| Before embarking on writing a business | | | | justifiable data. Just grabbing a number |
| plan for starting a car wash, a | | | | out of the air saying you will make |
| definition of what a business plan is in | | | | $300,000 won’t work. There are |
| order. A business plan is a document to | | | | many sources to help come up with this |
| identify an opportunity, research why | | | | number including: |
| this opportunity is profitable and the | | | | Industry journals |
| steps needed to capitalize on the | | | | Trade groups |
| opportunity. The business plan can be a | | | | Car washes in similar demographic areas |
| formal document or it can be written on | | | | Industry experts |
| the back of a napkin but the mere act of | | | | Census data |
| writing the idea down forces you to get | | | | Pricing |
| the idea out of your head and on paper | | | | The effects of pricing play a large role |
| which helps find hidden business flaws | | | | on how your product is perceived in the |
| and makes you think carefully about each | | | | marketplace. Price too low compared to |
| phase of your business. | | | | the competition and your product could |
| Creating a business plan is something | | | | be perceived as cheap and unreliable. |
| anyone can do, even if you don’t | | | | Price too high with the features and |
| know anything about business or | | | | benefits of your product and few |
| finances. Even though the business plan | | | | customers come through the door. While |
| is critical to getting the idea off of | | | | this is a complex issue, here are a few |
| the ground, many entrepreneurs | | | | things to keep in mind. |
| procrastinate when it comes to preparing | | | | Make sure you can make a profit at |
| a written plan. If you don’t know | | | | whatever price you are selling at. |
| anything about business or finances, | | | | If you want to have lower costs and |
| this is the best time to begin learning | | | | “get your foot in the door” |
| as the chances of your business being | | | | it may be better to offer discounts or |
| successful will be limited without this | | | | coupons initially until your business is |
| knowledge. Just as a builder won't begin | | | | better known. |
| construction without a blueprint, | | | | Don’t be afraid to charge more for |
| entrepreneurs shouldn't rush into new | | | | your product or service than the |
| ventures without a plan. The old saying | | | | competition if you have something of |
| that “those who fail to plan, plan | | | | more value to offer. |
| to fail” is very relevant when | | | | Pricing is the easiest of the marketing |
| talking about starting a business. | | | | mix to change. You may find that a large |
| SBA’s statistics claim over half | | | | competitor will under price you to |
| of new businesses fail in the first | | | | ensure you can’t make a profit and |
| three years and the common factor is | | | | your car wash goes out of business. |
| poor planning or under-capitalization | | | | Management & Employees |
| (which is also poor planning). | | | | In this section you would describe who |
| Getting Started | | | | is going to manage the business on a |
| The first step in creating a business | | | | daily basis as well as provide strategic |
| plan is just getting started. Writing | | | | direction (if these positions are |
| the business plan may seem overwhelming | | | | separate). Each of these people need to |
| at first, but if you break the plan down | | | | have a brief biography included as well |
| to bite sized pieces and work on one | | | | as a resume in the appendix. Try to show |
| section at a time won’t seem as | | | | how the experience and education of |
| daunting. Begin with what you know first | | | | these people will be able to |
| and describe your business and your | | | | successfully execute the strategy in the |
| product or services. Work towards the | | | | business plan and succeed. Many times |
| more difficult subjects such as | | | | the owner may not have the specific |
| marketing, operations and financials. | | | | experience for this business, so it is |
| Don’t worry about it being perfect | | | | very important to pull their other |
| now, just get the concepts on paper - | | | | professional experience in and explain |
| expand and refine later. If you get | | | | how it will make for a successful |
| stuck on a section in the plan, skip it | | | | operation. Next, a brief explanation of |
| for now and come back later when you | | | | the employees is in order including: |
| have more details. | | | | What positions need to be filled |
| Who is your audience? | | | | When they need to be filled (This is |
| When writing your car wash business | | | | important in developing financial |
| plan, you need to keep in mind who your | | | | projections as you may have some |
| intended audience is and why you are | | | | employees come on after you start) |
| writing the plan. Why? A plan for the | | | | How much they get paid (Be sure to |
| bank will be less interested in the exit | | | | calculate payroll taxes as well, |
| strategy and return on investment than | | | | estimate 15% if not sure) |
| one for equity investors. Additionally, | | | | It is also recommended to add the |
| a plan for written for internal use will | | | | professional and advisors to your |
| be different than one looking for | | | | business. These people include: |
| financing as a bank is not necessarily | | | | Board of directors |
| interested in detailed operations of the | | | | Consultants |
| business. | | | | Accountants |
| Structure | | | | Attorneys |
| Business plans tend to have a lot of | | | | Bankers |
| elements in common. While there is not a | | | | Mentors |
| format that all business plans follow, | | | | Operations & Location |
| there are generally accepted guidelines | | | | The operations and location section of |
| that most follow as the order in which | | | | the plan illustrates how you are going |
| the subjects flow are not random. The | | | | to make or acquire your product and |
| Business Description of a business plan | | | | information about your business |
| is aimed at painting a picture of your | | | | location. |
| business and why this business will be | | | | Operations – Explain how and where |
| successful. The Marketing, Management | | | | your products or services are made. A |
| and Operations sections are researched | | | | few points to include in your plan |
| and a strategy of how your business will | | | | How does your car wash operate, what |
| compete and operate is developed. Last | | | | steps are in your service? |
| financial projections show in numbers | | | | Who are your suppliers? |
| what you explained in the business plan | | | | What are the terms and lead time for |
| for the sales and expenses. | | | | this product? |
| Breaking these three major sections down | | | | Location – Location is where you |
| even further, a business plan consists | | | | will be doing business out of. If you |
| of six key components: | | | | are in the classic, I can’t get my |
| Executive Summary | | | | location until I get a loan so I |
| Business Description | | | | can’t finish my business plan |
| Marketing | | | | scenario, list what features you are |
| Managers & Employees | | | | looking at in a building along with |
| Operations & Location | | | | average prices or rents and pad that |
| Financial Projections | | | | number a little just in case. A few |
| In addition to these sections, a | | | | things to add: |
| business plan should also have a cover, | | | | Department of Transportation traffic |
| title page and table of contents. | | | | count – most states have this |
| How Long Should Your Business Plan Be? | | | | information online to show how many |
| The answer that nobody liked in school | | | | vehicles pass your location each day. |
| applies to a business plan which is, | | | | Building description |
| “as long as it needs to be”. | | | | What is the size |
| The more complex a business or the more | | | | Where is it located |
| sophisticated investors or funds | | | | Specific reasons for this property |
| requested will increase the length of a | | | | Proximity to suppliers, roads, airports, |
| plan. An average car wash business plan | | | | railroads, and shipping centers, etc. |
| narrative should be 4-15 pages plus | | | | Zoning |
| financials and appendix items. | | | | Average utilities – Be sure to get |
| Business Plan Outline | | | | the last 12 months from the electric |
| Executive Summary | | | | company if the building had been |
| The executive summary is the first part | | | | occupied. This could be an expensive |
| of the business plan but is the last to | | | | lesson from a dishonest landlord. If you |
| be written. It gives the reader a quick | | | | are opening a new location, try to talk |
| glance of what your business proposal is | | | | with other car wash operators in a |
| about and what you are asking for. This | | | | non-competitive area to get a estimate |
| part is critical as most readers will | | | | Add pictures to the appendix |
| scan this section before deciding | | | | Add a floor plan to the appendix |
| whether to read further. | | | | Purchase price or monthly rent/lease |
| The executive summary should typically | | | | Include sales/rent/lease agreement in |
| be about one-half of a page in length | | | | appendix |
| and include what you would cover in an | | | | If building or renovating be sure to |
| elevator pitch such as: | | | | include quotes as this is an area |
| Explain the condensed version of the | | | | frequently underestimated in costs. |
| business concept | | | | Financial Projections |
| Product description or service | | | | Financial projections are placed at the |
| proposition | | | | end of your business plan, before the |
| This section should emphasize any unique | | | | appendix but it a very critical piece to |
| features or benefits that what is | | | | the plan. The three must-have financial |
| currently in the industry or area, aka | | | | statements are a cash flow statement, a |
| why would someone buy your product over | | | | profit and loss statement and a balance |
| the competition. | | | | sheet. The information already provided |
| The demographics of your market | | | | in the narrative portion of the business |
| The Management team | | | | plan must match the financial |
| When the anticipated start date is | | | | projections. Most financial projections |
| Your equity position | | | | are three years in length. It is a good |
| How much are you asking for | | | | idea to include a Notes & |
| Concise is the key in the executive | | | | Assumptions to Financial Projections |
| summary. You will go into more detail | | | | page to both help make sure all of your |
| later in the business plan. | | | | numbers come through and provide an |
| Business Description | | | | itemized list to provide clarity for the |
| The purpose of the business description | | | | reader. |
| is to objectively describe the car wash | | | | Notes & Assumptions to Financial |
| business details and future potential | | | | Projections |
| include: | | | | Loans |
| Mission | | | | Break out each loan (building, |
| What the business does | | | | equipment, inventory) |
| Description of products and/or services | | | | Amount |
| Industry information | | | | Interest rate |
| Business Organization | | | | Length |
| Status of the business (start-up, | | | | And any monthly costs not discussed in |
| expansion or purchasing) | | | | business plan narrative |
| Current and future goals | | | | Cost of goods/inventory |
| Any facts or figures should be noted and | | | | Advertising |
| sources included in the business plan. | | | | Employee wages |
| This information is important should you | | | | Insurance |
| need to defend your data and | | | | License & fees |
| assumptions. The business description is | | | | Miscellaneous |
| where you are trying to paint a picture | | | | Professional fees |
| of the potential of your business along | | | | Rent/property taxes |
| with the facts to support it. Try to | | | | Repairs & maintenance |
| inject energy and excitement to get the | | | | Supplies |
| reader enthusiastic about the idea, | | | | Telephone |
| without going overboard of course. | | | | Utilities |
| After describing the business, it is | | | | Vehicle expense |
| time to describe and additional products | | | | Etc. |
| or services your car wash is selling. | | | | Anything else that needs to be explained |
| Keep in mind that it is important to | | | | in the financials that is not in the |
| show how your products and services are | | | | narrative |
| better than the competition. If you | | | | Financial Projection Sections |
| don’t have a good answer than you | | | | Startup Expenses – These are all |
| should rethink your strategy. What is it | | | | expenses you will incur prior to opening |
| about your car wash that is going to get | | | | your car wash. It is recommended to have |
| the customer to change doing business | | | | quotes available or in the appendix for |
| with the competition? | | | | the larger items. It is also recommended |
| Marketing | | | | that you pad your numbers some as there |
| A very important part of your business | | | | will always be unexpected expenses that |
| plan is the marketing section. | | | | were not accounted for. |
| Regardless of the quality of your | | | | Sources and Uses of Funds – This |
| products and your services, your | | | | section details how the loan money will |
| business will be lost in the clutter of | | | | be used (inventory, car wash equipment, |
| advertising. If you don’t know | | | | repairs and improvements, working |
| your customers, how will they ever find | | | | capital, etc) and who is providing it |
| you? All of this begins with doing some | | | | (bank, investor or owner). You will |
| research. | | | | likely need to be injecting 20% of your |
| Customers: Who Is Your Market | | | | own money and maybe more depending on |
| The first step is to determine who you | | | | the risk assessment of the business and |
| are going to sell to by identifying | | | | your personal finances. |
| common characteristics of your market | | | | Cash Flows - The cash-flow statement is |
| such as age, income, race, religion, | | | | one of the most important pieces of your |
| education, interests and/or geographic | | | | business plan. It shows a schedule of |
| locations. While everyone will want to | | | | the money coming into the business and |
| wash their car product how are you going | | | | expenses that need to be paid and |
| to effectively advertise to everyone and | | | | whether you have enough cash to sustain |
| still make a profit? What you need to do | | | | the business gained during the warm |
| instead is determine the group or groups | | | | month to cover the costs during the |
| of people who are most likely to use | | | | winter months. Every part of your |
| your car wash services and market to | | | | business plan is important, but none of |
| them. After all you are trying to | | | | it means a thing if you run out of cash. |
| generate a positive return on your | | | | Should this number be negative, you |
| marketing dollars, so use them wisely. | | | | either need to raise sales, reduce |
| Competition | | | | expenses or have more cash. Your cash |
| In today's ultracompetitive marketplace, | | | | flow statement will typically be three |
| there is going to be competition, no | | | | years in length with the first year |
| matter how creative your business | | | | analyzing the monthly figures and later |
| concept is. Attempting to run a portion | | | | years by quarter. Don’t be |
| of your car wash business better than | | | | intimidated with the cash flow statement |
| the competition may be a difficult | | | | as it is merely a future look into your |
| challenge so it is often better to focus | | | | checking account. |
| on planning on being different and | | | | Profit & Loss – This |
| competing with them less directly. Can | | | | statement, while similar to the cash |
| you serve a particular market niche such | | | | flow statement but illustrated annually |
| as the elderly that isn’t being | | | | looks at the effects of non-cash charges |
| looked at? Can you identify a unique | | | | such as depreciation and amortization to |
| operations/marketing/distribution | | | | get an accounting overview of the |
| strategy with a mobile approach? Even if | | | | operations of your business. |
| you don’t have direct competition | | | | Balance Sheet – The balance sheet |
| in your area meaning someone selling the | | | | is a summary of the value of all assets, |
| same or similar products/services, you | | | | liabilities and equity for an |
| will have indirect competition for | | | | organization at the end of each year. A |
| replacement products/services. If you | | | | balance sheet is often described as a |
| indicate in your plan there is no | | | | "snapshot" of a company's |
| competition it will be viewed that there | | | | financial condition and will show the |
| is either no market for your product or | | | | value of the business over time. |
| you have not done your research. | | | | Personal Financial Statement – If |
| Optimally you will want information on | | | | you are looking at bank financing every |
| at least three but no more than five | | | | person who will have a 20% or more |
| competitors. List information about who | | | | ownership position will need to provide |
| they are, how long they have been in | | | | a personal financial statement to show |
| business, location, products or services | | | | how effective they are at managing your |
| offered, perception on pricing, quality, | | | | money. This statement will show your |
| etc. and compare your advantages and | | | | assets (checking & savings accounts, |
| disadvantages. If the information you | | | | cd’s ira, 401K, valuables, home, |
| are looking for is not available online, | | | | vehicle, etc) as well as assets |
| you may need to pretend you are a | | | | (mortgages, credit card bills, |
| customer to get some of this | | | | installment accounts, etc) |
| information. | | | | Appendices |
| Distribution - How Will You Get the | | | | Appendix items are various pieces of |
| Product To The Customer: By looking at | | | | information that help make your case. |
| who your market and competition is, you | | | | Include details and studies used in your |
| will have an idea of how to get your | | | | business plan; for example: |
| product to them. Perhaps through your | | | | Quotes for items over $500 |
| research you will find a strategic | | | | Resumes of the management team |
| advantage to serve the customer that the | | | | Industry research |
| competition does not. | | | | Demographic data and trends |
| Promotional Strategy | | | | Maps/floorplans/blueprints of location |
| With the above steps researched, the | | | | Leases and contracts |
| promotional strategy follows. The | | | | Letters of support |
| promotional strategy is where most | | | | There is a lot to creating your business |
| entrepreneurs fail as they use the | | | | plan but will definitely make your |
| blanket statement that they are going to | | | | business stronger. While it may seem |
| advertise in the newspaper, radio and/or | | | | easier to have someone else write your |
| television without thinking through the | | | | plan, there is no substitute to writing |
| process or the customer. The promotional | | | | it yourself. This is your business and |
| strategy provides you a map of how you | | | | by writing it yourself you will have a |
| are going to reach your market in the | | | | better understanding of your business |
| most efficient manner possible. | | | | and strategies for success. There are |
| Advertising is expensive, use it wisely. | | | | also many free business plan templates |
| Sales Projections | | | | and workbooks available on the web to |
| On of the more difficult areas of the | | | | help you get started. You can use these |
| business plan is coming up with sales | | | | to help get started creating your |
| projections. This number is probably | | | | business plan and then modify it for |
| going to be wrong and that’s ok. | | | | your car wash business. |
| What you want is a figure backed up with | | | | |