What to choose Shop or Mobile auto detailing business to make more profits

Updated on:

October 19, 2022

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Shop vs Mobile auto detailing business

If you are thinking about starting your own car wash business, it is important to decide from the start if you want to open a mobile car detailing business or an auto detailing company and have a shop. Both of these options are very profitable, but have a lot of differences like startup costs, equipment costs, and revenue. In order to succeed in your start-up, it is important to make an auto detailing business plan.

In this article, we will show you business plans for mobile car wash business and auto detailing business and give tips on how to succeed in the car wash industry.

Table of Contents

Definitions of mobile and shop detailing

What is a mobile car detailing business?

Mobile auto detailing is when professionals come to the car's location and perform cleaning or any other service at the vehicle owner's site. This service has become popular these last few years due to its convenience. Mobile detailing is beneficial to a lot of clients due to variety of factors like: saving time on traveling, environmental concerns, high gas prices, and the ability to relax at home while their car gets pampered.

We will talk about the pros and cons of a mobile detailing business later in the article.

What is stationary auto detailing business?

Auto detailing usually means that there is a shop or a set location where different services are performed on a clients vehicle. Having your own shop makes it easy to wash a lot of cars in one working day since you can have a lot of employees, unlike if you have a mobile van. Having an auto detailing shop can be very convenient if you learn how to run a place like this properly.

We will see different pros and cons of having an auto shop further in the article.

Comparing mobile auto detailing and auto detailing shop

To really see the business structure and business plan of each of there options, we will compare side by side in which aspects each one is generally better.

locayions on google maps

1. Business location

The most obvious difference between mobile detailing and an auto shop is the location. You could find many pros and cons between having a fixed location e and a flexible location.

Mobile

When you are a mobile car detailing business, you don't have to pay rent or buy a specific site for your business. This can save you a lot of money and provide you with more funds to spend on marketing of your business, for example.

Some clients don't like spending time on the road to come to a detailing shop and also spend an hour or more just to get their car cleaned. This is why it is important to understand your customer base and work from there to decide what would be most popular.

One of the cons to mobile detailing is the gas cost. Due to the current inflation, gas prices are high. If you have a client living an hour away from you and there is traffic, you might spend half of the services charge on gas.

Another takeaway is that it is hard for people to find out about your business if you don't have a visible location in your community. Unless you have an amazing marketing strategy, this can be a big problem.

Shop

Having a physical business location can be very beneficial. If you are located in a good area in the neighborhood, where there is a lot of traffic and variety of restaurants, having a shop can be a big advantage. It will be easy to get new customers since many will drive by your physical location and drop by for a quick clean up while enjoying their meal at a near by restaurant.

The disadvantage of this business is that it can be very hard to find the right location for a shop. Most renting spaces can cost a lot of money, and you might spend more money in the first couple of months of your business on rent than actually making any big profit.

startup costs for detailing business

2. Startup costs

Startup cost is very important to figure out before you open either of the forms of this industry. Nobody wants to have a big bank loan, so figure out what money you can allow yourself to invest in such startup.

Mobile

Mobile car detailing business is the more affordable option. In general, all you need to start is a van and equipment. This will make financial decisions much easier, especially if you can have personal assets that can be easily spent.

Shop

For this category, an auto detailing shop is less beneficial. There are higher startup costs to set up a shop in a particular location plus rent. For this option it is most likely that you will have to get financing through lenders which can be a time-consuming process. This can also impact the profits of your business.

auto detailing equipment

3. Equipment

Both of these business operations require a lot of detailing equipment. This includes items like vacuum cleaner, microfiber towels, steam cleaners, cleaning chemicals, pressure washer, and more. If you want to do more services than just basic cleaning, it is best to decide right away which option is better for you.

Mobile

Having a mobile detailing business can be quiet restraining when it comes to cleaning supplies. If you do steam cleaning, a steamer will take majority of the space in your van, leaving very limited space for any other equipment. In addition, if you forget any of the supplies, you won't be able to just grab it from a storage place like if you were working in a shop.

Download full list of equipment you will need

Shop

An auto detail shop has much more storage for extra tools that can be required for a speciality service. Because of that, you can have variety of additional detailing services that can bring you a lot of profit. Plus, you will attract customers since you will be able to provide more services like ceramic coating, polishing., and engine cleaning.

business insurence types for auto etailing

4. Insurance

One of the biggest differences between a mobile auto detailing business and auto detailing shop is the type of insurance you need.

There are a couple of different options for both, so we will go over them all below and then suggest which ones are good for mobile detailing and for an auto shop.

Types of insurance

4.1. General liability insurance

This type of insurance is similar to public liability insurance but has more aspects that are covered. This is why it is better to get this type than a public liability insurance.

General liability insurance is used to pay for defense costs and compensations when any kind of third party decides to file a personal injury or property damage claim. This insurance also provides optional policies that you can get additionally.

4.2. Advertising injury coverage

If a third party files a claim against your business for slander, libel, false advertising, and other similar acts, this coverage will cover any defense costs and compensatory payments.

4.3. Products and completed operations coverage

If after completing any detailing services offered you have caused a personal injury or property damage to a customer, this coverage will cover defense costs and compensation for losses ir suffering if your client files a claim.

4.4. Property damage liability insurance

This type of insurance protects you from being financially liable for any damage to your client's vehicles caused by tools and improper technique.

This type of insurance can help a new auto detailing business since many accidents can happen when you are just getting into deep cleaning and detailing. For example, if you or your employee is carrying a lot of heavy tools and drop one on a clients car causing a damage, this insurance will help resolve such problem.

4.5. Professional liability insurance

This insurance covers a couple of mishaps that you or your employees might make.

4.6. Negligence

When while cleaning a clients car an employee causes a damage like a scratch or a dent due to unprofessionalism or an accident.

4.7. Misrepresentation

When while charging a customer for the service performed, an employee registers the wrong price. This results in a customer paying more that what the price should have been.

4.8. Violation of good faith

An example of this is when a business company hires you to wash 10 cars but you only manage to finish cleaning 5 cars.

4.9. Commercial auto insurance

This insurance is required when your car detailing business owns a vehicle that is specifically used only to perform services offered by your business. This insurance helps to pay for damages or medical bills if you ever get involved in a car accident on work time or while performing one of your services.

Commercial auto insurance offers protection for things like:

Liability coverage

If you are in a car accident where your actions are the cause of it, this policy will cover the other party's injuries or property damages.

Medical payments

A pool of funds that covers immediate medical bills of any party involved in an accident.

Collision coverage

This coverage makes sure that your vehicle is restored to the condition it was before the accident. Damages due to vandalism, some weather acts and theft also fall under this policy.

Uninsured or underinsured coverage

Many drivers on the road do not posses an active insurance on their vehicle. Others could be considered uninsured if their coverage limits are not high enough to cover grand damages that they have caused due to an accident. This coverage helps to resolve these obstacles if you get involved in an accident with people in those situations.

Mobile

Even though you are not working in a physical location, you still ned to get some kind of a car wash insurance. You need to cover the vehicles that you are using to conduct your business, as well as the employees that are working for you.

For this type of detailing business, you will need to get a business auto insurance like property damage liability insurance, commercial auto insurance, general liability insurance, and professional liability insurance.

You can choose which insurance is more beneficial for your business since many of these protect similar things in their policies. For example, general liability covers similar things that property damage insurance does.

Shop

Usually, when you have a set location for your business, you will run into more insurance costs. There are more accidents that can happen since it is on your location of business.

It is recommended to get public liability insurance, general liability insurance, property damage liability insurance, and professional liability insurance.

mobile auto detailing license

5. Car detailing license and permits

Most of the licenses and permits you need depend on what state and what area your are conduction your business. Whether you are doing a mobile car detailing business or detail cars in a specific location like a shop, you need to get business license.

You need to check your state, local county or town business license office for more information regarding license, legal requirements, and permits.

Mobile

For mobile car wash, there is usually less licensing requirements. Although, it is always important to check out which permits you might need for this kind of business.

Usually, the necessary permits come under the jurisdiction of departments under your state and local offices like the Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA) and Water Department.

It is best to ask about the wastewater discharge requirements and if you need a water reclamation system while you are enquiring about your city business licenses.

Shop

If you have an auto detail shop, the Small Business Administration (SBA) shows that you make a strategic decision about what location you choose for your business. Their website has a descriptive guide to licensing and other information. You will see information about the local zoning requirements for the fixed location you have chosen for your business on the Small Business Administration website.

scalability of mobile auto detailing

6. Scalability

Scalability is the business' capacity to adapt to increased workload and market demands. A successful scalability demonstrates when a firm can adapt to higher demand while also benefiting from such business investments.

Mobile

An example for scalability for a mobile auto detailing business plan is adding extra vehicles. If you have the capital and a growing demand for your quality service, it would be beneficial to expand your services with an extra vehicle.

Getting an extra car is significantly less problematic than expanding your business when you have a shop.

Shop

It is more time-consuming and requires more funds to scale out an auto detail shop. Adding another shop to your business will require to do research about the new location where you are trying to open another establishment. Investing into a new roof for your business will also include a lot of additional costs like rent.

business plan for auto detailing

Car detailing business plan

No matter what kind of car wash business you want to open, you need a good business structure which can be taken from a successful business plan.

We are providing you with a simple example of a useful business plan, but you can always tweak it to your own taste since this is just an overview of the important points.

1. Demographics

You need to find out where potential customers and ideal customer are and how you can reach them. This is especially important for an auto detail shop since you need to make sure that you will get customers easily in your chosen location.

2. Services offered

Find out what services you are able to give and which ones are most profitable. This include interior services like car's interior deep cleaning, leather restoration, mold removal, and more.

Other additional services can be ceramic coating, polishing, dent removal, and other. Before you put all of these services on your website or services list, you need to make sure that your car detailers are able to perform these skills.

3. Funding

Before opening any small businesses, you need to determine that funding that is needed. There are a lot of different types of funding like self-funding, venture capital from investors, or a loan. You need to find out which solution is best for your financial situation on your own.

4. Marketing plan

Marketing is very important in order to have a successful business. You need to establish a marketing budget and go from there.

Think about how much funds you will need for digital advertising, paid ads, business name cards, and other marketing strategies like contacting auto dealerships to find out if you can make a contract with them.

employees for your auto detailing business

5. Employees

It is very important to hire employees that can be taught to be a reliable auto detailer or already know all the necessary skills.

You also need to decide is you want to have employees or independent contractors. For employees, you will have to provide benefits, deduct employment taxes, and provide worker's compensation. With Independent contractors you don't need to provide benefits.

These are just the basic points that should be included in your car detailing business plan. You should add much more details to it in order to a successful firm.

Conclusion

Based of all the information that we have provided, you can make your own conclusions whether a shop or a mobile car wash business is more beneficial for you. Both of the options have their own pros and cons, it just depends on what risks you are willing to take for both.

If you liked this article make sure to check out our other pieces on the website.

Yvan Lacroix
Kristina Tretyakova

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