• Home ❯
  • Blog ❯
  • How to calculate the capital requirement for your (new) car wash

WashTec Cleaning Technology GmbH

Argonstraße 7

86153 Augsburg

Telephone +49 821 5584 0

Contact form

How to calculate the capital requirement for your (new) car wash

If you want to start your own business with a car wash, you should draw up a comprehensive capital requirement plan. This includes all items for which you will need money in the near future. It is important that you think long-term – you do not only need money at a certain time, but over a certain period of time.

These points should be included in the capital requirement calculation

A good capital requirement plan comprises six different points. These are as follows:

  • The start-up costs
    Have you spent money on consultations, had to obtain permits or pay registration fees? You post these expenses here.
  • Fixed assets
    If you had to buy the land for the car wash and the plant itself, this is certainly the largest item in your capital requirements plan. Here you list all expenses for plots of land and the real estate, for machines and facilities and also for equipping the business. The company's ancillary and vehicle costs are also included in this category. As a franchisee, you also enter the franchise fees here.
  • The operator's salary
    It is not enough to just mention the business costs. After all, you yourself have to live. This includes the costs of renting or paying off loans. The same applies to your cost of living and that of your family - i.e. your need for food, clothing and so on.  
  • The cost of the start-up phase
    For at least the first three months, you should create a capital requirement calculation for ongoing operations. What will be the cost of your staff during this period? What will you be spending on advertising, your insurances and tax? As carefully as possible, list the operating costs for one quarter. You should therefore enter the prices for all these items for three months because you can never predict exactly how your company will start. 
  • Current assets
    Current assets include, for example, costs for cleaning products and items as well as for goods that you may want to sell at the checkout. Again, you should plan for at least three months.
  • Interest payments
    Finally, in the interest payments, you list the repayments of loans and the interest.

Calculate capital requirements easily with the Excel table

If you arrange all important items according to these six subitems and enter them in an Excel spreadsheet, you can easily keep track of them. For each item, you can display the subtotal and finally the total. This constitutes your capital requirement.

How detailed must the capital requirement plan be?

Basically, the safest way to do it is to make your capital requirements plan as detailed as possible. This is particularly easy if you have also prepared a business plan for your planned car wash. However, as a rule of thumb, you can keep in mind that you should be particularly careful if you want to persuade investors or take out a loan from a bank. They have a keen interest in seeing your business become successful and profitable, and are more willing to help you if your capital requirements plan appears watertight all around.

Somewhat less strict is the Employment Agency, which can grant you subsidies. But it is best not to take this fact as a reason to not to prepare your application carefully. After all, an application for funding can still be turned down if it seems to the persons making the decision that you have not thought the whole process through. And it is also important for you to work with the most accurate figures possible. In doing so, you will protect yourself from unpleasant surprises in the coming months.

Summary: The capital requirement plan is not complicated, but requires care.

If you want to calculate your capital requirements, you should carefully consider whether you are missing out on certain sums. From all the costs of buying the site and the car wash, to your own needs and staff costs, to taxes, insurance and repayments, you have to think in all possible directions. This is the only way to make your plan truly comprehensive, and the only way to make it look well thought-out and trustworthy for banks and investors.