Before embarking on writing a business plan for starting a car wash, a definition of what a business plan is in order. A business plan is a document to identify an opportunity, research why this opportunity is profitable and the steps needed to capitalize on the opportunity. The business plan can be a formal document or it can be written on the back of a napkin but the mere act of writing the idea down forces you to get the idea out of your head and on paper which helps find hidden business flaws and makes you think carefully about each phase of your business.

Creating a business plan is something anyone can do, even if you don’t know anything about business or finances. Even though the business plan is critical to getting the idea off of the ground, many entrepreneurs procrastinate when it comes to preparing a written plan. If you don’t know anything about business or finances, this is the best time to begin learning as the chances of your business being successful will be limited without this knowledge. Just as a builder won’t begin construction without a blueprint, entrepreneurs shouldn’t rush into new ventures without a plan. The old saying that “those who fail to plan, plan to fail” is very relevant when talking about starting a business. SBA’s statistics claim over half of new businesses fail in the first three years and the common factor is poor planning or under-capitalization (which is also poor planning).

Getting Started

The first step in creating a business plan is just getting started. Writing the business plan may seem overwhelming at first, but if you break the plan down to bite sized pieces and work on one section at a time won’t seem as daunting. Begin with what you know first and describe your business and your product or services. Work towards the more difficult subjects such as marketing, operations and financials. Don’t worry about it being perfect now, just get the concepts on paper – expand and refine later. If you get stuck on a section in the plan, skip it for now and come back later when you have more details.

Who is your audience?

When writing your car wash business plan, you need to keep in mind who your intended audience is and why you are writing the plan. Why? A plan for the bank will be less interested in the exit strategy and return on investment than one for equity investors. Additionally, a plan for written for internal use will be different than one looking for financing as a bank is not necessarily interested in detailed operations of the business.

Structure

Business plans tend to have a lot of elements in common. While there is not a format that all business plans follow, there are generally accepted guidelines that most follow as the order in which the subjects flow are not random. The Business Description of a business plan is aimed at painting a picture of your business and why this business will be successful. The Marketing, Management and Operations sections are researched and a strategy of how your business will compete and operate is developed. Last financial projections show in numbers what you explained in the business plan for the sales and expenses.

Breaking these three major sections down even further, a business plan consists of six key components:

Executive Summary

Business Description

Marketing

Managers & Employees

Operations & Location

Financial Projections

In addition to these sections, a business plan should also have a cover, title page and table of contents.

How Long Should Your Business Plan Be?

The answer that nobody liked in school applies to a business plan which is, “as long as it needs to be”. The more complex a business or the more sophisticated investors or funds requested will increase the length of a plan. An average car wash business plan narrative should be 4-15 pages plus financials and appendix items.

Business Plan Outline

Executive Summary

The executive summary is the first part of the business plan but is the last to be written. It gives the reader a quick glance of what your business proposal is about and what you are asking for. This part is critical as most readers will scan this section before deciding whether to read further.

The executive summary should typically be about one-half of a page in length and include what you would cover in an elevator pitch such as:

Explain the condensed version of the business concept

Product description or service proposition

This section should emphasize any unique features or benefits that what is currently in the industry or area, aka why would someone buy your product over the competition.

The demographics of your market

The Management team

When the anticipated start date is

Your equity position

How much are you asking for

Concise is the key in the executive summary. You will go into more detail later in the business plan.

Business Description

The purpose of the business description is to objectively describe the car wash business details and future potential include:

Mission

What the business does

Description of products and/or services

Industry information

Business Organization

Status of the business (start-up, expansion or purchasing)

Current and future goals

Any facts or figures should be noted and sources included in the business plan. This information is important should you need to defend your data and assumptions. The business description is where you are trying to paint a picture of the potential of your business along with the facts to support it. Try to inject energy and excitement to get the reader enthusiastic about the idea, without going overboard of course.

After describing the business, it is time to describe and additional products or services your car wash is selling. Keep in mind that it is important to show how your products and services are better than the competition. If you don’t have a good answer than you should rethink your strategy. What is it about your car wash that is going to get the customer to change doing business with the competition?

Marketing

A very important part of your business plan is the marketing section. Regardless of the quality of your products and your services, your business will be lost in the clutter of advertising. If you don’t know your customers, how will they ever find you? All of this begins with doing some research.

Customers: Who Is Your Market

The first step is to determine who you are going to sell to by identifying common characteristics of your market such as age, income, race, religion, education, interests and/or geographic locations. While everyone will want to wash their car product how are you going to effectively advertise to everyone and still make a profit? What you need to do instead is determine the group or groups of people who are most likely to use your car wash services and market to them. After all you are trying to generate a positive return on your marketing dollars, so use them wisely.

Competition

In today’s ultracompetitive marketplace, there is going to be competition, no matter how creative your business concept is. Attempting to run a portion of your car wash business better than the competition may be a difficult challenge so it is often better to focus on planning on being different and competing with them less directly. Can you serve a particular market niche such as the elderly that isn’t being looked at? Can you identify a unique operations/marketing/distribution strategy with a mobile approach? Even if you don’t have direct competition in your area meaning someone selling the same or similar products/services, you will have indirect competition for replacement products/services. If you indicate in your plan there is no competition it will be viewed that there is either no market for your product or you have not done your research.

Optimally you will want information on at least three but no more than five competitors. List information about who they are, how long they have been in business, location, products or services offered, perception on pricing, quality, etc. and compare your advantages and disadvantages. If the information you are looking for is not available online, you may need to pretend you are a customer to get some of this information.

Distribution – How Will You Get the Product To The Customer: By looking at who your market and competition is, you will have an idea of how to get your product to them. Perhaps through your research you will find a strategic advantage to serve the customer that the competition does not.

Promotional Strategy

With the above steps researched, the promotional strategy follows. The promotional strategy is where most entrepreneurs fail as they use the blanket statement that they are going to advertise in the newspaper, radio and/or television without thinking through the process or the customer. The promotional strategy provides you a map of how you are going to reach your market in the most efficient manner possible. Advertising is expensive, use it wisely.

Sales Projections

On of the more difficult areas of the business plan is coming up with sales projections. This number is probably going to be wrong and that’s ok. What you want is a figure backed up with justifiable data. Just grabbing a number out of the air saying you will make $300,000 won’t work. There are many sources to help come up with this number including:

Industry journals

Trade groups

Car washes in similar demographic areas

Industry experts

Census data

Pricing

The effects of pricing play a large role on how your product is perceived in the marketplace. Price too low compared to the competition and your product could be perceived as cheap and unreliable. Price too high with the features and benefits of your product and few customers come through the door. While this is a complex issue, here are a few things to keep in mind.

Make sure you can make a profit at whatever price you are selling at.

If you want to have lower costs and “get your foot in the door” it may be better to offer discounts or coupons initially until your business is better known.

Don’t be afraid to charge more for your product or service than the competition if you have something of more value to offer.

Pricing is the easiest of the marketing mix to change. You may find that a large competitor will under price you to ensure you can’t make a profit and your car wash goes out of business.

Management & Employees

In this section you would describe who is going to manage the business on a daily basis as well as provide strategic direction (if these positions are separate). Each of these people need to have a brief biography included as well as a resume in the appendix. Try to show how the experience and education of these people will be able to successfully execute the strategy in the business plan and succeed. Many times the owner may not have the specific experience for this business, so it is very important to pull their other professional experience in and explain how it will make for a successful operation. Next, a brief explanation of the employees is in order including:

What positions need to be filled

When they need to be filled (This is important in developing financial projections as you may have some employees come on after you start)

How much they get paid (Be sure to calculate payroll taxes as well, estimate 15% if not sure)

It is also recommended to add the professional and advisors to your business. These people include:

Board of directors

Consultants

Accountants

Attorneys

Bankers

Mentors

Operations & Location

The operations and location section of the plan illustrates how you are going to make or acquire your product and information about your business location.

Operations – Explain how and where your products or services are made. A few points to include in your plan

How does your car wash operate, what steps are in your service?

Who are your suppliers?

What are the terms and lead time for this product?

Location – Location is where you will be doing business out of. If you are in the classic, I can’t get my location until I get a loan so I can’t finish my business plan scenario, list what features you are looking at in a building along with average prices or rents and pad that number a little just in case. A few things to add:

Department of Transportation traffic count – most states have this information online to show how many vehicles pass your location each day.

Building description

What is the size

Where is it located

Specific reasons for this property

Proximity to suppliers, roads, airports, railroads, and shipping centers, etc.

Zoning

Average utilities – Be sure to get the last 12 months from the electric company if the building had been occupied. This could be an expensive lesson from a dishonest landlord. If you are opening a new location, try to talk with other car wash operators in a non-competitive area to get a estimate

Add pictures to the appendix

Add a floor plan to the appendix

Purchase price or monthly rent/lease

Include sales/rent/lease agreement in appendix

If building or renovating be sure to include quotes as this is an area frequently underestimated in costs.

Financial Projections

Financial projections are placed at the end of your business plan, before the appendix but it a very critical piece to the plan. The three must-have financial statements are a cash flow statement, a profit and loss statement and a balance sheet. The information already provided in the narrative portion of the business plan must match the financial projections. Most financial projections are three years in length. It is a good idea to include a Notes & Assumptions to Financial Projections page to both help make sure all of your numbers come through and provide an itemized list to provide clarity for the reader.

Notes & Assumptions to Financial Projections

Loans

Break out each loan (building, equipment, inventory)

Amount

Interest rate

Length

And any monthly costs not discussed in business plan narrative

Cost of goods/inventory

Advertising

Employee wages

Insurance

License & fees

Miscellaneous

Professional fees

Rent/property taxes

Repairs & maintenance

Supplies

Telephone

Utilities

Vehicle expense

Etc.

Anything else that needs to be explained in the financials that is not in the narrative

Financial Projection Sections

Startup Expenses – These are all expenses you will incur prior to opening your car wash. It is recommended to have quotes available or in the appendix for the larger items. It is also recommended that you pad your numbers some as there will always be unexpected expenses that were not accounted for.

Sources and Uses of Funds – This section details how the loan money will be used (inventory, car wash equipment, repairs and improvements, working capital, etc) and who is providing it (bank, investor or owner). You will likely need to be injecting 20% of your own money and maybe more depending on the risk assessment of the business and your personal finances.

Cash Flows – The cash-flow statement is one of the most important pieces of your business plan. It shows a schedule of the money coming into the business and expenses that need to be paid and whether you have enough cash to sustain the business gained during the warm month to cover the costs during the winter months. Every part of your business plan is important, but none of it means a thing if you run out of cash. Should this number be negative, you either need to raise sales, reduce expenses or have more cash. Your cash flow statement will typically be three years in length with the first year analyzing the monthly figures and later years by quarter. Don’t be intimidated with the cash flow statement as it is merely a future look into your checking account.

Profit & Loss – This statement, while similar to the cash flow statement but illustrated annually looks at the effects of non-cash charges such as depreciation and amortization to get an accounting overview of the operations of your business.

Balance Sheet – The balance sheet is a summary of the value of all assets, liabilities and equity for an organization at the end of each year. A balance sheet is often described as a “snapshot” of a company’s financial condition and will show the value of the business over time.

Personal Financial Statement – If you are looking at bank financing every person who will have a 20% or more ownership position will need to provide a personal financial statement to show how effective they are at managing your money. This statement will show your assets (checking & savings accounts, cd’s ira, 401K, valuables, home, vehicle, etc) as well as assets (mortgages, credit card bills, installment accounts, etc)

Appendices

Appendix items are various pieces of information that help make your case. Include details and studies used in your business plan; for example:

Quotes for items over $500

Resumes of the management team

Industry research

Demographic data and trends

Maps/floorplans/blueprints of location

Leases and contracts

Letters of support

There is a lot to creating your business plan but will definitely make your business stronger. While it may seem easier to have someone else write your plan, there is no substitute to writing it yourself. This is your business and by writing it yourself you will have a better understanding of your business and strategies for success. There are also many free business plan templates and workbooks available on the web to help you get started. You can use these to help get started creating your business plan and then modify it for your car wash business.

For more free articles and resources for starting a car wash are available at www.StartingACarWash.com.

Additionally, business plan help can be found at www.TheBusinessPlanFactory.com

When you start a business it is really important to put your plans down in black and white. It will help you focus and decide on your targets, development plans, priorities, financial requirements and profit forecasts. It should reveal any weaknesses to you and help you structure your business effectively to avoid any future problems – enabling you personally to make decisions about how you are going to run and grow your business.

A business plan is an essential tool to making sure your new business will be a success and to focus your efforts.

Your business plan, as well as being useful as an internal document for your own use, can also showcase your aims to external bodies, such as when you need funding such as a business start up loan, grants, are seeking partners or are selling your business. It will be essential if you are looking for a UK small business government loan or UK small business grant.

A good business plan will describe and sell your business, the market, your intended strategies, financial requirements and projected targets. A well-drafted business plan is especially valid when you apply for financial help with your start-up, and will help convince a lender that your business is worth investing in. Here’s an example of what you should include in your business plan.

Business Plan Example

Executive Statement

The first and most important part of your business plan should be the Executive Statement. This is where you explain what your business is all about and how it is going to fill the gap in the market. This is the opening and needs to grab the attention of the reader with the highlights and key points of your business plan.

Make sure you describe the type of profit you hope to achieve and the investment required to meet this goal. Some lenders and investors make provisional decisions based on the executive summary. The summary should be concise and ultimately interesting, as when you are seeking finance for instance, you must realise that your business plan will be one of a pile and needs to stand out. It is usually easier to complete this summary of your plan after you’ve completed the rest.

Your Business Overview

This is where you state what your business is all about in the form of an overview : describe your product/service and how your business will operate, the existing market and why your business will succeed, your business history, when you began or are planning to start up, the legal structure of your company and your vision for the future of your new business. Include the pros and cons of your product and how you will develop it for success.

Marketing

You need to show evidence of a market for your product or service: existing competitors, likely customers and the appeal of your product; how you plan to sell your product – online, by telephone, from your premises. Detail your plans for promotion and advertising for your new business.

You may need to carry out some market research – directly from customers and also using data and information from other sources, such as business organisations and government agencies.

Detail what your business will provide, illustrate that there is a market and any shortcomings of your competitors. For success you really need to offer something better or more original than your competitors. Your product or service preferably needs a ‘Unique Selling Point’ – an edge that will make your business the customer’s first choice.

Management

Provide details about the people involved in running the business:

Who is going to run the business? Are you planning to be a sole trader, partnership or limited company? You will need to decide the number of employees, business premises and prospective suppliers.

Include the skills of those involved.their skills and experience, strengths and weaknesses of the business. A strong management team will make investors more confident.

If you are a one-man band stress your own skills and enthusiasm and your plans for the future, which may involve recruiting further help when you become successful and expand.

If finances aren’t your strength then you need to make it clear that you will be taking financial advice from a professional, so provide details.

Finance

Provide details of your expected monthly income and expenditure, the projected profit and overheads and the turnover needed to break even. State the capital needed and how you intend to repay any loans. Include your budgets and ensure your sales forecasts are not over-estimated.

Risk Assessment

It is always best to face what could go wrong and plan for the pitfalls as well as the success, so you have an emergency plan in hand. So be honest at this point and list any risks involved and how you intend dealing with them.

Try to make your business plan clear and simple. If you want to add statistics or relevant data it is best to add it in the form of an appendix.

There is a lot of start-up software available which guides you through making a business plan and microsoft have business plan templates and business plan examples on their site.

http://office.microsoft.com/en-us/results.aspx?qu=business+plan

If you are still uncertain then hire Business Plan Writters at Search Articles