If you have a passion for cars and love to clean, owning a detailing agency can be the best career choice for you. There are many potential clients for this business and the flexible hours can make this job enticing for many people.
Here are some basic steps you need to take to start a detailing business:
1. Choose a business entity
2. Find the right licensing for your state
3. Open a business bank account
4. Find funding for your business
5. Buy your equipment
It's possible to find fulfillment and financial security in running a car detailing company. In today's market, customers seek excellent service and a business that can handle all types of vehicles. Curious to learn more? This guide will help you understand how to start a detailing business and learn about any potential costs you may run into when opening a new business.
How to Start a Detailing Business in Five Easy Steps
Becoming a business owner may be easier than you think. There are five basic steps to owning and operating a business, but it takes time and focus to run a successful company for years. One of the first things you will need to consider is writing a business plan.
This is not something you legally need to do, but it will help you understand the overall goals you hope to achieve by owning and operating this business. Over time, you may find that your goals change as a business owner, and that’s okay.
As your business progresses, your business plans and goals may change, but the initial steps to open a business will be the same. Take a look at these five steps to take after your business plan is complete.
Step 1: Choosing a Business Entity
Choosing the appropriate legal structure is a key component of operating your company successfully. There will also be various tax advantages for each entity. Whether you're starting or expanding your firm, it's critical to understand what types of businesses you can open. Here are a few types of company structures you can choose from.
● Sole Proprietorship- One person takes responsibility for all debts of a business and all the profits. This is one of the easiest legal setups for a small business.
● Partnerships- This is when a business is owned by two or more people who are starting the company together. It's great for those who need more money for startup costs or want to expand the business in a short amount of time.
● Limited Liability Company or LLC- This is a great option for auto detailing businesses because it protects an owner's assets when or if anything happens to the business. This is a hybrid structure that enables owners, partners, or shareholders to restrict their personal liability while taking advantage of a partnership's tax and flexibility advantages.
● Corporations- There are several different types of corporations you can form as a business owner, especially if you already own the business for a amount of time. The law views this type of business as a distinct entity, and as such, it has legal rights separate from those of its owners. It may sue and be sued, acquire and sell property, and sell ownership rights in the form of stocks.
For an auto detailing business, it may be the easiest to open an LLC or a sole proprietorship to start with. Most states will allow a business owner to change from an LLC to a different business type with the proper forms. However, each state is different, and you should confirm your business can change to a different business entity in the future if that is something you may want.
Many states will allow you to form a business online with little to no hassle. Each state will have different fees connected to opening a business online and there will be various filing fees depending on what type of business entity you choose.
Step 2: Finding the Right Licensing
To provide services and run your company legally in a specific state, city, county, or authorized area, you will need a business license. It does not matter if you purchase a space or run a home business; a license will be necessary to provide customers with your services.
Keep in mind that on top of having a business license, you may need a specialized license to operate a car washing service in your state. This will significantly depend on your services and where you plan to run your business.
If there is a local city hall near you, the clerks may understand what sort of license you need to open your business. It is worth stopping by, to learn about the city and state requirements. This will help you avoid any legal trouble in the future. If you are still unsure where to start looking for a license to operate your business, the Small Business Administration or SBA may have the information you need.
Step 3: Open a Business Bank Account
No matter what type of business you own, you will need to open a separate bank account from your bank account. This will help you keep your business and personal life separate, all while staying organized. On top of that, many banks will help you set up a way to receive payments from customers.
Opening a business bank account is not difficult, provided you have the necessary documentation and information. Here are some of the documentation you may need to open a bank account for your company.
● The certificate of incorporation
● The employment identification number (EIN)
● The company formation paperwork
● The business license
If you are self-employed, your social security number may be used in the same way as an EIN. When you give the bank all of the necessary information upfront, it will expedite your approval time.
Generally, banks will assess your application within one to seven days and it could take up to four weeks to open a business bank account. Each bank will have different approval times and request different pieces of information to fully set up your account.
*TIP* You should never use your personal bank account for your business. Why? A personal account is meant for your personal bills. A business account is meant to take payments and pay business expenses and vendors. Mixing these two could result in having a hard time paying the right taxes at the end of the year.
Step 4: Find the Right Funding for Your Detailing Company
After you've established a company bank account, it's time to seek capital, if necessary. This will also depend on the services you want to give and the equipment required to provide them. While you may have enough for basic supplies, it may not be enough capital to sustain your business in the long run.
There are numerous types of grants available, all of which will help you with startup costs and fees. Most times, the initial investment of opening a business can be one of the most expensive parts of operating a company.
If you are unable to get a grant, you may need to consider obtaining a loan to get your business started. The bank that you choose may have options for small business loans. Finding out this information will help you decide if you want to try to get a small business grant or take out a loan for your business.
Step 5: Purchase Equipment to Start Providing Services
A detailing steamer will serve as the hub of your car detailing business . This tool will provide the high-pressure and high-temperature steam required to clean automobiles. Once you have chosen this , you can focus on other equipment and tools you think you may need. Here are some options to consider when thinking about what products you will most likely need to open your detailing business.
● Brushes and Sponges- If you are going to start washing cars inside and out, you will need different sponges and brushes that can cater to this service.
● Detailing Towels- You won’t be able to use just any old towels; you will need to purchase detailing towels to help get an even clean on each car. High-quality towels will help you clean and polish every vehicle.
● Buckets- You will need separate buckets for washing solution and for water. Depending on the types of services you offer, you may need to invest in many buckets.
● Equipment Cart- If you provide many services, you will need some type of cart to keep your equipment organized. This will also help you move around from one spot to the next, and is a good option for shop owners.
As your business expands, you will need more equipment to meet the demand. You may start adding employees once your clientele picks up, you will require more tools to keep up with the workload. It is okay to start small, and you may want to offer limited services until you can afford to purchase new equipment.
However, if you want to start off providing several services, this is when funding becomes important. You will need initial capital to find and purchase high-quality products your business can use.
How Much Will It Cost To Start a Detailing Business?
You must evaluate the typical cost of starting a detailing service. Depending on the business structure and services you provide, the cost of starting an auto detailing business may vary from $5,000 to over $100,000. You'll need to consider if you can self-fund it or whether you'll need to borrow money from a bank The United States SBA offers a comprehensive guide on financing a small business.
Here are a few questions to answer when looking at start-up costs.
● Will you need to purchase a front or land?
● Will you be offering a mobile service?
● Is this going to be a home business?
● Do you need specialized high-quality equipment?
● Do you have any equipment to start with?
Your answers to these questions will help you determine the amount of capital you need to start your business. Keep in mind that forming a business entity, buying licenses to operate your business, and finding the best equipment will all require money to start. You may be able to cut costs by operating a home business or by already having the tools.
Finding the Right Insurance for Your Business
General liability insurance has been designed to protect businesses against a variety of dangers. Insurance helps safeguard your car detailing company from the hefty expenses associated with litigation. Without taking this step, you should not be detailing cars for customers. This is something that many new business owners think they can skip, but it is one of the most essential steps to take.
Right now, there are many companies that offer general liability insurance. It's as simple as finding the best fit for your company. You need to consider what advantages each company provides your business and if you will be adding employees onto your payroll in the next few months. The more your company grows, the more likely you are to need some type of insurance. It's better to get it at the very beginning.
It's never been easier to apply. You may apply online and get a quote within minutes. You may always increase or decrease the amount of coverage at a later date.
Marketing Your Detailing Business
Once you've taken the steps to legally open your business and launch it, you will need to focus your efforts on marketing. Why? This is the best way to attract customers and gain loyalty or a following for your business.
This is what marketing includes:
● Blogging/social media
● Advertising/social media ads
There are tons of ways to market your business, and you don’t have to choose just one option. You can focus on multiple things if you have time to do it. Marketing is a concerted attempt to spread your brand's message through many platforms, hoping that enough of the message reaches your clients. One of the critical things you can focus on is simple but repetitive marketing efforts. The more someone sees your business name, the more likely they will remember it in the future.
The Advantages of Opening an Auto Detailing Business
There are several advantages to starting your own car detailing company that justifies the amount of time you spend opening it. Not only is it lucrative, but you become your own boss. If that isn’t enough reason for you, maybe the following benefits will help you with your decision.
You Set the Prices
Due to the high level of competition in the automobile detailing industry, all charges vary based on location, services, and the kind of vehicle models working with. You can negotiate with each client on the price. There is no standard fee for jobs like this. The more care a car needs, the higher you can charge. This may change as your business grows and you add more employees.
This Is an In-Demand Service
Regardless of their age or condition, vehicles on the road should be seen as prospective customers. Many drivers on the road need help to maintain their cars, so you’ll never be out of a job as long as you keep on advertising. All you need to do is find ways to attract potential customers through marketing.
There Is a High Earning Potential
As an owner of a business that is always in demand, your revenue potential is almost unlimited. You can make as much capital as you want . There are cars in need of servicing everywhere. This means the time and effort you put into your business can significantly pay off.
You Can Set Your Business Hours
You will be your own boss and owner of your company. You can easily set your hours and work full or part-time depending on the number of clients you have. When you start adding in other team members, you may decide that schedules should become more structured.
If you’ve been wondering how to start a detailing business, you no longer have to wonder. You can become your own boss by opening up an auto detailing business, and this means choosing who your customers are and setting your hours. If you are passionate about cars, this is a booming career that will lead to success.