Entrepreneurship and Innovation: Mobile Car Wash Business Analysis

This report provides a comprehensive analysis of starting a mobile car wash business, focusing on entrepreneurship and innovation. It begins with an introduction to the growing car wash industry and the increasing demand for convenient car care services. The report details the venture description, outlining the services offered such as exterior and interior washing, polishing, and detailing, with a focus on providing high-quality service at a reasonable cost. Management strategies are discussed, emphasizing the importance of effective marketing, workload management, and investing in new technology. The marketing plan includes targeting different customer segments like new car owners, luxury car owners, and car dealerships. A competitive analysis is conducted to identify strengths and weaknesses in the market. The financial analysis projects sales forecasts, operating expenses, and revenue, considering factors like chemical costs, labor charges, and insurance. Finally, the report addresses potential risks and challenges, including financial, market, human resources, and environmental risks, offering insights into maintaining balance and achieving business rewards. This document is available on Desklib, a platform offering study tools for students.

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ENTREPRENEUR AND INNOVATION
Executive summary
This report is on the entrepreneur of starting a mobile car wash service. This report states the
clear understanding of the new business process. Then its venture description, management,
marketing planning, competitors analysis, financial planning, risk and challenges faced by this
industry.

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Table of Contents
Introduction..........................................................................................................................3
Venture description..............................................................................................................3
Management........................................................................................................................4
Marketing plan.....................................................................................................................6
Competitors analysis............................................................................................................8
Financial analysis.................................................................................................................8
Risk and challenges.............................................................................................................9
Bibliography......................................................................................................................11
Appendix............................................................................................................................14

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Introduction
In the recent few years, the population of the car has increased a lot and still increasing at
a high rate. With the increase in the car, the need of taking care for the car has also been
increased. Especially owners of the branded or sports car like to keep their car clean all the time.
So the need for the car wash has arises with the increased population of cars. But owners does
not like to leave their car in the car wash station for the whole day so again the need arises which
leads to the idea of mobile car wash station. Mobile car wash is car wash service provider who
drives to the customer place with all the materials required for the car wash. It involves all the
steps from washing to drying then waxing and other requirements for taking care of the car. It is
convenient for the owner to wash their car at a reasonable cost and convenience. Car wash
industry is growing at a faster rate in the world making an annual revenue of more than $5
billion. This is industry is growing at rapid rate of 5 percent per year. Mobile car wash business
is easy to set up as it involves low capital to start the business. It can provide service to the
customer at more affordable price than any other car wash stations. The key points before setting
a car wash business is surveying and data collection from different localities. Car population in
the location is also necessary. Living standard of the people and the average number of passing
by a road is some of the vital data which forms an important part of this business. After the
completion of data collection selecting the proper area is necessary to start the business.
checking the government rules and regulation which can affect the car population in a particular
location.
Venture description
A new business need to be formed with the proper business plan and expectation to get
financial gain. New business need to be setup for continuous growth with less amount of capital.

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The need of the customer must be kept in the mind and the lacking point in the market must be
analyzed. Then the need of fund and the source of fund are determined.
Planning to provide the customer with services like exterior car washing, interior car
washing, different types of polishing and detailed washing. Providing high quality service at a
reasonable cost is also used to get the competitors advantages. Pricing and the quality of service
is the only point of competition in this type industry. Hiring skilled employees at the affordable
price is also needed which is directly associated with the price that a customer pays. In the era of
digital and smartphone a business app will help to kick start the business. There will be different
types of customer, which are individual car owners, leased car owners, car dealers, and
businessmen’s. The area of operation is situated with 50 percent of businessmen’s who owns
luxury cars and they always want them to look nice. There are many car dealers in the location
which needs services for cleaning their car at their place. But there are few car wash station in
the nearby location which can lead to a competition. So the main objective of the mobile car
wash service is to provide premium car wash with detail service, maintaining a gross profit
margin, maintain a steady growth of the business and expanding the business area of operation.
For providing quality and detailed service, employees need to be satisfied for maintaining the
customer services.
Management
Starting a mobile car wash business as an entrepreneur is an appealing, as it is simpler
and less costly to set up than any other business idea. Making the business idea successful the
management must lead to the success with extensive research. Management includes the process
of administrating and controlling the affairs of the business which is regardless to the nature,
types, size and structure of the business. It helps in creating and maintaining the business

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environment to achieve the business goals efficiently and effectively. This business with proper
planning will generate high gross margin with a net profit within a year and can even earn a
respectable annual profit. Some of the management tips that are required in the mobile car wash
business are as follows:
 Defining the target market
 Applying effective marketing tactics
 Managing the workload
 Investing in new technology
 Providing varieties of services
 Valuing the client time
 Expanding the operation
 Finding new opportunities
 Knowing the limitations
Cost Reporting requirement Registration
$500 company registration Annual company tax lodged
with ATO
Register with the Australia
Securities and investment
commission
$ 100 Business name Registration for ABN
Register for GST

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Marketing plan
Main objective of the mobile car washing is to provide quality service. Different types of
strategy can be used like holding the old customers, expanding the market and developing the
brand awareness. Targeting market by the types of ownership like as below explained:
 Visiting local market and finding out interested customers. Offering discounts can also be
given to those who are interested
 Selling services to local car dealerships and providing limousine services to potential
customers.
 Face to face marketing plays the best role in any business. So, I would represent my
business via social media so that people will get to know about it.
 Branding: Good logo with business cards and dress code is also required to create
professional appearance.
 Flyers: It can be distributed to local businessman and few clients to develop solid client
base.
 New car owners – Owners of the new car mostly like hand wash instead of machine wash
as they take great care of their cars and bring often for detailed services. The objective of
this customer is to keep their brand new car clean all the time. So providing the service
according to the need of the customer can attract the specific new owner customers.
 Old Luxury car owners – Owner of old luxury car prefers this type of car wash service as
it is not possible for them to afford the expenses on old luxury cars. But they want to
keep their car in the best shape.

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 Sports car owners – This owner are mostly young who likes to take more care of their car
and give more importance to it. Their pride is attached to this car so they like to keep it
clean and have their car washed.
 Lifetime owners – This owners are mostly owned their car for more than five years and
they are attached to the car. They bring the car often for wash but like to keep their car
presentable and in good shape. They bring the car for wash when it gets dirty.
 Dealership – Car dealers do not use outside car wash services where the mobile car wash
services is convenient for them. They provide service at the dealer place and as per their
requirements.
 Local businesses – Local business must keep their car clean to maintain the goodwill
value but they does not like to take their car to the wash station as it is more costly and
time consuming. So they prefers more cost effective and efficient car washing service
which is provided by the mobile car wash.
Car Wash Sales
Car wash shop Mobile car wash Others

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Competitors analysis
Every business plan must consist of competitive analysis which is an important part of
the business. With the full awareness of the competitors business can strength themselves by
creating an effective strategies. The viability of the car wash industry is dependent on the
marketability of its product and services. Competitive analysis helps this industry in its growth
and income with the marketing strategy, innovation and operational trends. By narrowing, the
local market and presenting the research and analysis in terms of the size targeted market can be
set. Showing the competitive edge and strengthening will help to defend the competitor’s
strength in the market. Acknowledging the weakness is also necessary so that the ways to
overcome it can be find. While entering into the competitive sector with proper business plan
will help to understand the business process properly. Only with the full awareness and realistic
plan will help to get the core strength with the effective strategies so that the business can give a
strong fight to other competitors. This industry is full of challenges and opportunities if done
with proper understanding it can be a profitable industry.
Financial analysis
Financial analysis involves using financial data which helps to assess the company’s
performance and provide solution about the ways of improvement. It helps to analyze the
historical data with the projected data of the company’s future performance. This type of
business can be financed by personal investment or by taking loan from the external sources.
Proper funding will help the company to grow and ensure to retain the market control while
providing a direction to grow. Some of the important assumption which is needed from the
beginning is by recognizing the variable expenses as it is the important cost of any business. Its

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include cost of water, cleaning liquid, electricity and some other expenses. Some of the
important assumptions are as follows:
 Long-term finance must include ten month of interest repayment.
 Assume to be a sound economy without the modest pricing recessions.
 No unexpected changes in the local regulation can be seen.
Projected sales forecast for the operating expenses and revenue is as follows:
COST AMOUNT
Direct cost of automatic operation Chemical cost is 10 % of the annual revenue
and utilities cost is 14 % of the gross revenue.
Direct cost of self-service Cost is 12 % of the self-earned revenue
Variable and fixed expense Labor charges are estimated at $ 3000 per
month including some additional charges.
Repair and maintenance expense of Kits
includes $ 1000 per month for the monthly
services of equipment. Real estate taxes are
estimated at 5% of the land value. Insurance
is estimated at $2000 every year.
Depreciation Diminishing value method

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Risk and challenges
Every business has to face the risk and challenges during its business period but
maintaining the balance between the risk and challenges will help to get reward. Every business
has to take risk in their business especially at their growth stage. Some of the risk that is faced by
this type of business is as follows:
 Financial risk – The owners contribution in comparison to borrowing amount is less
which leads the business for having high gearing ratio.
 Market risk – Penetrating and gaining the desirable market is costlier for the business
with the fact that more competitors are present in the market.
 Human resources risk – This business requires skilled people who can manage the
situation and perform their work efficiently. To retain a quality employee it could be
costlier for the business.
 Environmental risk – Using of chemical to wash cars is harmful for the environment as
they consist of hazardous items. In some countries there is shortage of water which lead
to downfall of this business as car wash business requires lots of water in the cleaning
process.
 Economic risk – Interest rate can go up or remains low but the chance of increasing is
more which lead to high inflation and create adverse effect on the business.
Challenges faced by this industry are as follows:
 Chance of increasing the revenue is low due to huge competition in this industry.
 This type of business is mostly seasonal in most part of the world.
 Satisfying the customers wants is not an easy task
 There is majorly no time for doing marketing in this type of business.

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