If you’re thinking about how to start a car detailing business, there are a few key questions you need to answer about your business and things to do before you get started. This guide will walk you through these step-by-step as you launch your business.
What is Car Detailing?
Car detailing is the interior and exterior cleaning, restoring, and finishing of a vehicle to like-new condition. Exterior detailing is cleaning and restoring the car’s finish, trim, windows, wheels, and tires. Interior detailing is a deep cleaning of the vehicle’s interior cabin including vacuuming, upholstery stain removal, and polishing. Sometimes a detail will include light cosmetic touch-ups, but the process normally does not include paintwork or body repair.
In the United States, the car wash and auto detailing industry, which is served by 66,708 businesses, produced $12 billion in revenue, and employed 224,874 people in 2019. The annual growth rate over the last five years is 4% (IBISWorld).
Total revenue in 2019
Number of Businesses
Annual Growth 2014-2019
Do Market Research on Car Detailing in Your Area
It’s important to know the landscape of the market before you start a business. You want to be confident that when you start your auto detailing business, you will have enough customers in your area who want to purchase your services. This will ensure that you can make money and stay in business. In your research, gather as much information as you can to understand the supply and demand of the market, your competition, and your potential customers. Here are some questions you can ask:
- Is there a need for car detailing in your area?
- Who needs it, and who are your potential customers?
- Are there other auto detailing businesses offering similar products and services now?
- What is your future potential competition like?
- How will your business fit into the market?
To help you get started, here’s some information we put together on the number of detailing businesses across the US, per state, and top and bottom cities around the country.
Create a Business Plan
A business plan will help you answer all of the questions you should answer before you start your business. It also helps you focus on core areas and write down all of your ideas.
There are different types of business plans you can create, but a business plan normally includes the following:
- A mission statement to describe the main focus of your business
- Information including your registered name, address of any physical locations, and names of key people involved in the business
- An objective statement that explains your company’s goals
- A business strategy that goes into detail of what your goals are and how you plan to achieve them
- Your business and management structure that outlines key employees, managers or other owners of the business (including the percent ownership and the extent of each owner’s involvement in the company)
- How you will package your detailing services and how you will set pricing
- Outline the potential customers you will target, their pain points, and how your business can help solve them
- Define your unique value and what differentiates you from your competitors
- Create a marketing and sales plan, including messaging on why your services are worth buying and what channels will you use to promote your business
- Financial plans including your revenue goals, start up investment required, and growth opportunities and plans
For a more in-depth step-by-step guide of writing a business plan for your detailing business and to download a template, read our article about business plans and find a template here.
Do a SWOT Analysis for your Detailing Business
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a way for you to understand your own strengths and weaknesses within your company alongside external opportunities and risks. This will help you reduce chances of failure and increase your chances of success, compete successfully in your market, and beat your competition. If you have any questions about how to start a car detailing business, a SWOT analysis will help you find answers:
What does your company do well?
How do you stand apart from your competitors?
What internal resources do you have? This could be your staff, the technology you use, etc
Where does your business struggle?
What do your competitors do better than you?
Where are you limited in resources?
Do you have little competition in your area?
Have you gotten positive public reviews or media coverage?
Is there a new need for your services?
Do you have new competitors in your area popping up?
Have you gotten negative public reviews or media coverage?
Will regulations change in your industry?
Decide on Your Business Type and Location
Choosing the location and type of business is important for your business operations. As an auto detailer, you have a few common options for your business location. These are fixed site, mobile, and temporary location businesses. You will need to think about what business type and location makes sense based on your research, for the customers you will serve, and what costs you can afford.
Fund Your Detailing Business
Depending on what type of business you decide on, it could range anywhere from $5,000 to over $100,000 to start a car detailing business. You will need to decide if you can self-fund it or if you need to take out a loan. The U.S. Small Business Association has a helpful guide on funding a small business here.
Apply for Licenses and Permits
To start a car detailing business, you will probably need to apply to a combination of licenses and permits at the federal and state level. The requirements and cost can vary from state to state, and even from city to city.
Here are some general tips for you to consider:
- Establish your business as an LLC to limit your personal liability for business debt. The process is different from state to state, but normally you just need to fill out paperwork with your state. You can choose to not formally establish your company, but it will come at a higher risk. As an LLC business owner, your home, personal bank account and other personal assets are protected if your business doesn’t end up making it. If you do not register as an LLC, you won’t have these protections.
- Car detailing businesses generally operate from a physical location, which means you’ll need a Certificate of Occupancy. This confirms that your business meets building codes, zoning laws and government regulations in your area.
- Get Tax IDs for federal and state taxes. To do this, you will need to apply for an EIN. It’s free and easy, but if you need help, this checklist from the IRS website is a good resource.
Meet other Legal Requirements – Environmental Regulations and Insurance
Legal regulations also vary from state to state, and sometimes even from city to city as well. Call your local city hall and find out about insurance requirements and how to make sure you’re complying with environmental regulations.
Some additional tips to consider:
- Check on any specific environmental regulations you should know. As a car detailing company, you might run up against specific water usage and/or wastewater rules that you need to comply with.
- For insurance, you might want to consider “Garage Keeper’s Liability” insurance which covers you for working on vehicles as they are in your possession. You should also consider insuring your equipment against theft. If you have employees, you should get workers compensation insurance to protect your business and your employees if something happens to them while working. (In some cases for small businesses, your state might provide you workman’s compensation insurance.)
Hire Your Team
When you first start out on your business, you might not need to hire employees right away. There are many successful auto detailers out there who run a 1 or 2 person business, however that doesn’t mean you don’t need support. Think about a few people you can go to for advice, motivation, or ideas when you need them. This could be a mentor, a business coach, or even your family.
If you will be hiring employees or contractors, it’s good to start thinking about who you need and starting the process early. First, you’ll need to decide if you need employees or contractors and what makes most sense for your business. While you have more control and oversight over an employee, contractors give you more financial flexibility and lower risk. If you decide you want to hire employees, you can reference this employee hiring guide by The Small Business Administration for help. If you decide to outsource your work to contractors, you should put together an independent contractor agreement first and then start your search.
For more information on salary averages and hiring trends within the auto detailing industry, you can review our research to get a sense of what it will cost you to hire an employee in your area.
Open a Business Bank Account and Credit Card
Using dedicated banking and credit accounts through the business is a really good idea if you want to protect yourself and your personal assets.
If you use your personal account to make business transactions, your personal assets (like your home or your car) are at risk if something negative happens to your business.
Invest in Auto Detailing Tools and Business Software
As a detailing business, your basic costs outside of your physical shop and your employees will mostly come down to your tools and equipment. Here’s a list of tools and business software to get you started:
Exterior detailing products
- Acid free degreasers
- Detail clay
- Drying towels
Interior detailing products
- Cleaning products meant for a variety of interior materials (synthetic carpet upholstery, vinyl, leather, natural fibers, carbon fiber composites, plastics)
- Steam cleaner
- Liquid and foam chemicals
- Accounting software like Quickbooks
- Estimating and invoicing software like Mobile Tech RX
Promote Your Car Detailing Business
Once your business is up and running, the last step is to start attracting customers. Your marketing efforts at the beginning will be trial and error. You can try a few different tactics and channels and find what works best for you. Here are 3 marketing ideas for detailing business to get you started.
Start your Detailing Business
Once you’ve completed everything on this list, congrats! You now know how to start a car detailing business and have most all of the important to-do items done. Now you can focus on growing the business from here.