Perfect Car Wash: Establishing A Premium Car Wash Business

Executive summary

As long as, there are vehicles on the road, there will be prospects for various businesses for car washing. Depending on features, many prospective businesses can be started. The report will discuss about the car wash businesses. The business highly depends on location and weather; this business can prove to be very lucrative business for new entrepreneur. There are some potential factors which must be considered while deciding to launch car wash business (Grier, 2005). Although, a car wash business can be beneficial business and as per many studies, an individual can earn as much as $900,000 but this business requires a thorough study and a lot of hard work before starting and of course some major amount of investment (Jacobsen, 2012). This large amount of investment is also dependent on various types and size of car wash type which the entrepreneur may decides in order to build the required infrastructure for it (Grier, 2005). Building a business is this field; at least require six months to finish, so it’s a crucial decision since this business need a lot of money for the administrative and other expenses which may be needed for the administrative and other type of business expenses (Grier, 2005). During this time, it is also important to understand that the business will not making much revenue.

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Executive summary

Introduction

Body

Car wash industry business

Objective of the Perfect car wash business

Mission of Perfect car wash business

Target market

SWOT analysis

Porter’s five forces

Strategy formulation and implementation

Differentiation strategy

Financial strategy

Organisation structure for Perfect Car Wash

Conclusion

References

The report will discuss in detail about the business named Perfect Car Wash and their problems in starting the business and will also discuss in detail about the purpose or the main objective of the business (Grier, 2005). The report will discuss in detail about environmental analysis of the Perfect car wash on the basis of SWAT analysis and Porter’s five forces models. Moreover, it will also discuss the financial aspect of the business and how the capital will be allocated. The report will also discuss in detail about the organisational chart and how much employees will be required to establish the business.

Perfect car wash will start with two car services mainly related to exterior car wash, interior cleaning and also basic detail related to it. The business is making its USP by providing high quality services at high quality that too at reasonable price (Jacobsen, 2012). The actual ability of the business will be based on high quality service which covers two main and crucial aspects which are actual car washing and customer service which is also based on the capability to find best and dedicated team of employees (Grier, 2005). The main issue in hiring best employee that it will reduce HR costs which is associated with the turnover and also other employee costs.

• Objective of the Perfect car wash business

Body

The main objectives for Perfect car wash are discussed in detail as follows: –

• The first and foremost objective of the business is to build a solid and best team of employees. The first two month will be spent on getting the right employees and training them in order to strengthening the team. Happy employees are very important for the business especially in service company (Jacobsen, 2012).
• Customer satisfaction is another objective which is very crucial because only then employees will come and put money in Perfect Car Wash. Once the business will start, initial few months will spent in building the trust among the customers and make loyal towards the organisation (Noh et al, 2012).
• Another objective apart from this is to maintain a modest and steady business in order to earn high net profit margin.
• Expansion is also one of the significant business processes once this particular branch completes third year of operation (Jacobsen, 2012).

The main mission of the organisation is to provide the highest quality services and detailed service for the luxury and high end cars in the Sydney (Jacobsen, 2012). The organisation will work on making an ideal work culture for employees in order to maintain high customer service.

The environment for car business is very affluent; people these days maintain an expensive car and they constantly want it to look nice (Noh et al, 2012). The main target market of Perfect car wash is mentioned below: –

1. Individual car owners
2. The main leasers or dealership related to car and the many local businesses (Grier, 2005).
3. The Perfect car wash business has recognised different car dealerships, near the business which will constantly require car washing service (Grier, 2005).
4. In the end, there are many local companies in the locality which constantly require clean and neat appearances.

Following is the SWOT analysis of the car wash business: –

Strengths

• Hand wash car is much safer than the machine wash.
• This business does not require any prior training because of the simple nature of work (Jacobsen, 2012).
• The Perfect car wash business is also perfect people who require flexible time in working hour.
• The equipment which is required for the business can be easily required (Jacobsen, 2012).
• The structure for the business is very flexible and it does not require physical base (Jacobsen, 2012).

Weakness

• This business does not have any established and loyal customer base.
• It is difficult to maintain and support staff retention and the workforce is too casual by nature (Jacobsen, 2012).
• Car wash by nature is not a specialised service and many people like to do it themselves (Noh et al, 2012).

Opportunities

• The company has a huge target market which can be acquired by great customer service (Noh et al, 2012).
• This business can also be expanded easily and can be franchised.
• These businesses also have the potential to expand in diverse directions as well like wash boats, trucks or plant equipment and many more (Jacobsen, 2012).

Threats

• There are plenty of car businesses in the market which are mobile in nature and provide customised service (Jacobsen, 2012).
• This business is also majorly related to environment issue which scarcity of water and this business involves lots of water wastage (Noh et al, 2012). Australia car wash association has also worked on specifying a standard where the car wash organisations can initiate activities where they can recycle water.
• Since there is scarcity of water, the future of the business is at tenterhook and potential of the business will have to change as per that (Noh et al, 2012).
• It is a general nature of many people that they don’t believe in paying for luxury service. This is why attracting more and more customers can be a big challenge (Jacobsen, 2012).
• The business model can be easily replicated or replaced by the competitors.

Following is the discussion Porter’s five forces which affect the car wash business: –

• Threat of new entrants: – Sydney has many car wash organisations like Sparkling Car Care or Wax Car wash or Eco spray Car wash who are doing very well. The car wash business always faces the challenge or threat of new entrants. Since the nature of the business is very simple in nature, there is always a threat of new entrants (Noh et al, 2012).
• Threat of substitute product and services: – people will buy car and they want to get it washed again and again. This service can also be substitute with new equipment which can help in washing the car fast and easier manner (Noh et al, 2012).
• Bargaining power of customers: – the customers do hold a bargaining power where they have the power to dominate the prices. The nature of the work is simple and also it can be easily replaced so it is important to give ultimate importance to the customer who will only come back when they will get good service in addition to reasonable price (Noh et al, 2012).
• Bargaining power of suppliers: – the bargaining power of suppliers is also termed as the market of inputs. Supplier of all nature whether raw material, labour, and services for this business can be prove to be a major source for accomplishing the objective (Godlevskaja et al, 2011). Since in this business, there are large number of supplier in terms of raw material, service and labour, the power is in the handoff business (Godlevskaja et al, 2011).
• Intensity of competitive rivalry: – the Perfect car wash faces a lot of competition from various competitors. In order to fight this competition, they will have to come up with new and advanced services in order to gain edge over competitors (Godlevskaja et al, 2011).

The basic strength of Perfect car wash is majorly dependent on the experience of the owner and it is the significant asset for the company. The owner has been involved in car repair business from many years (Godlevskaja et al, 2011). The company is involved in positioning themselves as a premium car wash service. The forecasted market share in the starting is 20% of share. The business will help in generating a very high gross margin and will focus on increasing this margin over the years. The company plan to grow the business and in next three year planned to develop a respectable net profit (Godlevskaja et al, 2011).

The differentiation strategy will on the basis to achieve premium customers in the locality and make them loyal by providing those, best and high quality service which will make them to visit the shop again and again (Ferrario & Guarino, 2012).

The owner has personal capital of $50,000 and since this business will require more investment of money $2, 00,000 will be taken as a loan from the HSBC bank in Sydney.

 

Conclusion

The report has discussed in detail all the aspects of establishing a car wash business with the name of Perfect Car wash (Ferrario & Guarino, 2012).. The organisation aims to establish a business which provides high quality service to the customer for luxury car department (Ferrario & Guarino, 2012).. The report has discussed in detail about the services, its objective and its mission for the business. The report has discussed in detail about SWOT analysis for the organisation and Porter’s five forces model. The report also discusses the strategy implementation and a strategy on the basis of which the organisation will differentiate from the competitors.

References

Grier, R. 2005. U.S. Patent Application 11/100,274.

Jacobsen, T. L. 2012. Car Wash Blues: A Mick Murphy Key West Mystery.

Noh, S. M., Lee, J. W., Nam, J. H., Park, J. M., & Jung, H. W. 2012. Analysis of scratch characteristics of automotive clearcoats containing silane modified blocked isocyanates via carwash and nano-scratch tests. Progress in Organic Coatings, 74(1), 192-203.

Godlevskaja, O., Iwaarden, J. V., & Wiele, T. V. D. 2011. Moving from product-based to service-based business strategies: Services categorisation schemes for the automotive industry. International Journal of Quality & Reliability Management, 28(1), 62-94.

Ferrario, R., & Guarino, N. 2012. Commitment-based modeling of service systems. In Exploring Services Science (pp. 170-185). Springer Berlin Heidelberg.