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How to Start a Pressure Washing Business in 2022?
Written by: Parth Parth
Table of Contents
A pressure washing business could be an incredibly lucrative opportunity if you find the right area to start and establish the correct customer base. The startup costs in the business are low and the profit margins can be very high, but that is not true for everyone otherwise everyone would have a pressure washing business. In this article, we will explore the business and hopefully give you an idea of where to start.
Before starting a pressure washing business, try it out yourself
If you start a pressure washing business and commit to it part-time or even full-time, you should know beforehand how pressure washing works and have some experience with it. Try out pressure washing for yourself so you have an idea of whether or not it is something you want to do for a big chunk of your upcoming life if not all of it – you are going to be investing significant money into it.
Doing so will also help you understand how pressure washers work and how to use them. To do so you can rent machines from places like Home Depot and practice on your or your friends’ properties. Alternatively, you could go to an existing business in town and work for them for free in exchange for learning how to pressure wash.
What are the costs of starting a Pressure Washing Business?
Unlike a small business that might operate in the technology or digital field, you are going to have a reasonable startup cost. Some of your main upfront expenditures are:
- Power washing gear like a pressure washer, surface cleaner, nozzles, chemicals, and a trailer or equivalent.
- Insurance costs, business permits, and contractor license costs.
- Cost to acquire your first few customers (advertisement, pamphlets, flyers, etc.)
- Cost of transportation to get to customers’ homes (truck, van, etc.)
There are also going to be ongoing costs like maintaining and replacing your equipment and fuel costs.
In our estimate, the minimum prices you are going to have to encounter for things are listed below:
- Pressure washing gear: $1,500
- Transport costs (a used van or truck): $5,000
- Insurance, permits, and licenses, etc: $500 upfront and $60 per month (both vary depending on your location)
- Startup advertising and initial customer cost: $250 for tons of flyers and printing
- Approximate total upfront cost: $7,250
It is preferred that you buy a van or a truck that is in good condition and have your business advertised on it. Using a vehicle in poor condition will lead to negative publicity – no one wants to get their driveway washed by a beat-down truck that has black smoke coming out of it. Having a decal of your business on your vehicle is going to advertise your service as you drive throughout the city and is going to generate more customers for your business.
How much can you earn from a Pressure Washing Business?
We can provide rough estimates of what you can charge per pressure washing, but you should build your own financials and project your breakeven point. Of course, the exact prices you charge are up to you to decide.
- The exterior of a home: $100-$300. This can be even bigger depending on how much deposit there is and how big the house exterior is
- Driveway: $80-$200
- Deck or patio: $250-$500
- Vehicle cleaning: $50-$200
What paperwork do you need to Start a Pressure Washing Business in 2022?
As with any business, you will need some paperwork to establish a Pressure Washing Business. The following is an indicative list of what are things you might need to do before you start your business. Again, check with a lawyer in your area to find out if you’re all set to start.
- Business License: Registering your business with the state, county, city, etc.
- Bond: You may need to pay a bond before you can get a license to operate a pressure washing business in your area.
- Sales Tax Registration: Register your business with the Internal Revenue Service (IRS) for tax purposes.
- Contractor Permit: You may need specific permits for pressure washing in your area of operation. Be sure to contact the local licensing office for details.
- Environmental Permit: Some states, cities, or counties require an environmental permit because you are going to be mostly discharging water and cleaning chemicals into storm drains.
Insurance
It is very necessary to have insurance when you are pressure washing. You do not want yourself to be liable for any damages you cause – or at least not pay for all of it. There are three types of insurance you need to worry about:
- Liability insurance covers any damage you might incur while pressure cleaning.
- Workers’ compensation to cover for injuries to you or others while on the job.
- Equipment insurance to cover damage on equipment or if they are stolen.
We also recommend that you establish an LLC and do all of your business through it. If you do not, you can be sued for any damages caused and your property can be used to cover any damages you cannot pay. If you’re working through or for an LLC, only the LLC can be sued and only its property can be used to cover the damage.
This is not legal advice – none of it is – definitely talk to a lawyer about all of these topics before starting a Pressure Washing Business.
Pros and Cons of operating a Pressure Washing Business
As with any business, there are pros and cons to a Pressure Washing Business. Let’s look at the pros first:
- Low Startup Costs: Theoretically, you can start for under $1,000 by buying used equipment and starting out small before earning the money from the business to buy better equipment.
- High Profit Margins: In the short term, the Pressure Washing Business has virtually a very small cost of operation in the short term. As such, the only costs are chemicals and fuel. This leaves you with a comfortable profit margin.
Let’s look at the cons now:
- It’s Manual Labor: Pressure washing is a manual job where you’ll be climbing ladders and moving around to make sure you hit all the spots. There is also the running of the equipment and moving that around as well and the risks associated with that.
- Liability: When you’re blasting water around someone’s property, there’s the natural potential for things to go wrong. You’ll want to get an insurance policy in place before you do your first paid job. This is an additional cost (As we have mentioned above)
- Seasonality: There is a huge seasonality aspect in the pressure washing business. If you live in a place that gets very cold temperatures during the winter months, you will find that this is not an all-year-round business. Most people will do home improvement projects and cleanup in the spring and summer – those will be prime times that people will be looking for help.
- Most Jobs Are One-Off: How often might people really get their houses or driveways pressure washed? Maybe once every few years. In this business, most jobs are going to be one-off. While one job can lead to others in the neighborhood, generating recurring revenue is difficult. You’ll constantly be on the hunt for new clients.
Want to franchise a Pressure Washing Business instead?
If you do not want to set everything up yourself and be a franchisee under a company, you can do that too. Let’s look at a franchise, Men In Kilts.
Men In Kilts is a Boston, MA based franchise that provides home and commercial cleaning services. Some of its offerings include Window cleaning, pressure washing, gutter cleaning, and house washing. Men In Kilts started offering franchises in 2010 and as of 2021, has 10 franchised locations. It is led by the chairman of the board – Ervin Cash, Vice President, and Manager – Caroline Peck, Vice President, Secretary, and Manager – Stephen Rice, and Chief Executive Officer – Hagan Kappler.
The initial Men In Kilts Franchise Fee is $38,000. You have to pay this upfront fee when opening a Men In Kilts franchise.
The company may offer to a first-time franchisee, who is not a franchisee (or the owner of a franchisee) of a brand owned by any of its franchisor affiliates, the option of waiving the Initial Franchise Fee in exchange for an increase to the Continuing Royalty rate by an additional 1.5% of Gross Consumer Sales (example a 4% royalty will increase to 5.5%) for 10 years (the Initial 5-year term and the first 5-year renewal term, if renewed).
If you are a conversion franchise and your sales volume for the six months preceding conversion exceeds $25,000, then you will sign the Franchise Agreement and the Conversion Franchise Addendum and they will waive the Initial Franchise Fee.
The estimated total investment necessary to begin the operation of a Men In Kilts Franchise ranges from $157,290 – $191,950. The following costs are part of the upfront costs included in the initial investment for a Men In Kilts. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Men In Kilts franchise in 2022.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $38,00 |
| Travel and Living Expenses while Training | $2,000 – $4,500 |
| Miscellaneous Opening Costs | $6,160 – $8,850 |
| Insurance Costs | $2,000 – $12,000 |
| Vehicle, Branding, Equipment, Supplies | $70,555 to $72,000 |
| Initial Printing Materials | $1,300 |
| Advertising – Initial 3 Months | $16,000 |
| Real Estate | $1,275 – $9,300 |
| Additional Funds – 3 Months | $20,000 – $30,000 |
| Total | $157,290 – $191,950 |
There are also continuing costs to a Men In Kilts Franchise. Royalty: The following percentages are based on your monthly Gross Consumer Sales: $0 – $25,000 8%, $25,000.01 – $50,000 7%, $50,000.01 – $100,000 6%, over $100,000 5% – or the Minimum Royalty, whichever is greater. Brand Fund Fee: Greater of 2% of your Gross Consumer Sales or 30% of the Minimum Royalty. The minimum royalty current is $500 for the first 35 months and $1,000 thereafter.
The median Men In Kilts franchise made $100,304 in revenue for the year. While individual profit margins are going to differ. We estimate profit margins between 30% and 50% for Pressure Washing franchise businesses. As such, it can take between 3.5 and 5 years for you to recover your initial investment. Remember that if you see more business, you might recover your investment sooner. At an average profit margin of 40%, it will take around 4 years for you to recover your initial investment. You may not get a 40% profit margin which would elongate getting a return on your investment.
Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Cleaning stores; the extent of market penetration and brand awareness that Men In Kilts stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
To assign a valuation multiple for Men In Kilts franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
When you go to sell a Men In Kilts franchise based on the median multiple of .68 and net sales in 2021 of $100,304, it would sell for $68,206. This is significantly lower than the midpoint investment of $174,620.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
Men In Kilts is a good option if you want to franchise a cleaning business, but it will obviously take you longer to make your initial investment back.
Want to buy an existing Pressure Washing business?
You can also buy an existing Pressure Washing business if you want to. You will benefit from an established customer base that has been telling other people about your business for a while. The only downside is that because of the niche nature of this business, there might not be a lot of them in your area to buy from.
Highly Profitable 5 star Pressure/Soft Washing Business
| Reno, NV (Washoe Country) |
|---|
| Asking price: | $496,000 | Cash Flow: | $209,853 |
| Gross Revenue: | $327,170 | Inventory | N/A |
| EBITDA | N/A | Established | 2016 |
| FF&E | $0 |
Very Profitable Commercial Pressure Washing Company
| San Diego Country, CA |
|---|
| Asking price: | $749,000 | Cash Flow: | $416,089 |
| Gross Revenue: | $633,267 | Inventory | N/A |
| EBITDA | N/A | Established | N/A |
| FF&E | $0 |
Conclusion
A Pressure Washing Business can be a lucrative opportunity if you’re looking to get into a business that will require manual work and have a lot of seasonality but a high profit margin. If you are able to scale and expand your business to be a multi-person operation, you can really start to see the profits coming in.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and franchises in the Cleaning and Maintenance Industry.
