ECT Europe provides several examples how to set prices for new car wash business. The principles are very similar for various industries so you might find something useful for you too, even if you are not in car wash. Useful for new business starters. www.ecotouch.eu

1. How to set
prices for auto
detailing/ car
wash business

2. Detailing pricing strategies
Setting prices for your detailing business can be a
daunting task for a new business owner. It is vital
that you take the time to conduct a thorough
analysis of a pricing strategy before opening your
doors.

3. 1. Establish personal and
business goals
The first step is to sit down and determine goals
for yourself and the business. Is this a part-time
business that you want to earn some extra cash
on? Or, is this going to be a full-time job that will
require bringing on extra employees?
• Questions to consider:
How many hours per week can I dedicate to my business?
How much do I want to make on an hourly or yearly basis?
Where do I want to be in 3 months? 1 year? 5 years?
Where do I want my business to be in 3 months? 1 year? 5 years?

4. 2. Conduct market research
Start with market-level research in your town or city.
It is important to consider demographics,
population, household income and other factors.
• Market-level questions to consider:
What is the population of my town?
How many people have cars?
How often do people wash their cars?
Who are the competitors? Car detailers? Auto detail shops?
How much is the competition charging and what are their services?
Customer-level questions to consider:
Who is my target market? Age? Demographics?
What is their disposable income level?
How much are they willing to spend? For example, conduct some
informal surveys amongst friends, family or acquaintances.
What do they value most? Cleaning speed? Quality? Price?

5. 3. Set your service levels
Now when you have the foundation for your local market
and the customers you plan on targeting, you'll need to
set your service levels. Some example of detailing
service levels are as follows:
Basic services: exterior wash, interior vacuum
Premium services: exterior wash, exterior carnauba wax,
interior vacuum seats and floors, glass cleaning, vinyl
cleaning
Additional services: tyre dressing, carpet shampoo, clay
bar, scratch removal, pet hair removal, vinyl conditioning,
odor removal

6. 4. Determine your costs and
margins (1)
This is your most important step in setting your detailing pricing strategy. First,
you'll need to examine your cost of goods for each service that you offer.
We are going to use the following example: you are offering a waterless wash
service. A customer brings in a mid-sized sedan. It takes you 15 minutes to
wash the sedan. How much should you charge?
First of all, break down your cost of goods on all the products you use in your
detailing service.
You'll want to determine your cost per car when using Waterless Car Wash.
Here's the example (prices are used as the sample calculations only and might
differ in various countries):
5 l of Eco Touch Waterless Car Wash concentrate costs 130 EUR. For the
ready to use product you need to dilute it at 1:10 (1 part of concentrate, 10 parts
of water, 11 parts altogether).This makes 55 l. In order to wash one car with Eco
Touch Waterless Car Care you need ~150 ml of car wash product.
This means that with 5 l of concentrate you can wash around 366 cars. Your
cost of goods is 0.35 EUR per car.

7. 4. Determine your costs and
margins (2)
1) Determine your own hourly wage
How much is your time worth? How much do you want to earn per
hour?
Hourly wage / 60 (minutes per hour)
For example, we want to make 25 EUR per hour. Therefore, every
minute of our time is worth 0.41 EUR.
2) Determine how much of every product is used with
each service you offer
When ordering the formula in concentrate, the cost per wash is
pennies on the dollar. Don't forget that you also save a lot on water
bills!
3) Determine how much time is spent on every service
that you offer.
That mid-sized sedan from the example above took us 15 minutes.
Therefore we spent 6.15 EUR worth of time.

8. 4. Determine your costs and
margins (3)
4) Calculate your total costs.
Cost of Goods (5 l of concentrate) + Hourly Rate = Total
Costs
0.35 + 6.15 EUR (0,41*15)= 6.5 EUR
5) Set your prices.
Now when you have your total costs, it's time to set your
pricing for the service. Let's say you want to markup your
services by 100% (double your costs). Then you should
charge 13 EUR for the waterless wash service.

9. This is just a starting point in order to help
you set a detailing pricing strategy. As your
business grows, there will be many more
factors to consider. Insurance, employees,
gas and rent are a few of the other costs
you'll need to incorporate in your pricing
strategy. Look for future articles that cover
these topics. Let us know, if you have any
other questions in the meantime.

10. Find more ideas at www.ecotouch.eu