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Automobile Detailing Business |
Build a successful business by satisfying your customers’ desires for an immaculate car.
Guide #1146 - $85.00 (print version)
Also available as a downloadable e-book for $65.00
Product Description What began as a small cottage industry in Southern California has blossomed into a thriving nationwide business where people just like you are earning big bucks.
Auto detailers go over a car in detail, waxing and polishing the paint, chrome and wheels and thoroughly cleaning the seats and upholstery until the car has a like-new showroom shine. Startup costs are minimal, which makes auto detailing a terrific business if you're an entrepreneur on a shoestring budget.
Plus, there are two ways to make money: First, by detailing cars in volume still in the dealers' showrooms. Second, by detailing private parties' cars. If you like cars (and working for yourself), an auto detailing service may be the business for you.
This guide makes an ideal homebased business.
Click Here to Download Chapter One
Table of Contents
Introduction
Chapter 1
Start Your Engines The Big Picture Historical Perspective Earning Potential The Opportunities The Challenge Chapter 2
The Well-Oiled Business Machine Cleaning Up Pricing Your Services Parts And Labor Tales From The (Store)Front Padding With Product Card ’Em Weather Beaters Chapter 3
Taking Care Of Business: Your Guide To Market Research Warning! Warning! Rev It Up Conducting Market Research Shift Into Gear Gun It Map Your Course Chapter 4
Throttling Up For Success Sole Proprietorship Partnership Corporation Limited Liability Company The Name Of The Game Staking A Name Claim Vrooooooom With A View Business Details Chapter 5
Under The Hood: Choosing A Professional Pit Crew A Powerful Ally Money Managers Managing Risk Types Of Insurance Commercial Garagekeeper’s Liability Insurance Property Insurance Business Interruption Insurance Workers’ Compensation Insurance Other Types Of Insurance Chapter 6
Detailing Tools And Toys Power Tools And Accessories Cleaning Products And Tools Personal Protection Equipment Uniforms And Hats Special Mobile Equipment Fixed-Location Bays, Fixtures And Furniture Waiting Room Necessities Office Equipment And Furniture Personal Computer Software Fax Machine Telephones, Answering Machines And Pagers Copy Machines Office Supplies Security Equipment The Moment Of Truth Chapter 7
A Garage For All Seasons: Housing Your Business Mobile Machinations Shop Talk Location, Location, Location Building Basics Buying Vs. Leasing Layout Sign Of The Times Chapter 8
Finding Good Help Labor Pool The Usual Suspects Back To School The Little Details Taking The Plunge The Benefits Of Belonging Taxing Issues Workplace Safety Issues Chapter 9
Owner’s Manual: Your Guide To Professional Development Industry Associations Industry Publications Web Sites, Publications And Chat Rooms Yearning For Learning Certification Product Seminars Trade Shows Chapter 10
Driving The Competition Setting The Wheels In Motion Shifting Into High Gear Card ’Em Paper Promotions Power Of The Press All Booked Up Talking Up Your Talents Chapter 11
Internet Marketing And Research Your Own Cyber Space Keeping In Touch Building Your Site Hosting Duties Chapter 12
Tooting Your Own Horn News Releases Newsletters Writing And Producing The Newsletter Feature Articles Submitting Your Manuscript Networking Public Speaking Engagements Chapter 13
Financial Fit And Finish Operating Income And Expenses Mortgage/Rent Phone Utilities Postage Licenses Owner’s Salary Employee Wages Benefits/Taxes Advertising/Promotion Legal Services Accounting Services Merchant Account Supplies Insurance Transportation/Maintenance Subscriptions/Dues Loan Repayment Online Services Miscellaneous Expenses Receivables Forecasting Receivables Collecting The Cash Bookkeeping Solutions The Cash Kings Help From Your Favorite Uncle Do-It-Yourself Financing Chapter 14
The Fast Lane To Success Why Businesses Fail Your Plan Of Action Bay Watch Your Formula For Success Chapter 15
Glossary Chapter 16
Appendix Automobile Detailing Resources Chapter 17
Index
Book Excerpt
Chapter 1Start Your Engines
When it comes to an industry with wide-open opportunities for enterprising small-business owners, auto detailing ranks right up there with the best of them.
And small wonder. Americans’ passion for cars, coupled with busy, fast-paced lifestyles that leave them with little time to take care of those vehicles properly, has created an environment rife with potential for today’s aspiring detailer. Just consider this: A recent survey by carlove.org indicated that 84 percent of American car owners love or like their cars, but only 15 percent of those take excellent care of the object of their affection. Does that mean the other 69 percent could be your customers? You bet! In fact, the 2002 International Carwash Association Study of Consumer Car Washing Attitudes and Habits showed that 42 percent of exterior carwash customers would wash their cars more often if they were offered a “portering” option (12 percent), if they had more time (17 percent), or if it took less time (13 percent). A professional detailer can meet all these requirements.
The Big Picture
Despite the detailing industry’s enormous earning potential and small-business opportunities, there is surprisingly little information available about it in terms of statistics and trends. The industry doesn’t have its own professional association (the closest thing is the International Carwash Association, which has a detailing component). What little statistical information is available on the numbers of detailers, wages and other pertinent information is several years old. Even the federal government doesn’t pay much attention to the profession (except for the IRS, that is). Detailers aren’t singled out in the Bureau of Labor Statistics’ Occupational Outlook Handbook (published by the U.S. Department of Labor); rather, they’re included in the “Equipment Cleaners, Helpers and Laborers” category (which no doubt includes those who clean everything from industrial manufacturing machinery to dry cleaning equipment). Likewise, the Bureau of the Census has a similar “Cleaners of Vehicles and Equipment” category, which presumably includes carwash employees. But the Census Bureau offers no other information about these employees the way it does for hair stylists, longshoremen and other professionals.
“There’s not a lot of official recognition for this profession and no statistics,” confirms auto reconditioning expert Prentice St. Clair, owner of Detail in Progress in San Diego. “That’s probably because it’s such an easy business to get into that three-quarters of the businesses are ‘under the radar.’”
According to the latest statistics available from Professional Carwashing & Detailing magazine, there are more than 8,000 independent detailers in the United States. According to R.L. “Bud” Abraham, owner of Detail Plus Car Appearance Systems of Portland, Oregon, and one of the detailing industry’s top experts, today there are nearly 14,000 detailers in the Yellow Pages, which is a 71 percent increase over the number in 1980. In addition, there were 15,000 carwashes in 1980, 10 percent of which did detailing. Today, nearly 85 percent of the nation’s 17,000 carwashes do some form of detailing. Considering there were nearly 130 million passenger cars on the road in 2002, according to R.L. Polk, a Detroit consumer research company, that’s not a lot of detailers to go around. So the outlook for success in this industry is excellent.
Historical Perspective
Although detailing came into its own as an industry fairly recently, the profession actually dates back to the days of the horse-drawn carriage, which were lovingly hand polished and spit-shined. But it really gathered steam with the advent of vehicles that had the horses under rather than in front. One of the pioneers in what would become the detailing product industry was furniture polish maker Frank Meguiar Jr., who, in 1901, mixed bottles of wood polish one at a time using an eggbeater. He soon realized that his product also could be used on those early automobiles, which were made of wood and coated with the same finishes used on furniture, and a new industry was born.
Until the 1940s, owners of elite motorcars were the most frequent consumers of detailing services. Then, after World War II, car dealership owners realized that reconditioning previously owned cars would increase their value and thereby increase the dealers’ profit margins. As a result, many dealerships added full-service detailing departments, which soon were prepping new cars for delivery. But the recessions of 1980 and 1982 forced many dealers to reduce or lay off their detailing staff, which opened the door to new opportunities for independent detailers.
Not coincidentally, the consumer detailing market started to heat up at around the same time. As cars became more expensive, consumers started keeping their vehicles for longer periods of time. In 1969, for example, when the average price of a new car was $3,708, consumers kept their cars an average of 6.4 years. By 2001, there were 216 million vehicles in use (40 percent of which were trucks), and the average price of a new car had increased to $14,449. Likewise, the length of time consumers kept their cars increased to an average of nine years. Now that the average sticker price for a new car or light truck hit $30,481 in December 2003, according to an analysis by auto price tracker Edmunds.com, it’s likely that consumers will be even more likely to keep parking their same old cars and trucks in the garage.
Another factor also influenced Americans’ predilection to keep their cars longer: The Fed erased the tax deduction for auto loan and credit card interest in the ’80s. Suddenly, a new car loan was an even higher liability than before, and people started looking at their trusty old cars with infinitely more fondness. Take a look at the charts above and on page 1.4, which illustrate how long people are keeping their cars today and how many miles they’re driving annually.
All this thriftiness represents a great opportunity for a new detailer. Many owners of older vehicles want to keep their rides in top condition, particularly those vehicles that have weathered a couple of presidential administrations. But keep in mind that people who wash their cars at home in the driveway are not likely to be your customers. The 2002 International Carwash Association Study of Consumer Car Washing Attitudes and Habits indicated that nearly 86 percent of home washers who responded to the survey had not had their car detailed in the previous year. So your challenge will be to find the consumers who take pride in their vehicles but don’t have the time or inclination to keep them looking showroom-ready.
Earning Potential
While there aren’t many hard and fast statistics about the scope and size of the detailing industry, it’s easy to do the math to figure out what your potential earnings could be. Let’s say you charge $185 for a full interior/exterior detailing. Detail five cars a week, and you’d earn $925 before taxes and expenses. At that pace, your gross revenue would be $48,100 per year. Promote extra services like paintless dent repair, vinyl and leather repair, and paint touch-up, and you can easily get the price of a detailing up to $400 or more. Detail just one extra car a week at $400, and you’d add nearly $21,000 to your gross revenue. That’s $69,100 gross for a total of just six cars a week, 52 weeks a year.
Some detailers make even more. One California mobile detailer we know of, who has eight employees, has had annual sales as high as $250,000. On the other hand, Professional Carwashing & Detailing magazine says the hourly pay for a detailer ranges from $15 to $75, while National Detail Systems, which sells auto detailing and reconditioning systems, estimates an independent detailer can earn $30 to $60 an hour, or $1,000 to $1,500 a week, by detailing two cars a day. The amount you can earn is probably somewhere in the middle, but make no mistake: The sky’s the limit for a new detailing professional.
The Opportunities
There are three types of detailing operations: Mobile, express and site-based. Mobile businesses are the quickest and easiest type to launch, since all you have to do is buy some professional equipment and chemicals, as well as a van or trailer to haul it around in, and take to the road. This is also the most cost-effective way to enter the business, as there’s no overhead other than the cost of your professional products and your vehicle, and no mortgage or lease payment. Instead, you work in parking lots, at office complexes, at customers’ homes, and possibly in your own garage.
Express detailers often work in carwashes or at auto dealerships. This is a “while you wait” type of business—vehicle owners turn over their keys and wheels so you can do your magic, then get back a sparkling clean vehicle in a set period of time—say, 15 minutes. Although both carwashes and auto dealerships sometimes have their own detailing staff, there are many opportunities to work as a subcontractor at these businesses. And the arrangement is usually pure profit—the owner is usually so thrilled to have someone on site that there’s no fee for the use of the space and utilities. This is particularly true of dealerships, where perfect appearance is paramount when it comes to high-priced new and used cars.
Industry experts say that the average price of an express detailing at a carwash is $36, including the carwash. The labor rate for the detailing is just 20 percent, and supplies are just a few dollars, so the profits can be very tidy, indeed, considering how little time is necessary to do the work.
“I think this is the direction the detailing industry is heading,” says Dave Echnoz of 14/69 Carwash Supercenter in Fort Wayne, Indiana. “Twenty minutes, no appointment—it’s great for someone who can’t be without a car or doesn’t want to rent a vehicle.” Fixed-location detailers work out of a building dedicated to detailing. Their overhead is certainly higher than that of a mobile or express detailer, but they have a distinct advantage over the mobile folks: a roof over their heads, so inclement weather that would shut down a mobile detailer is never a problem. With that roof comes a mortgage or lease payment, property taxes, overhead and myriad other costs. But the trade-off is that site-based detailers can make a lot of money—as much as six figures or more, depending on the size of the operation. If you’re lucky, you might be able to find a detailing shop or service station up for sale that already has all the tools and toys you need, like service bays and professional equipment. If not, you’ll have to remodel, but the trade-off is that the finished shop will be exactly the way you want it. Incidentally, some site-based detailers offer express services for customers who are in a hurry. The most common express services are waxing and carpet cleaning.
There’s one other type of detailing operation that bears mentioning. Detailing franchises offer another quick way to get into business with a minimum of effort (and cash) upfront. These turnkey operations provide you with an established name, which gives you an instant reputation; resources to help you do business, including advertising and marketing tools and assistance; and sometimes even equipment like mobile trailers. The franchise fees for these operations vary, but they can run tens of thousands of dollars—which can be about as much as establishing your own site-based detail shop would be. For the purposes of this book, we will assume that you are starting your own business from scratch, but just in case you’re interested in franchises, you’ll find some listed in the Appendix.
The Challenge
Now your mission, should you choose to accept it, is to find the people who have disposable income they’re willing to part with and all-American pride in their vehicles, as well as automotive professionals who prefer to subcontract the work rather than having detailers on staff. Among the potential prospects are:
Average Joe (and Josie) consumers who are in love with their cars (carlove.org says 64 percent of car owners talk to their cars and 27 percent give them pet names, so you know they’re out there)
White-collar professionals with high profiles (including but not limited to physicians, lawyers and corporate executives)
Sports car owners (to whom appearance is everything—including under the hood)
People who lease cars (since a professional detailing can reduce the chance of incurring ghastly end-of-lease wear-and-tear charges)
Show car/classic car owners/car buffs who show off their vehicles for love…and money
New and used vehicle dealerships (the pace can be grueling and the work doesn’t always pay top dollar, but there’s usually a lot of work for a new detailer)
People who are selling their own cars in the local classifieds (currently a huge untapped market)
RV dealerships and their customers (still another gold mine of possibilities)
Automotive centers like auto malls
Carwashes (usually as an express detailing operation)
Auto repair shops (including collision shops)
Limousine companies
Hotels with concierge service that might want to offer detailing as a premium service to guests
Gas stations/garages that offer complete automotive services
Other prospects include boat and airplane owners (gotta look “fly” as they cast off or taxi away from the terminal) and railroad companies (don’t worry—Meguiar’s has you covered with the appropriate train polish). Many detailers start with cars, then segue into other types of vehicle detailing as a way to keep busy when the weather is poor. This type of detailing work is also a wide open market for entrepreneurs.
So are you ready to clean up in this promising industry? Great. Then turn the page so we can get your new business cranked up.
