Business Plan
For
Mobile Power Wash Contract Cleaners

By

Robert M. Hinderliter, President
&
Larry Hinckley, Senior Technical Advisor

Delco Cleaning Systems of Fort Worth
2513 Warfield Street
Fort Worth, Texas 76106-7554
Phone: 800-433-2113, Fax: 817-625-2059
Email: delco@dcs1.com, Website: http://www.dcs1.com

Last update: June 25, 2008

Preface

This business plan is for a start up Mobile Power Wash Contact Cleaning Business. Several assumptions have been made trying to describe a typical person just entering the pressure wash business. The problem is that there is not a typical person entering the business. People from all walks of life enter the pressure washing business. Some by choice, some because they lost their corporate jobs, and still others because they did not fit into Corporate America. Others just want to be their own boss. This means that the following is based on a composite of information that I have gained over the last 30 years. Some over simplification has been done to create the Business Plan. You should not use it as a literal application to yourself or to anyone in particular. It should be used a guide only to create your own business plan.

One problem I encountered was the cost of advertising. Yellow Pages and Newspaper Advertising costs vary a great deal when going from a Metroplex Newspaper to small town newspaper and the same holds true for Yellow Pages. Another problem was that not all contractors itemized their costs in identical categories or the same way.

Another problem is the fact that only about 25% of the Contract Cleaners advertise their businesses. What happens is the Contract Cleaners will do a lot of cold calling and advertising in getting their businesses started in the first year of operation. After that word of mouth and referrals keep them busy. I have had many contractors brag that they have not made any sales calls in 3 to 10 years. Repeat business and referrals keep them busy. Larry Hinckley just had one of these Contractors tell him that he just turned down $95,000.00 per year of business because he just did not have time to do it. His marketing budget is just the cost of his business cards!

Another variable is weather. We showed some decrease in business during the winter months. For many contractors this is a tuff period to get through. While for others it is their best months. A lot depends on the imagination of the individual contractors in searching out and finding winter jobs. Some specializations like Kitchen Exhaust Cleaning are almost insensitive to weather.

The single most important factor in success is sales ability. Sales ability is more important than technical ability. Without "people skills" and the ability to sell yourself "technical ability" is worth very little. I have seen many excellent auto mechanics go into auto repair business for themselves and fail because of poor people skills. You will have to be realistic with yourself in evaluating your own skills and goals.

The most important factor in the growth of your company is your management skills particularly in choosing and motivating people. Again your management skills are more important than your technical skills. You will need to be realistic in evaluation your skills in this area also. For example when PWNA was formed in April of 1993 there was a contract cleaner who attended with his wife. They had 6 employees. By the end of 1998 they had almost 70 employees doing pressure washing. What are your management skills?

We tried to show the Gross Sales and Gross Profit in a reasonable light and not some pie-in-the-sky figure. We believe these figures are middle ground and reasonable. However, you will still need to interpret these figures as to how they may apply to you. There is no way that these figures will apply directly to any particular individual.

The basic projection is based on a Contract Cleaner doing cosmetic cleaning with a Hot Water Mobile Power Wash Rig. However, if you are going to be doings decks with a cold water unit then there will not be any kerosene heat expense but your chemical expense will be higher. You will have to modify the projection based on how you are going to operate and market your business.

What may be more important to you than the financial projections are the following guidelines on costs as a percentage of gross sales. The ranges are based on confidential information from successful contract cleaners and my own experiences of having my own contract cleaning business for 10 years. These guidelines can be used to modify the Financial Projections in the following business plan to fit yourself.

Item........................................ % of Gross Sales (Range)

• Labor including owner salary: 20% to 45%. If you exceed 45% you are losing money.
• Chemicals & Supplies: 2% to 6%, Max ~ 15%.
• Fuel-Equipment: 2% to 6%
• Fuel-Trucks: 2% to 6%
• New Equipment (lease or depreciation): 3% to 6%
• Truck Expenses (Maintenance & Repairs): 2% to 8%
• Equipment Maintenance & Repairs: 2% to 5%
• Rent: 1% to 3%
• Utilities: 0.5% to 2%
• Office Supplies: 0.5% to 2%
• Advertising: 1% to 3%, Max ~ 6%
• Communications (telephone, cell phones, pagers): 2% to 4%
• Insurance: 2% to 3% (For a start up business: $600 to $1200 per year)
• License, permits, business taxes (not income tax):.0.5% to 0.9%
• Professional Services (legal and accounting) 0.5% to 1%
• Bad Debt: 1 to 3%, Max ~ 5%
• Uniforms: 0.5% to 1%
• Water: 0.1% to 0.2%

With the above percentages combined with our projections you can enter them into Microsoft Excel or any spreadsheet program and do your own financial analysis. In our projections we did not include "uniforms" because most contractors cleaners do not use them.

There is a lot of information available on the Internet at the U.S. Small Business Administration's website at http://www.sba.gov/. The information that we are providing is so that you can refer back to this document when filling out SBA Loan forms for projections and etc.

The most popular funding sources for Contract Cleaners are: Credit Cards, banks, personal savings, friends and relatives, credit unions, SBA guaranteed loans, and leasing companies.

At the present time credit cards are probably the most popular source of financing for contract cleaners. When applying for new credit cards you can take advantage of low introductory interest rates. By transferring balances to the new credit card you can typically obtain interest rates between 3 and 10 percent. At the end of the introductory interest rate period it is necessary to start the process all over again with another credit card company in order to keep a very low introductory interest rate.

Business Plan For

George's Mobile Power Wash

George M. Smith, Owner
2513 Warfield Street
Fort Worth, Texas 76106-7554

817-625-4213

Career Objectives

Establish, own, and operate a
Mobile Power Wash Business in Central Texas

Description of business

The proposed name for this new business is "George's Mobile Power Wash". The proposed start date for the business is March 1999.

Delco Mobile Power Wash will be a sole proprietorship with George M. Smith as owner. A Corporation Structure may be evaluated as the business grows.

Description of services offered

The mobile power wash business is business and industry's answer to the major problem of how to keep things clean. Everyone has become concerned over pollution, knowing that dirt can be destructive not only to their image, but can cause costly repairs, renovations, or replacement. Since most items are immovable, practically speaking, they must be cleaned at their location. Mobile power washing has proved to be the solution to the problem.

The basic concept of high pressure washing with detergent has been tested and proven. By mounting the equipment on a truck or trailer mobility has been added. Units typically have the following capabilities: 4 to 6 GPM (gallon per minute flow rate), 1,500 to 3,500 PSI (pounds per square inch pressure), and up to 200 °F. The equipment is similar to a typical coin-op car wash only portable and more powerful. Units typically have gasoline engines and are heated with diesel fuel fired burners for heat. With the addition of a water tank the units are completely portable and independent.

With the correct combination of pressure, flow, chemicals, and temperature a wide variety of cleaning jobs can be accomplished typically without scrubbing or brushing. Additionally, the cleaning can be done without harming painted surfaces, as is the case with steam cleaning and without creating air pollution residue as is the case with sandblasting.

Wash water is captured so that there is "no off property discharge" and discharged to Sanitary Sewer to conform to the Clean Water Act and protect the environment. Each municipality is responsible for developing the exact Best Management Practices (BMPs) for pressure wash contractors for their area.

Typical jobs that are accomplished with pressure washers with the appropriate chemicals and coatings is the cleaning of: trucks and cars, building exteriors, kitchen exhaust systems (vent-a-hoods), house exteriors, airplane exteriors, shopping center parking lots and side walks, parking garages, parking lots, sports stadiums, side walks, construction equipment, manufacturing areas with heavy machinery interior and exterior, farming equipment and buildings, and wood restoration of log homes, decks, and fences. The list is only limited by ones imagination, as there are hundreds of uses.

Location of the Business

The business will be operated from my home with the equipment stored in my double car garage at 2513 Warfield Street, Fort Worth, Texas 76106-7554. An answering machine will be installed to take phone calls when I am not available and I will carry a cell phone

The projection shows rental cost as I am considering operating out of a small self storage center.

The work will take place at the customer's site. No pressure washing will be done at my residence.

Marketing the Business

We will start out by making cold calls in person and by telephone. We will ask for the opportunity to send or leave a brochure and business card. Hopefully these items will get filed for later reference when needed. When cold calling we will collect names, addresses, phone numbers, fax numbers, and email addresses for future contact. This information will be put into a database for continued sales effort. When calling we will determine if they have an immediate need, future need, are they satisfied with there current contractor, or do they know someone else who could use our services. We will make a checklist of questions of the above items as reminders when calling. For prospects that have a need for our services 3 callbacks will be scheduled.

Initially we will concentrate on Fleet Washing and Home Deck Cleaning for homes. Fleet Washing is primarily a weekend activity and Home Deck Cleaning can be done during the week. This will provide a large economic base from which to launch the company. We will also accept all work we can find.

Regular listings in the yellow pages will be put under the following headings: Truck Washing & Cleaning, Steam Cleaning Industrial, House Washing, Roof Cleaning, Building Cleaning-Exterior, Deck and Patio Builders, Wood Preserving, and Cleaning Roof, Patio, Sidewalks.

In newspapers an advertisement will be placed under the "Home Repair" section for "Decks".

There are two major trade associations which serve the Mobile Power Wash Industry. They are "Power Washers of North America" at http://www.pwna.org and International Kitchen Exhaust Cleaning Association at http://www.ikeca.org. These national trade associations provide a lot of business resources for the Power Wash Contract Cleaner on a variety of topics including marketing, technical information, trade shows, and networking. Initially I will join PWNA as it services all segments of the Power Wash Industry.

There is also a lot of marketing and technical information on the internet which is free at Delco Cleaning Systems of Fort Worth Website at http://www.dcs1.com.

Competition

There are 15 companies listed in the yellow pages. Upon doing a survey I found that most of them specialized various markets with 80% of their business being specialized and 20% of their business being all sorts of miscellaneous pressure washing work. The larger the contractor the more specialized was their work.

Calling PWNA I found out that in large metropolitan areas Contract Cleaners generally serve specialized markets and in smaller rural areas the Contract Cleaners generally serve all markets within a 1 to 2 hour drive.

As an owner/operator I will have the advantage of being on all jobs to ensure good customer relations and the quality of my work.

Personnel Required

Initially I will have no employees and I will do all the work. As the business grows I will hire part time then full time employees.

My wife will keep my books on the computer using "Quick Books Pro" software.

The projection is based on us doing our own payroll. Once the business is started the payroll may be handled through a payroll service that will handle all the payroll taxes, workmen's compensation, and health insurance or we may have our CPA do the payroll.

The "Labor" figure in the projections is for my employees and as a sole proprietor my salary is in the "Gross Profit" figure.

Also my wife has offered to help on weekends as needed until I get the business established.

Licenses

In the state of Texas no licenses are required. Some Pressure Washing Services are taxable therefore a sales tax number will be required from the State of Texas.

Federal I.D. number will be obtained for taxes.

Please find attached:

Supporting documents -. Personal

1. Personal Financial Statement

2. Resume

Supporting documents - Business

1. Capital Equipment and Supplies List. The equipment will be purchased from Delco Cleaning Systems of Fort Worth, their bid is attached.

2. Financial Projections for "Delco Mobile Power Wash"

FINANCIAL STATEMENT

Assets

Liabilities

Source of Income:

Contingent Liabilities:

Resume

George M. Smith
2513 Warfield Street
Fort Worth, Texas 76106-7554
Phone: 817-625-4213

Career Objectives

Establish, own and operate a Mobile Power Wash Business in Central Texas.

Experience

Education

Skills

Automotive Mechanic on General Motors Vehicles.
Computer Skills: Microsoft Office Suite, Internet and Quick Books Accounting Software.

References

John Doe, III
746 Walnut Street
Fort Worth, TX 76106
Phone: 817-625-4689

Roger Wash
1425 Water Street
Burleson, TX 76028
Phone: 817-296-5142

Roger Dodger
843 Cedar Lane
Cedarville, TX 76023
Phone: 817-334-2501

Capital Equipment List

Prices as of June 25, 2008

Chemicals Supplies

Financial Projections for Delco Mobile Power Wash

For the latest version of the article go to http://www.dcs1.com/del/busplan.html

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Webmaster: Robert M. Hinderliter of Delco Cleaning Systems of Fort Worth, 2513 Warfield Street, Fort Worth, Texas 76106-7554. Phone: 800-433-2113, Fax: 817-625-2059
email: delco@dcs1.com ; URL: http://www.dcs1.com/del
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