Do you want to start a truck wash business and you want to know the cost breakdown? If YES, here are 5 factors that affect the cost of building a truck wash.
Starting a truck washing business can indeed get you on the path to a secure financial future as long as you separate yourself from the competition. Trucks are a critical part of the business distribution network. From delivering consumer goods to transporting gasoline, trucks rack up miles through a variety of weather and road conditions. Inevitably, these hard – working vehicles are prone to dirt and grime build-up.
Also, as fuel costs skyrocket, over-the-road trucking companies are pinching pennies wherever they can. In an industry that consumes more than 39 billion gallons of diesel fuel per year, the need to achieve maximum fuel efficiency has created a growing market for truck washing and cleaning businesses in the United States.
However, one of the common approaches for starting a truck washing business is to create a DIY truck wash facility. For around $50 per truck, truckers have access to a wash facility designed to accommodate tractor – trailers.
Estimated Cost of Building a Truck Wash Facility
Setting up a new truck wash business, just like any other business in the United States comes with a price. Aside a detailed business plan, your location will be the next most important decision to make. You can choose a suitable place in the industrial section of your town, or near a place where trucks are frequently located.
The best locations are often near an interstate, truck stop or truck mechanic. When choosing your location, always ensure you have sufficient space for trucks to easily maneuver and to form a line during busy times. Take your time to pick a spot for the wash and clearly outline the path to and from this location on the pavement.
Note that the easiest method is to have a truck enter from one side of your land, stop for washing and then exit from an alternate side. The goal is to prevent backups or accidents by keeping trucks moving forward. You should also consider adding a large metal structure or building so you can wash trucks in all weather conditions.
For additional servicing options, install pit or ramps that give you easy access to the bottom of the truck for undercarriage cleaning access. However, below is a list of the most essential aspects of a truck wash business and why they need your funds the most.
1. Market Research
A good market research plan indicates where and who your customers are. It will also tell you when they are most likely and willing to purchase your goods or use your services. There are many ways to conduct your market research. Although you can choose to do it yourself, but of course, a good market researcher can do it better. These professionals can charge anywhere from $1000 to $2000.
Although it might seem a little steep, but considering the accuracy and expertise they can bring to your business, that cost is more than justified.
Remember that without accurate and targeted market research, you will not have an understanding of who your customers are, what they want and what they need. Consequently, you will not be able to tailor – fit your truck wash business to your market.
2. License and Permit
According to reports, a rough estimate on the total cost of license and permit fees is $150 to $200. Note that the licenses and permits required for a truck wash business will vary from state to state. Some of the fees you may have to pay are annual business license tax, business improvement tax, new license application fee and state fee.
In addition, depending on your truck wash business, there may be a need for water drainage, environmental and safety permits. Your estimated gross receipt is part of the fees you will have to pay. Thus, it’s also important that your truck wash business has realistic financial assumptions.
3. Facility
Also note that the location and facilities in your truck wash will need a huge chunk of your startup cost. Immediately you have chosen a suitable location for your business based on your market research, you have to decide whether you are going to build it, buy it or lease it. Same goes for your equipment.
You can buy them or lease them. A conservative estimate of how much it will cost you is $200,000 to $400,000. However, this is based on the size and location of the facility. It is good to invest on a quality facility to be able to provide quality service to your customers.
4. Insurance
In the United States, acquiring general liability insurance is a must for all types of businesses to cover risks that include bodily injury or property damage caused by direct or indirect actions of the insured. For a truck wash business, professional liability insurance should also be considered.
Note that this type of insurance, also known as errors and omissions insurance protects your business against errors and negligence in provision of services to your customers.
According to reports, General Liability Insurance could be as low as $500 to as high as $15,000 a year, while professional liability insurance can vary from $500 to $2,500 a year. Another type of insurance you may have to consider is commercial property insurance to cover your truck wash business facility.
Note that this type of insurance protects you from loss and damage of company property, including your building, equipment, papers and money, due to events such as fire, flood and vandalism. In this business, it pays to be extensively protected covered.
5. Advertising and Promotion
In the United States, there are a myriad of choices of advertising to choose from. Depending on your start-up capital, you may choose to advertise on TV, magazines, newspaper, radio, billboards, etc. Don’t forget to utilize social media. The choices, really, are endless!
Remember that very creative advertising and promotion can lure customers away from your competitors. This translates to additional customers for you! This is why you have to include promotions and other marketing strategies in your startup costs.
The more innovative you are the better! Go explore the magic of car wash coupons. Maximize your social media accounts to spread your promotions faster. Once you have given them a taste of your service, customers will keep coming back. The price for this item varies but $2000 to $5000 is a pretty good estimate.
Conclusion
Properly outlined above are the essential costs that you have to plan for when starting your very own truck wash business. But these are just estimates. Do not forget to perform your due diligence as most of these estimates can vary in terms of location and size.
One way you can avoid failure is having an alternative plan for mishaps. Always ensure you have extra cash at hand on top of the startup cost budget.