Did you know that Australia had over 20.1 million registered motor vehicles as of 2021? And it continues to grow year on year?
So if you’ve been thinking of launching an auto detailing business, or specifically a car detailing business, you are on the path to success with this business idea.
Wondering why?
That’s because most of these vehicles will require cleaning and repair services at some point, not to forget auto enthusiasts who love customizing their vehicles to fit their aesthetic choices or to set their auto apart from the rest.
Clearly, auto detailing or mobile detailing businesses can provide services to such a wide range of customers!
In this article, we’ll take you through the ins and outs of starting an car auto detailing business in Australia—we’ll cover everything from creating a business plan, registration, financing and the legal aspects that you should know.
Read along!
What is an Auto-detailing Business
An auto detailing business provides services such as cleaning, restoring, finishing, customising the interiors and exteriors of an auto. Exterior cleaning services could be used to restore the auto’s finish, windows, wheels, etc. Interior detailing can provide repairs, deep cleaning of the interior of the auto, provide customised seat leather, dashboards, etc.
Starting an Auto-detailing Business: The Pre-Steps
An auto detailing business or a car detailing business start-up can be a lucrative venture. With a rising number of people owning vehicles and a growing niche customer base that invests in customizing their autos, these businesses can bring in large profits.
These are the things that you will need in order to start a car detailing business:
- Research: While a large number of households own a vehicle, they are not evenly distributed across the country. You will need to get a sense of the consumer base you will provide your services to. If you live in a city, your auto-detailing business will have a larger consumer base. If you live in the suburbs, you might have a smaller customer base and less competition. Before you start your business, understanding the market will help in determining the size and structure of your business.
- Financing and Equipment: Once you have a business plan, you can reach out to investors who might be interested in your business. You can also explore financing options with the bank, as there are plenty.
Create a Business Plan
Once you know the market where you will be operating, you can devise a business and structure and plan. Your business can be set up as a sole-trader, partnership, company or a trust, depending on your resources. Your business plan should have a clear map of competitors, potential customer base, financing options, potential space for setting up the business etc. Your business plan should have the following:
- A clear timeline of research, business set-up and operation
- Research on competitors and consumers in your area
- Costs of setting up your business and your financing options
- Any legal permits/licenses required for your auto-detailing or car-detailing business
How to choose the best business structure
Your auto-detailing business will be structured based on your resources and the size of your business. Below are the types of business structures widely used:
- Sole trader: A low cost option for an individual running a business, this structure considers the individual and business to be the same entity. A sole trader business has low costs and is not a complex structure, this also means that the individual is liable for the company’s debts/losses.
- Partnership: A partnership is when two or more people run a business and the business is controlled by all partners. This also means that all partners are responsible for the debts and obligations of the company.
- Company: A limited liability company has a more complex structure and can legally sue and be sued. However, it is considered a separate legal entity and hence individuals cannot be held liable for the debts and obligations of the company.
- Trust: A trustee runs the business on behalf of the trust’s beneficiaries.
Sole trader and partnership businesses are low-cost options and great for people just starting out their businesses. A company is generally used by a larger business with a large number of employees. A trust has tax-benefits but is still expensive for a small business to maintain.
Learn more about different structures in this Webinar.
Financing Your Business
Once you have your business plan and structure, you need to determine the cost and financing options for your business. Lawpath has partnered with Prospa that can help you here.
If you already have your own space for the business but still need to invest in equipment and renovation, you will need to estimate those costs.
If you need to lease or buy new space for your business, you will need to determine associated costs. Once you have determined your business set-up costs, you can explore your financing options from investors, or banks.
Registering Your Business
Now that you have a space, a plan and financing, you are ready to start your business! But, first you need to register your car-detailing or auto-detailing business. You will need to apply for an Australian Business Number (ABN).
An ABN also enables you to apply for the goods and services tax (GST) concessions. You can learn more about applying for an Australian Business Number (ABN) here.
How to Structure a Business: Choosing The Right Employees
Your business is incomplete without a team of talented employees. You need to determine the type of employees—casual, part-time or full time— your business needs before hiring employees. Do you need to hire part-time or full-time employees? Do you need to hire any contractors or consultants?
Here is a webinar on how to hire the right employees for your business.
Marketing Your Business
Once you have set-up your business, you need to market your services to attract customers. You can hire a marketing and advertising team to run innovative marketing campaigns.
You can also market your business on a smaller budget using online marketing campaigns.
Auto-detailing and the Law
Your auto-detailing business can require the following licenses, permits and documents:
- ABN: In order to start your car detailing business you would require a car detailing business licence. Any business requires an ABN to operate in Australia. You can apply for an ABN with your business name.
- Employment agreements for your new hires can outline your employee’s responsibilities. You can also use a sub-contractor agreement if you choose to employ a sole-trader or contractor.
- Trade waste licence: A car wash needs a trade waste licence to ensure that harmful pollutants are disposed safely.
- Motor vehicle tradesperson certificate: In states such as NSW, you might require a tradesperson certificate to work on the mechanical operation of a vehicle.
- Motor vehicle repairer licence: You may need a motor repairer licence to provide auto repairing services in some states such as NSW.
- Naming: Your business will require a name. Registering your business name or trademarking a logo will protect you from identity theft.
- Rental agreement/certificate of title of the auto-detailing space
- Workplace health and safety (WHS) regulations: Your business must comply with workplace health and safety standards.
- Insurance such as insurance for equipment and machinery, property and buildings and business interruption
You can also find and customise other legal documents for your business using Lawpath.
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FAQs
Who uses the services of an auto-detailing or car-detailing business?
Anyone who owns a vehicle at some point will require maintenance services. Some vehicle owners also want to customize their vehicles. Auto-detailers provide a range of services to fulfill those needs. They can customie your vehicle or simply provide cleaning and repair services.
Are auto-detailing businesses profitable?
Auto-detailing businesses are in-demand due to an increase in vehicle ownership in the country. As more people own more vehicles, they will also require maintenance solutions for their vehicles.
How Lawpath can help?
Starting a car detailing business can be a daunting task. You can hire a lawyer to make this process easy.
Lawpath can also provide legal documents and legal consulting services for your auto-detailing business.
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