What’s the Average Profit Margin for a Car Wash Business in The UK?

The average car wash income is around £102,000 which can increase depending on the location of the business

Car wash business is a very lucrative business in the UK and it’s a great way of making a living. With an estimated £1billion a year car wash business in the UK, this is a good venture for entrepreneurs. It is common to come across car washes as you travel around the country, and it is estimated that there are over 20,000 car washes operating in the UK.

For the next 5 years, the business is projected to grow, thus you should expect to see more car wash businesses coming up.

So, what’s all the fuss about the car wash business? Does it pay? How much profit should I expect if I open a car wash business in the UK? If you intend to open up a car wash business in the UK, then you’re at the right place.

After several days of research, I managed to come up with the average profit margin for a car wash business in the UK.

Continue reading to find out….

Factors that influence the profit margin of a car wash business

  • Operator expertise

The more experienced or excellent the operator is the more the business will reduce costs and deliver outstanding services. For instance, a professional operator will know where to apply a triple coat and in what quantities. So, you need to hire the right workers.

  • Location

Demographics play an important role in the profit that your business makes. This is because it impacts labour costs, electricity rates, sewer rates, and water.

  • Quality of the equipment

The equipment will affect your gross margins as some types of equipment have higher depreciation costs, while some can be less efficient than others. So, learn the costs involved with the equipment before buying it.

Want to start a car washing business? start here:  How to start a car washing business

Variable costs

  • Water – the cost of water is very essential to the business, unlike some costs where you might have alternatives for such as using electricity instead of natural gas or utilizing environmentally-friendly soaps instead of chemicals that are dangerous to the car’s exterior. Normally, it takes about 150L of water to wash a car by a self-cleaning car wash and 200L by an automatic car wash.
  • Detergents/chemicals – the detergents or chemicals used in cleaning a car plays a huge role in determining the overall cost. Some detergents are expensive while others are cheaper. Eco-friendly detergents are usually more costly than chemicals. If you want to offer your clients the best services, then you should opt for high-quality detergents that don’t corrode the exterior of the client’s vehicle.

An exterior car cleaning cost around £5-£8 and an “in” and “out” clean costs around £20+. The cost may go up or lower according to the types of detergents being utilized.

  • Electricity – operating a car wash business takes a lot of energy consumption in order to keep the premises working to maximum efficiency. The cost even rises when you own an automatic car wash as the blowers that dry the car uses a lot of electricity to do so.
  • Repairs/maintenance – this is another area that needs your attention when operating a car wash business. If you have built your car wash business from scratch, it will reach a time where you will have to repair or service equipment and renovate or repair the building. All of these costs should be factored in the cost of washing a car.

Fixes Costs

  • Administrative Expenses – as you run the business, several expenses will come up such as management staff, business insurance, office supplies, marketing & advertising fees, landscaping, and much more. If you’re paying rent, the cost should be included in the administrative expenses.
  • Site labour – this cost can be arrived by the number of people required to be on the worksite every day. Actually, you should have the same number of staff regardless of whether you received only 15 cars or 900 vehicles. The minimum wage bill for a car wash worker in the UK is at £8.21 per hour. Note that most car wash businesses charge between £5 and £10, and if it’s valeting, the price goes up to around £12. Most workers operate for 10 to 12 hours a day.
  • Rent/mortgage & Property Taxes – these charges depend on where you are located in the UK as they vary from one region to another.

The average car wash business profit margin

To come up with the average car wash business profit, you will have to add up all the costs minus the revenue. The average cost of cleaning a single car in the UK is £6. The total for all expenses (variable + fixed costs) is at £3.80, then take this number and multiply it by the average number of 17, 000 vehicles that get washed at any given car wash yearly and the total costs that you will undergo will be £64, 600. Let’s say that every vehicle that comes into your premises buy a basic car wash at £6 per car wash, then the total revenue made is £102, 000.

Finally, to get the average car wash business profit that you can make, take the total estimated revenue and subtract by the average total costs and you will get £37, 400.

Note that this is just an estimate and there is potential to increase your profit margin by adding more services such as offering a mobile hand car wash services, opening up a cafe where a customer can relax, while they wait for there car to be finished.

What’s the Average Turnover for Car Wash Business UK

To sum up, the average turnover or revenue a business can make depends on a wide range of factors. These include the location of the car wash business, types of chemicals or detergents utilized, cost of labour, and type of equipment used.

As per our findings, we found out that a car wash business can make an average revenue of £102, 000, which can increase depending on the location of the business and the services being offered.

All-in-all, a car wash business is a lucrative business and needs all the attention if you want it to grow to greater heights. Mobile hand car wash is becoming popular and it is a good venture for car wash business entrepreneurs.

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