Overview
A break even analysis shows how many washes per day or per month a new car wash needs to cover its costs. It is one of the simplest tools for testing whether a site, pricing plan, and cost structure are realistic before committing to construction or equipment purchases.
Start with fixed costs
Fixed costs are expenses that stay relatively consistent regardless of volume. For a new car wash, include items such as rent or debt service, insurance, base utilities, software, management costs, and any contracted services that do not scale down in slower months.
Estimate variable cost per wash
Variable costs increase with each wash. Typical categories include chemicals, incremental utilities tied to usage, credit card processing, and certain wear items. A conservative per-wash estimate prevents the break even point from looking artificially low.
Build realistic revenue per wash assumptions
Average revenue per wash depends on package mix, price points, and how many customers choose higher tiers. Use realistic mix assumptions and avoid modeling the best-case package distribution as the baseline.
Calculate break even volume
Break even volume is the level where contribution margin covers fixed costs. If you plan to rely on memberships, model a membership base that is supportable by the trade area and include churn assumptions.
Stress test the model
- Lower volume case to reflect slower weather periods and ramp-up time
- Higher cost case for utilities, repairs, and labor variability
- Delayed ramp scenario where marketing and awareness take longer
Bottom line
Break even analysis is most useful when it is conservative and easy to understand. If the wash breaks even only under aggressive assumptions, the plan likely needs adjustments to pricing, costs, site design, or capital structure.