Car Wash Facility
According to estimation, there are currently approximately 145 car wash facilities active in Israel.
Types of carwash in the industry are tunnel facilities, dynamic facilities, pressure washing (intended for heavy vehicles), and other, manual types of car wash.
Customers: Defining the Target Market and its Size, Market segmenting
- Private customers.
- Corporate customers and vehicle fleets.
- Heavy vehicles, including trucks, busses, and tractors.
A car wash facility requires vendors in the following parameters.
- Construction, installation, and maintenance of car wash facilities.
- Vendors for internal cleaning vacuum systems
- Detergent vendors.
- Expandable products for wiping, internal cleaning, ventilation, etc.
- Most car wash facilities don’t usually advertise, and rely on their location and regular customers to attract the public.
- Salient signposts displayed at the sales location.
- Cooperation promotions such as “Fuel and Wash”.
Factors Affecting Success:
Location, the existence of other car wash facilities in the vicinity, and creating a repository of regular clientele.
The main barriers in this industry are the requirement for a vast area, location and accessibility, a high initial investment, licensing and the ability to establish business relationships with managers of corporate vehicle fleets in order to create a wide base of customers.
Human resources at car wash facilities include a manager or shift supervisor, car wash operators, employees who offer specialized services such as “no scratch” wash and wax, in addition to non-professional employees for internal cleaning. The number of employees varies according to the day of the week and seasonality.
Required Equipment and Premises:
- Premises- a car wash facility requires a lot large enough to enclose access lanes to the washing facility, a parking and wait area, and a vacuuming area.
- A washing facility- tunnel, dynamic facility, or a pressure washes facility.
- According to regulation, a purification and water recycling apparatus should be installed.
Industry Revenue and Profitability
Raw profit in the industry is a direct effect of wash type (external or full), type of machinery (tunnel, dynamic, or manual), location, and composition of clientele.
Raw profit from a full wash constitutes approximately 20%-30% of revenue. Raw profit from external wash only constitutes 25-40% of revenue.
Factors affecting raw profit include water consumption, efficiency of the water recycling system, and the amount of corporate customers and promotions in sales.
Typical Terms of Payment
- Private customers usually pay in cash or by credit card.
- Payment terms for corporate customers are EOM +30 to EOM +60.
Licenses and Certifications:
Local authority licensing is required and stipulated upon Ministry of Quality of Environment licensing, installation of a water recycling system and removal of dangerous substances.
Business insurance (for content and inventory), third party insurance, employer’s liability insurance, and loss of income insurance. In addition to the above, an insurance agent should be consulted in regards to the need for additional insurance
Framework required for business licensing can be found on the Ministry for Environmental Protection website at www.environment.gov.il.