Car Wash Self-service Business Plan

Our business is an “all cash” business that will pay for all variable and fixed expenses monthly. Thus, we will rapidly build cash flow to finance future growth. During the first nine months (six months of operation), two key issues will assist Auto Paradise in rapidly building capital:

1. Nine months (three months construction, six months of operation) of deferred long-term loan repayment ($7,081 savings/month)
2. CEO/manager will not receive a salary for at least six months ($3,000 savings/month).

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. From the beginning, we recognize that variable expenses are critical. Cost of water, sewer and electricity are our largest expenses. Water is our major concern in West Texas. We are planning for this possibility by installing all of the required storage, electrical and plumbing for a total water reclamation system.

Two of the more important underlying assumptions are:

1. We assume our long term financing includes nine months of interim interest for repayment.
2. We assume a sound economy, without major recession despite our modest pricing.
3. We assume, of course, that there are no unforeseen changes in local regulations that will interrupt our service.

7.2 Break-even Analysis

The break-even analysis table below the following revenue sources: 

1.  Laser Car Wash Sales

2.  Vacuum/vending sales

3.  ATM revenue

4.  Reverse Osmosis water revenue.

7.3 Projected Profit and Loss

Projected Revenue. See “Sales Forecast” for a detailed breakdown of projected revenue.

Projected Operating Expenses.

1. Direct Cost of Automatic Sales.
• Chemicals. Average 8.6% of gross revenue. Chemicals include soap, wax and salt.
• Utilities. Average 13.9% of gross revenue. Utilities include water, electricity, gas and sewer.
2. Direct Cost of Self-Serve Sales. Total cost averages 11.1% of self-serve revenue.
3. Direct Cost of Vacuum/Vending Sales. Average 1% of aggregate automatic and self-serve revenue.
4. Variable/Fixed Expenses
• Labor. Labor is estimated to be $2,000/month with an additional 15% burden to cover related payroll taxes and workman’s compensation insurance. Based on two part time employees, 70 total hours/week @ $6.50/hr.
• Repair and Maintenance includes $750/month for monthly service provided by WET and $100/month to clean each wash bay pit.
• Real Estate Taxes are estimated at 3% of value of land and construction costs ($500,000).
• General Liability Insurance is estimated at $1800/year.

Depreciation. Depreciation was calculated as follows:

• Equipment. $295,000 ¸ 6 years ¸ 12 months = $4,097/month
• Construction:  $390,000 ¸ 15 years ¸ 12 months = $2,167/month

7.4 Projected Cash Flow

The following table outlines are estimated cash flow.

7.5 Projected Balance Sheet

The following table indicates our estimated balance sheet totals.

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7542, Car washes, are shown for comparison.