new or classic car owners, who will tend to be a more established group. You can find them on sites like Facebook or LinkedIn.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office space and garage. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “car detailing” or “auto detailing”, boosts SEO
• Name should allow for expansion, for ex: “Jim’s Bakery” over “Jim’s Cookies”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
• Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
• Product and Services: Describe your offerings in detail.
• Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
• Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
• Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
• Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
• Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
• Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
• Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer on Fiverr to create a professional business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to car detailing businesses.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your car detailing business will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your Articles of Organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Your best options may be either personal funding or an SBA loan. SBA loans, however, have favorable terms, but you’ll have to make payments that will affect your cash flow.

Step 8: Apply for Licenses/Permits

Starting a car detailing business requires obtaining a number of licenses and permits from local, state, and federal governments. You can get an auto detailing certification if you choose. It’s not required, but it will add to your credibility. You can learn more from the International Detailers Association.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level licenses and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. You could also check this SBA guide for your state’s requirements.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes. You might consider a license compliance package from a filing firm such as MyCorporation or MyCompanyWorks, or hire an attorney via Avvo or FindLaw.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account. Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your car detailing business as a sole proprietorship.

Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You can use industry-specific software, such as shopmonkey, Washify, or Managemart, to manage scheduling, dispatching, invoicing, hours tracking, and equipment.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from the casual online visitors, but still you should invest in marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:

• Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
• Instagram: Same benefits as Facebook but with different target audiences.
• Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now”. This can sharply increase purchases.
• Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

• Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
• Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
• Pay–per-click marketing – Use Google AdWords to come up faster from searches. Research your keywords first.
• Content marketing – Create content to post that will be relevant to your customers.
• Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal.
• Create infographics – Post infographics and include them in your content.
• Flyering – Distribute flyers in your neighborhood and at industry events.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

You can create your own website using services like WordPress, Webflow, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your car detailing meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your car detailing business could be:

• Eco-friendly car detailing for our planet
• Car detailing within 2 hours, guaranteed
• Want your car detailed before or after work? We’ll be there on your time

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a car detailing business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in car detailing for years and can offer invaluable insight and industry connections.

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in car detailing. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a car detailing business would include:

• Detailers – detail cars, customer service
• Dispatcher – schedule and send detailers to jobs
• General Manager – staff management, ordering, accounting
• Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Start Making Money!

Cars are expensive, and smart car owners care for their cars to keep them looking new for a long time. Car detailing is a big industry worth over $13 billion, so even just capturing a small piece of that market can mean big profits. 

You can start a mobile auto detailing service for little money and expand your business to either a physical location or by adding more mobile detailers. You have a wealth of information now, so you’re ready to start your entrepreneurial journey and build a successful car detailing business.