How to start a carwash: Six questions to ask about raising capital, part 2 - Professional Carwashing & Detailing

How to start a carwash: Six questions to ask about raising capital, part 2

Navigate the specifics of raising money to start your own company.

Michael Lewis, blogger at Money Crashers, explains more questions entrepreneurs should ask themselves when searching for start-up cash for their new carwashes.

Who might be interested in investing in my company?

Family members may be less discriminating than investors, but their contributions can lead to strained relationships, explains Lewis. Several other funding sources exist, however.

  • VCs and Angels funding are rare — Less than one percent of companies receive funds from venture capitalists (VCs). Few companies can make it through the stringent process.
  • Women-specific struggles — Women often find difficulty because they don’t belong to the “good old boys’ network,” notes Lewis. Many men may often not take them seriously. Websites like provide resources to female-owned businesses.
  • Crowdfunding — Individuals with incomes less than $100,000 can contribute up to $1 million to small companies through the Jumpstart Our Business Startups Act of 2012 (JOBS).

What are my legal responsibilities to potential investors?

The U.S. Securities Act of 1933 and the Securities Exchange Act of 1934 detail businesses’ responsibilities to their investors. Companies should provide investors understandable factual information and forms, shares Lewis. Legal advice could also come in handy, he adds. Hiring an attorney could help avoid fraud charges, confusion or other legal problems.

How do I negotiate a win-win agreement?

Investors and the company must agree to accomplish their respective goals, states Lewis. At minimum, negotiations will include:

  • Amount of capital invested
  • Timing of the investment
  • Return on investment
  • Timing of the return to the investor
  • Certainty of the return
  • Control.

Entrepreneurs can benefit from hiring a professional to assist with this process. Persistence in the face of rejection is also critical when raising startup money.

Click here for more coverage on this topic.

You May Also Like

Politeness in peril

Tactical tips for constructive conversations in a world struggling with listening.

As our society becomes increasingly polarized and divided, cultural cordiality is in crisis. Without the learned ability for communicating effectively and respectfully with those whose opinions differ from our own, societal strife will continue to spur avoidable discord. This as digital media consumption in the modern world is severely exacerbating the issue.

Mentoring through a changing workforce 

How carwash operators and detailers can overcome a changing workforce with mentoring.

Get the most from your RO membranes

Maintain these critical components to improve performance and lower cost of ownership.

New innovations on display

Operators find virtual solutions at 2023 The Car Wash Show™.

Keep your cool on the job

As temperatures surge, use innovative portable air coolers to make sure productivity doesn’t dip.

Other Posts

Separating from the crowd

Use these strategies to thrive in saturated markets.

The ultimate Guide to Buying a Carwash

If you’re looking to get into the business, here’s what you need to know.

Listen up

Expert tips for how business leaders can readily address the root causes of stress and burnout and ultimately facilitate a culture of caring.

Fixing your future with the SBA 504 Refinance Program

Carwash operators can leverage this program to save big money.