As we all Malaysian’s know, one thing that everyone have in Malaysia is a CAR. Everyday we transport in car and also stuck in jam also in a car. Therefore, a car has already been a part of our life.
As I was wondering what business can I do in Malaysia that is within the area of car. There were a few options, second hand car business, car modifying business, car accessories business, car rental business but all this were too high of a startup cost for me. Then an idea popped out, why not start a Car Wash Business. There’s where all the idea keeps on coming to me.
In this article, I will be sharing with you my observations on opening a shop lot based car wash business in Malaysia:
- Information and Data of Car Wash Business
- Pros and Cons of Car Wash Business
- What are the demand and growth potential
- Startup Cost of a Car Wash Business
- Potential Revenue of a Car Wash Business
- Potential Location of a Car Wash Business(in KL and Selangor)
- Monthly Cost of a Car Wash Business
- Risk of a Car Wash Business
Now let us begin with the summary of my observations & findings:
This is based on a small scarle car wash business
| Contents | Observation |
| Demand | Medium to High |
| Competition | Medium to High |
| Startup Costs | RM 14,900 |
| Potential Revenue | RM 11,400 (average) |
| Potential Profit | RM 3,400 |
| Return On Investment (ROI) | Up to 5 Months (average) |
Information and Data of Car Wash Business
Based on 2023 records, JPJ estimated that there were 21,709,492 active vehicles in Malaysia. Based on the population estimates for 2022, there are 9.19 million children under the age of 18, with 4.75 million of them boys and 4.44 million girls, according to the Children Statistics, Malaysia, 2022, issued by the Statistics Malaysia Department on Monday (Nov 28). The current population of Malaysia in 2023 is 34,308,525, a 1.09% increase from 2022. Which means almost all Malaysians that are not consider children own their own vehicles or at least have a single vehicle.
This makes car wash business a business that is very high in demand. The only thing to consider now is the competition in the market. Even if the market competition is very low, the competition of a certain area is to be considered too.
Pros and Cons of Car Wash Business
Every business, no matter if it is good, earns a lot of money or if it is bad and it loses money has pros and cons too. In order for a business to be successful is not about how well the business is in theory but how you manage your business, scale the pros properly and reduce the cons for your business.
Firstly, the pros of a car wash business. We can scale a car wash business to a very large business depending on how we market the business. To keep in mind, this is a service business and in order for a service business to be good, we need very good services.
Good services can be determined by:
- Tangibles: appearance of physical facilities, equipment, personnel, and communication materials.
- Reliability: ability to perform the promised service dependably and accurately.
- Responsiveness: willingness to help customers and provide prompt service.
- Assurance: knowledge and courtesy of employees and their ability to convey trust and confidence.
- Empathy: the caring, individualized attention the firm provides its customers.
Moving on the cons of a car wash business. As we know a car wash business is already a business that is almost mature with almost a single car wash in every shop lot area. Some areas have more than 1 car wash business. The start up costs is low but it might be very costly to many. We do not recommend going all in to business even if the start up costs is low. In terms, if you have RM50,000 we do not recommend opening a business that uses almost 90% of your money. A good business to open should use around 50% of your money, and you should have enough money for a healthy cash flow.
Another con would be hiring workers for this business. As this business is a service business, the revenue and profit of this business would be determined by your employees too, how hardworking is he or how great his service is. With that said, please screen out your employees properly and provide proper and professional training for the best outcome.
What are the demand and growth potential
Theoretically, every business has a potential to grow at an exponential speed depending on how well the management and business are.
As stated above the demand for car wash is very high in Malaysia. We can conclude that because of the extremely high ratio of cars to population(who can drive – above 17) in Malaysia. We estimated that a car will need a wash weekly.
TIPS: We can try to upsell other products such as car wash soaps or accessories.
We can focus on these two car wash businesses that we particularly believe have grown impressively. 7 Auto Spa and Ceramic Pro are one of the many businesses that we believe are very strong and well known in this industry. One great thing they did to expand is also they use the following tip above.
Startup Cost of a Car Wash Business
| Item | Estimated Costs | Notes |
| Rental | RM 7,500 | Assuming 3 months deposit @RM2500/month |
| Equipments | RM 2,300 | Products can be gotten from shopee |
| Renovation | RM 5,000 | Simple renovation including cement ramp |
| Marketing | RM 100 | Marketing such as instagram and ads |
| Total | RM 14,900 | This is just a prediction for a small car wash |
This startup cost is considered affordable and low for a physical business. Being a small car wash business we aim to have 1 washing bay and 1 drying bay which also serves as the purpose of car collection. As a small shop we do not have enough space to park too many cars. We will aim to have 1 lot for maximum efficiency.
With that said lets being calculating the costs one by one to give you guys a more explained version of the costs.
Rental:
Estimate that our car wash is at a location where the population is high and the rental is cheap.
At a place like Puchong where the jam is very famous means there must be alot of cars. The average price for a single shoplot to rent is at around RM2,000 to RM3,000. As we are a small business we are not seeking for a location that may cost RM5,000 and above. Instead we will leave such a high price for potential growth for our business.
Required Equipments :
The most essential thing for a car wash business is the equipment, not just to have a successful car wash but a car wash that can actually operate. We need to have functioning and reliable equipment. For this business we are going to focus on affordable, reliable and efficient equipments.
| Item | Estimated Costs | Notes |
| Vacuum | RM 200 | Industrial Grade Vacuum |
| Air Compressor | RM 300 | We recommend brands like europower that is available in shopee |
| Pressure Washer | RM 300 | At this budget the pressure washers should be good enough |
| Water Tank | RM 300 | We recommend getting at least 200 Gallons |
| Sponges and cloths | RM 100 | Getting microfiber cloths is important and getting suitable sponges. |
| Carpet Cleaner | RM 500 | The carpet cleaner is very important, some carpet cleaners are not strong enough to even clean. |
| Total | RM 1,700 | This is the estimated total |
| Total* | RM 2,600 | We recommend getting a backup for all the equipment except Water tank and carpet cleaner. |
Our estimated costs sum up to RM 2,600 because we are afraid of any of our equipment spoiling during business or malfunctions. This is to assure our business still can run even after the machine malfunctions.
Equipments run down [COMING SOON]
Renovation :
We aim to use only RM 5,000 for our renovation to keep our startup costs low and affordable. Our renovation will include cement ramp, flooring, lights and minor renovation to make it look premium and luxury but still keeping it cheap. We need to have a waiting room for clients to make them feel comfortable while waiting.
Car wash like the image above to slightly cheaper as their flooring is simple and renovation is simple. However we aim to have a more luxury style.
Marketing:
We aim to have a simple marketing strategy scaling using instagram, facebook, google business and tiktok of course. Other than that we will use RM100 for ads campaigns to boost our business to allow more people to find us.
Potential Revenue of a Car Wash Business
Our revenue scheme is very simple, we solely earn money from car wash. As to scale we will increase our revenue by selling products and additional services such as waxing, ceramic coating, polishing and so on.
| Item | Potential Revenue | Notes |
| Car Wash | RM 2,400 | RM 15/wash, 10 wash weekday, 30 wash weekend [ ONLY FOR 1 BAY WASH ] |
| Products | RM 3,000 | Car wash kits, soaps and equipments |
| Additional services | RM 6,000 | Waxing, ceramic coating, polishing and so on [ At standard market price and demand ] |
| Memberships | ~ | This is only an idea and to use this we have to further plan and calculate |
| Total | RM 11,400 | This is just a prediction for a small car wash |
Potential Location of a Car Wash Business(in KL and Selangor)
We have only did our research on KL and Selangor, as this 2 locations has the most active cars and also busy areas.
For KL : [COMING SOON]
For Selangor : [COMING SOON]
Monthly Cost of a Car Wash Business
| Item | Estimated Costs | Notes |
| Rental | RM 2,500 | At an average place at most location available |
| Staff | RM 4,500 | RM 1,500 for 3 staffs |
| Car Wash Liquids | RM 300 | Monthly bulk buy of liquids to clean, wax, polish and coat the car |
| Water & Electricity | RM 700 | At a commercial place the cost will be slightly higher |
| Total | RM 8,000 | This is just a prediction for a small car wash |
Risk of a Car Wash Business
| Risks | Potential Solution |
| Machine Malfunctioning | Spare machines and equipments |
| Water supply not working | Have a water tank |
| No electricity (unlikely) | Will need to get generator |
| Workers running away | Must treat workers well and make them feel comfortable |
| Workers stealing money | Use only digital payments |
| Robbery | Have CCTV and do not keep cash |
| Damaging customers cars | Have proper training and need CCTV to keep recording the process |
| High Demand at a period of time | Have an external car bay to wash |
Should you just buy a business instead?
The short answer is no. Being a small car wash is that the startup costs are fairly low and affordable and to buy a business itself it might cost more than it takes to startup. If you are aiming for a medium or large car wash business then buying a mature business will be recommended.
The pros of buying a car wash business is that you would have a mature business with regular customers.
The cons of buying a car wash business is that you will need a higher startup capital. We should always consider why the owner is selling the business. Is it because of no business, or reducing customers or other reasons.
With that said the decisions is yours whether to take this initiative to open a car wash business.
Key Takeaways:
A car wash business is simple, easy to manage. For a side income and extra business it is indeed a good way to invest and get extra money.
The effort to open this business is considered low. BUT every business has its own risk of losing all its money please do consider that too.
MUST READ :
All the ideas, calculations and predictions are just a mere understanding and calculations based on theories and case studies please do note that following exactly does not guarantee success but rather its just a helping hand and a guideline to success.
Our aim is always to have a faster return on investment and a high monthly income!
