Car Wash Economics and Modeling Tips

 Car wash modeling can be approached using a variety of methods, but here are some steps that could be taken to create a basic model:

Relevant Templates:

Every single situation is different, so when I go into a new startup car was development or acquisition job, the below things are a good place to start and if you have a base template, it should be robust enough to handle many of the common scenarios / car wash types.
  • Define the scope of the model: Determine the specific type of car wash you want to model (e.g., self-service, automatic, tunnels / bays, hand wash) and identify the key factors that affect its operation (e.g., number of bays, type of equipment, number of employees).
  • Define revenue streams: Pick how many pricing tiers you expect and be sure to understand the costs of each types. Also, I suggest having a membership option and building that option into the model as well as how the pricing changes between various subscriptions to a given washing tier. Having a membership option is one of the things I've added to the default car wash template linked at the top. This recurring revenue channel is more predictable and gets higher valuations.
  • Gather data: Collect information about the car wash operations, such as the average number of cars washed per hour, the types of services offered, the time it takes to perform each service, and the cost of labor and supplies. Also, pay attention to seasonality and plan that out. It is more important in the early years than the stabilized years as cash flow is a bit more of an issue in the launch years as you are growing and building new customers.
  • Create a flowchart: Visualize the car wash process using a flowchart or process map, which should include each step in the process (e.g., car enters the wash, customer selects services, car is washed, car exits the wash).
  • Identify bottlenecks: Identify areas in the process where delays or inefficiencies occur, such as long wait times for customers, equipment breakdowns, or staffing shortages.
  • Develop a simulation model: Use simulation software or other modeling tools to build a virtual model of the car wash operations. The model should include all the factors identified in steps 1-4, as well as any additional variables that may affect the process. Excel is a wonderful place to do this.
  • Run simulations: Use the simulation model to run multiple simulations, each with different inputs and scenarios (e.g., different staffing levels, different equipment configurations, different car counts). This will help to identify the most efficient and effective way to operate the car wash.
  • Analyze results: Analyze the simulation results to determine the impact of each variable on the car wash operation, and identify areas for improvement. Use this information to make data-driven decisions about how to optimize the car wash process.
  • Iterate and improve: Use the insights gained from the simulation model to refine the car wash process and continue to iterate and improve over time.

Overall, creating a car wash model requires careful planning, data collection, and analysis. By following these steps, you can develop an effective model that will help you optimize your car wash operations and improve customer satisfaction.