How To Start A Carwash Business in Kenya - PDF-2
How To Start A Carwash Business in Kenya - PDF-2
How To Start A Carwash Business in Kenya - PDF-2
We define the standard car wash as the stand alone car washes found in urban neighborhoods.
This is as opposed to automated car washes, car salons and car washes which are part of big bars.
However we touch on each of these.
Quick Static
According to Kenya National Bureau of Statistics (KNBS) Between January and June 2014 the
number of new vehicles registered was 89728. The lowest number was in April at 12,789 and the
highest in February at 17,779. The average is 14, 956 per month. See the table in the appendix
for breakdown by type of vehicle.
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Trends in the Car Wash Business
Since 2011 there has been a slow but steady growth in automatic car wash services. The major
advantage of the automatic car wash is speed. Within 15 minutes or so the body of the car is
washed and clean. The services have not gone gained mass traction yet, though they are
gradually becoming popular.
From the point of the entrepreneur automated car washes systems are capital intensive; at least
Kshs. 5M (though cheaper models are increasingly available). There are fears of losses in case of
breakdown if spare parts and support skills are not easily available.
Some entrepreneurs are also skeptical whether motorists would convert from the traditional car
washing habits to the instant automated car wash. Others cite the lack of many ideal spaces in
terms of location and rent to set up such car washes as the reason they are hesitant to invest in
the business.
On the other hand consumers reluctant to use automated car washes have talked of ‘awkward’
locations of the automated car washes. Some quote unsubstantiated information they have heard
that automatic car washes scratch the cars, damage the paint and can dent the bodies of weaker
cars because of high water pressure and faulty dirty brushes. They also don’t wash interiors.
Geco has managed to win customers by not just insisting on speed but also superior quality of
their service and making the car wash experience more of a hip social event. In addition to the
body wash which takes about 15 minutes, Geco does upholstery, buffing and even such cosmetic
car services as perfuming.
If speed is combined with unique quality service then an automated car business will attract
customers who are willing to pay a premium. There is market and potential for automated car
wash systems in an area with big enough numbers of the right kind of customers to sustain the
business. The right kind is not just about income or the cars they drive but a more open mind to
embrace such disruptions. (Automated car washes are the subject of another full research)
Nowadays there are car washes that try to differentiate in the market by making car wash
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moments social outings. Unlike the traditional setting where say a bar is set up and a car wash
included as an extra, in this case the car wash starts as the core business, and then extras such as
bar are added.
There are also family friendly settings which have a hotel, bouncing castles and other children
entertainment facilities. Some charge for the extras like bouncing castles, while others offer them
as a complimentary service to customers.
Car Salons
There is an emergence of premium car wash services which brand themselves not as mere car
washes but as car salons or car spas. The difference is in the quality of service where much more
attention to detail is given to the whole cleaning process. In car salons cars are groomed rather
than just washed. (For instance Carzspa along Ngong Road says of itself “Contrary to
perception Carzspa is not a car wash company. Carzspa is a professional car detailing center
dedicated to automobile beautification and preservation…). Of course there are the ‘kawaida’
car washes which use the words ‘Car Salon’ as a way of branding without using any superior car
cleaning equipment or procedures
Specialized shampoos and equipments are used in Car Salons; there are services like odor
removal, specialized rim and wheel cleaning, perfuming and such.
This involves washing the car while at the car park either at home or work. The selling point is
that this is supposed to save the motorist time he or she uses to drive to a car wash. And also
make car wash fit in his schedule.
Although the number of cleaners doing mobile car washes is increasing the kind of service is yet
to catch up in a big way. In office blocks there is the issue of access. In public spaces there are
the county authorities to think of. How to move with water and equipment, how to deal with
water overflow could also be a challenge.
To solve the latter problem there are now waterless car washing materials in the market.
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Although they are increasingly being used it’s not in a very disruptive manner. A relatively
successful version of this is a mobile business specializing in cleaning car interiors only which is
picking comparatively well compared to other mobile services. The mobile services are not a
threat to the standard car washes.
Motorcycle Cleaners
In some small town centers there are a number of ‘car’ washes specializing in motorcycles.
Bodaboda riders are quite price sensitive, and so many have been cleaning their own machines.
But with the attraction of specialized machine wash they are moving to car washes.
A number of entrepreneurs have theoretically toyed with the idea of starting a car wash fully
manned by ladies. The idea is based on the marketing premise that sex sells. The plan is to have
‘sexy’ ladies, in body suits, bikinis or such other provocative dressing washing the cars. Though
very often discussed no entrepreneur has fully implemented it.
In our ‘ hypocritical’ and ‘conservative ‘ society there is fear of a backlash, as much as such a car
wash would attract a high number of male motorists drawn more by curiosity and fantasies.
Some talk of the challenges of managing beautiful women working together and perhaps
If such a ‘sexy’ cleaners car wash is successful then other entrepreneurs will join the business
and competition will be based on how sexy, fresh or provocative your girls are. The ladies would
most likely demand higher pay, but then one can charge a premium in such a car wash. There is
potential in this kind of car wash but no entrepreneur has fully invested in managing the
underlying challenges and launching such a venture
The barriers to entry in the standard car wash business are low meaning that competition in the
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business will continue to rise. Demand in increasing driven by significant number of cars coming
into the market every month, this is attracting more entrepreneurs in the business further raising
competition.
Opportunities exist in the business. However the ability to profitably seize the opportunities will
depend on the ability to compete by location, service, differentiation and any other attribute that
will help the car wash stand out.
Despite the general positive outlook of the business there are car washes which are closing down.
(On average two car washes are advertised in the Daily newspapers every week and 9 on
internet forums) From a small sample of 31 previous car wash owners the major reasons for
closing were losses, low returns and more profitable alternatives. These were caused by:
Poor Management – This was especially so when the owner was not present and couldn’t
acquire the services of a trusted manager, and the employees stole from him
Poor Location – The location could be poor from the start. Or turn out poor because of
economic and social developments in the area. For instance buildings coming up, roads
being constructed or insecurity which drives motorist out of an estate.
Competition – Inability to compete when other car washes opened within the same radius
but in more strategic location or offering better quality and variety of services. At other
Increased Costs – Other than the costs of water, electricity and labor which more often
than not tend to be variable there were several cases where landlords increased the rent
arbitrary, supposedly to match the performance of the car wash and the demand for such
space within the area. Some of the increases didn’t actually match the performance of the
car wash leading to losses or low returns not worth the time and money in the business.
Change of User – This happened when the space where the car wash is operating is
converted to other use; could be a building, road or simply the space if it is a road reserve
is reclaimed by the county government.
For standalone car washes (as opposed to those which are part of a bar or eatery) the biggest
challenge is acquiring a good space in urban areas.
In Nairobi quite a significant number of car washes used to, and some still do, operate on road
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reserves. But efforts to reclaim the reserves have seen some of such shut down.
A number of real estate developers have been experimenting with car wash spaces on the ground
floor of commercial or residential buildings. Though this is yet to fully catch up it could point to
a future trend as availability of open spaces suitable for car washes in urban centers reduces.
o Location o Service
o Variety of services
o Associated
Facilities – Bar,
Bouncing Castle o
Opening Hours
All the above imply that the most important factors affecting the success of a car wash, the
Critical Success Factors, are:
I. Location – More often than not the motorist will chose the car wash more
conveniently located to his or her activities.
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Location is also staring where there is a high concentration of vehicles and where
competition is not intense.
More often than not rent in such an area will be above local averages, but considering
the ‘goodwill’ that exists then it could be worth it.
There are many bare bones car washes even without a name but which are very
successful by virtue of location.
There are areas with dominant car washes. Dominance is often as a result of service,
setting and associated services such as bar, eatery or car maintenance. When setting
up in an area with a dominant car wash know that it will take you longer to break
even.
Have a clever strategy to beat the dominance. For instance in most dominant car
washes the waiting time is relatively long, thus speed could your be edge. Without a
good strategy you may never get enough numbers to break even.
Management as we shall below will also affect the success of the business. Survival of the
business will depend on location, service and management.
Part of a bar or near a group of bars. Customer traffic tied to the popularity of the bar.
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Part of petrol stations – Professional image attracts motorists. Fueling and car wash at
the same time
At junctions / intersections – Point where motorists are likely to take a break / rest.
Along highways - Targeting travelling motorists
Residential areas – within a short distance from the motorist’s home. Can easily drive to
the car wash. Or have the car wash as he shops, shaves or does something else.
Standalone – Anywhere there is space
Basic Setting
Open field. No shade for cars. No shade for customers. Water tank. Car washing machine or no
machine and purely hand washed. Ground could have concrete, bare or grass. Simple billboard
or none at all.
Cemented or concrete on ground. Shade. At times shade for car and customer. Ramps – present
at times or none at all. Machine. Water tank. Sodas for customers. Payment could be organized-
a cashier and receipt or just casuals
All the above. Ramps. Shade for cars. Shade and seats for customers. If standalone could have
sodas /snacks for customers. Several machines or one major. Higher capacity water tank. Cashier
/ manager. Sodas or bites for customers. More advanced washing options – interior, engine,
under wash, waxing, buffing and more. Emphasis on setting and customer service.
The kind of setting will depend on the capital of the owner, competition and trends in the
area, target market, owner’s taste and customer’s demand. It advantageous to offer superior
service despite the competition, trends in the locality or even location advantages.
There is a demand and satisfaction in a superior car wash service, and again despite a present
market lead or simply a comfortable position there is always the possibility a competitor will
come and sweep your customers from under their wheels with better and wider variety of
services.
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Licenses
County license (Single user business permit) – This is the standard and most basic license. The
cost will depend on county & location within county. At least budget Kshs. 15,000 for this
license.
Water Regulatory Authority – Not very common but if you are using water directly from a
river they might visit you and genuinely or otherwise harass you about drainage and wastage.
Have ready answers and talk of concepts like recycling and fair use.
Upholstery
Under wash
Engine wash
Buffing
Waxing
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[email protected] Don’t invest blindly 0705 405 223 Page 10
Equipment
There are a wide variety of car wash machines available in the market. They are differentiated by
fuel (petrol or electricity), capacity, brand and whether new or second hand.
When choosing the machine first consider the projected number of cars you will be serving in a
day, and how busy your car wash will possibly be. This will help you pick a heavy duty machine
that won’t ‘burn out’ after a few hours or a few cars. Alternatively if you are unlikely to be busy
and your budget is low you can start with a simple low capacity machine.
Some of the machines in the market are designed for home use and not commercial purposes.
But dealers position them as fit for commercial use. If you are dealing with 0 to 20 cars, any
machine below Kshs.30, 000 will work. If more cars then you need a more powerful machine
which will cost more.
Secondly consider the fuel. Do you have access to power? Is power in your location reliable?
What happens when there is a black out? Though electricity machines are the preferred due to
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their high performance and rising fuel, they cost more.
If your budget is low you can start with a petrol machine then upgrade later. An electrical
machine is also tricky if you are sharing a meter with others. Disputes are most likely to arise
about your consumption. So make sure you have your own connection. There are many car
washes using illegally connected electricity. To do this you have to collaborate with the Kenya
Power personnel in the area.
Thirdly consider the efficiency of the machines. Different machines have various levels of
efficiencies. Go for the fairly priced and most efficient.
Fourthly consider the features and extras that come with the machine. These include weight,
outlets, spray gun, dust blasting, pressure options, anti twist systems and other such features
which improve the functionality of the machine.
We are hesitant to recommend any particular brand but the reality of the market is that Karcher
from Germany is one of the most preferred brands among the leading car washes. There are
different models of the machine. Locally the machine is distributed by Alibahi Sharrif and co.
(See contacts below). Other commonly used brands include Honda and Aico
When you are buying a car washing machine explain to the sellers what you wish to achieve, let
them give several options and then make a choice.
The price ranges between Kshs. 5000 to Kshs.30, 000 depending on brand, new or second hand,
and features. Remember you are purchasing a vacuum cleaner for a car and commercial purposes
so size and power matter.
Tank
The cost will depend on the size. Chose capacity by considering the reliability of water in the
area, and how many cars you are likely to be serving. The bigger the capacity the better. Costs
range from Kshs. 10,000 to Kshs. 50000 depending on the size.
Ramp – Optional – Kshs. 10,000 to Kshs.50000 depending on blacksmith, size, quality etc
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Shade for cars – Kshs.20, 000 to Kshs. 70,000 depending on the setting
Detergents
Most of the standard car washes don’t use any specialized shampoos; rather they will go for Omo
and other general detergents available in the market. However Nakumatt stocks a variety of car
washing shampoos and perfumes which are fairly priced and help your car wash stand out. A
starting budget of at least Kshs.4000 is good for detergents and shampoos.
Other Considerations
Source of water
Make sure you have a reliable and cost effective water supply. If in a place with water problems
think of simple ways of recycling water or harvesting during the rainy seasons.
Equipment Suppliers
Nairobi
In other areas check supermarkets and leading hardware and equipment suppliers. Www.
Olx.co.ke also has a sizeable number of people selling second hand car wash machines.
Capital
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The exact amount you need will depend on your setting & location.
A basic set up you only pay for a car washing machine, buckets, washing clothes, brushes,
detergents electricity, sign board , license and rent. Depending on the location this could cost an
average of Kshs.100, 000. There are basic car wash businesses which started with amounts
between Kshs. 80,000 to Kshs.200, 000
For a slightly advanced car wash you will need at least Kshs.300, 000. Standard Car washes in
urban areas have invested between Kshs.300, 000 to Kshs. 1,500,000. The amounts vary
depending on the setting, rent, goodwill, facilities and the variety of services being offered.
Set Up Process
Operations
‐ In other areas it’s on an open, winner takes it all, policy where the cleaner who convinces
the motorist most washes the car. This sometimes can lead to confusion or very
aggressive moments that some motorists are uncomfortable with.
In some cases motorists will insist they want their washed by particular cleaners because
they love their services.
Whatever the method it’s good to be clear to the cleaners what you prefer so that all flows
smoothly and motorists are not confused.
Also make sure your cleaners are honest and they won’t be tempted to steal anything from the
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customer’s car. There have been cases where cleaners steal small items from the interior could
be money, a tool like screw driver and jewelry. Insist on the need for honest and give that kind of
assurance to your customers. Let not everything be “at your own risk “
Prices (Kshs)
Washing a Saloon car - 200
Upholstery - 100
Engine cleaning – 200
Vacuum Cleaning of the interior 150
Buses/ lorries 500
Motorcycle – 70
Carpet cleaning – 100
Expenses (Kshs.) May 2014
3 cleaners @ Kshs.250 per day each – 22500
Profit
Kshs. 192,400 – Kshs. 75760 = Kshs. 116,640
Notes:
‐ The car wash has operated for almost 2 years ‐ When it
rains they harvest rain water.
‐ They wash an average of 20 saloon cars every day ‐
They have no rumps, don’t used specialized detergents
‐ Sometimes during weekends the owner motivates
employees by paying them a commission of Kshs. 30 per
car. This on top of their daily wage
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‐ Opens everyday at 7AM and closes at 9PM
Average Price of water (Per cubic meter consumed. A cubic meter is 1000 liters)
Ruiru – Kshs.111
Average amount of water used to wash a saloon car – 76 liters. The exact amount will
depend on the machine, the employees, the style of washing, the size of the car, the parts being
washed.
Average monthly Electricity consumption for a car wash serving 50 cars daily – Kshs.
15,000. Again the exact amount will depend on the efficiencies in the car wash, including choice
and power of machine, whether you alternate with petrol and the skill of the cleaners.
Average Break Even point – 7 months. Will depend on location, services and charges.
Prices are based on competition, location, facilities, setting, standard of service and the
general price trend within the region. Most motorists are comfortable able and willing to
pay a fair price for having their car washed in the best way possible. Thus if in a good location
lower prices will not have a very positive impact on revenue. Depending on your services and
setting there is room to charge a premium for higher standards, provided the premium is
reasonable. When settling on the price considers labor, cost of water, rent, competition, setting
and the leverage you have.
Major Costs
‐ Rent
‐ Water
‐ Electricity / Fuel
‐ Labor
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Other costs
‐ Detergents
‐ Security
‐ Repairs
Location – A good location will attract more customers and thus higher revenue
Service – Exceptional service will result to loyal customers, word of mouth and thus
increased revenue. With great service there is also room to charge a premium
Variety – There more services, beyond body wash, the higher likelihood the customer
will spend more.
Management – Good management prevents high revenue leakages. Poor management
leads to revenue leakages, unresponsive marketing efforts and strategies and thus lower
revenues. See more on management below.
Costs - Higher costs eat into profit. The way you manage costs without affecting service
will affect your revenue and profits
However a personal presence is not always possible and car wash owners use alternative
methods
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Management Alternatives
Monitoring is a big challenge especially without trusted employees. So seek to have a very
trusted manager, use receipts (not fool proof but it helps) or be innovative in your management
that you find some sort of middle ground where the employees have their take but you still make
a profit.
Reward methods:
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Kshs. 8000.
Commission is the most common method used since it manages costs, makes employees
motivated and work hard to attract and keep customers. On the other hand commissions
sometimes lead to below par cleaning as cleaners try to finish fast and wash the next car
on the queue.
Average Daily Take of Car Wash Cleaners in Nairobi Eastlands – Kshs. 400
Consumer Behavior
Consumers want:
o Convenience
o Excellent and thorough service
o Speed
Expansion
There is not much room for expansion in the business. With increased competition and
distribution of car washes, a standard car wash can only grow to some level. This does not mean
that a car wash business cannot be profitable, it can but it’s the kind of business with a somehow
revenue ceiling.
However this can change say with the introduction of something disruptive in the local market –
the region where you are operating. For instance, a Car Salon, an automatic car wash on a busy
high way. Or a kind of service than can’t be easily replicated by the competition.
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Level of risk
With all factors constant and with right location, service this is a low risk business. On a scale of
0 to 100 %. Where 100 is the highest risk we rate it at 40%. You can fail but with the right of the
critical factors your chances of success are high.