Mobile Car Wash Feasibility Study

The feasibility study is actually a bit of a chicken and the egg scenario.  On the one hand, you will need to do enough research to prove the profitability of your business idea.  On the other hand, you don’t want to spend any more time and effort than you need to in order to prove a positive return on your investment.  Your goal in the feasibility study is to gather just enough evidence so that you can justify starting the business.

For your mobile car wash and detailing business, you will need to answer the following questions:

What are your short-term business goals?  Keep these to the key two or three objectives you expect to achieve that will prove to you that your business is feasible.  Make sure to quantify (remember S.M.A.R.T.)!  For your mobile car wash business, typical goals might be:

• Within six months, pay myself a salary that is consistent with what I was making at my regular job
• Cover the cost of my initial investment in equipment and supplies within nine months
• Achieve a 25% repeat customer rate within six months
• Expand operations into two neighboring towns within twelve months

Since you’re likely just getting started, your immediate goals will probably be centered around paying yourself a comfortable salary and paying down your business debt.  Goals are highly individual and we encourage you to come up with your own.  We do stress, however, that you come up with clearly measurable objectives.

What are the critical success factors in your business?  In other words, what do you need in order for your business to achieve its goals?  You may want to consider the following critical success factors:

• My business needs to operate in a location with at least 25,000 car owners
• Customers must be willing to pay at least $30 for a mobile car wash and $100 for a mobile detail
• My startup costs need to be below $15,000
• For the first 12 months, I need to be able to operate the business by myself

Your critical success factors are essentially the basic building blocks that need to be in place in order for you to achieve the goals you set out for your business.

Now that you have a list of your critical success factors, you need to do some research to see if your business can support these factors.  Here is where the process starts to look and feel more like art than science.  You will want to do enough due diligence to prove your business model is feasible but at the same time you want to avoid “analysis paralysis”. This is where you simply analyze the problem to death and never get started.

A good rule of thumb to follow is this…do your research and present the facts back to a friend or relative.  Your job is to prove to them that your research backs up your business idea.  Ask them to be really skeptical of your business and the research you have done.  If you can prove to them and yourself that your research justifies the business, by all means, move forward!

The final part of your feasibility study is the break even analysis.  At this point the break-even analysis doesn’t have to be really detailed, it should just give you enough information to know, essentially, how many car wash and detailing jobs you need to do at a certain rate in order to cover your fixed and variable expenses.

As a quick example, let's assume your business provides two wash and detailing packages. The first package is an exterior and interior wash and detail. This package is priced at $100. The second package is an exterior wash, detail and wax. This package is priced at $150. For this example, let's assume you plan on selling equal numbers of each package. Therefore, your average package price is $125 ( [$100 + $150] / 2 ). Also assume that your monthly fixed expenses (your salary, paying off loans, rentals, insurance, etc) are $7,500.

Based on the assumptions above, your break even analysis will look something like this...

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