AMERICAN COLLEGE OF TECHNOLOGY

DEPARTMENT OF BUSINESS STUDIES

MASTER OF BUSINESS ADMINISTRATION PROGRAM

Project on Car Wash services

with up-to-date equipment In Addis Ababa City Administration
A Project Proposal Submitted to the Department of Business Studies of
the American College of Technology
as a Partial Fulfillment of the requirement of the Award of Master of
Business Administration
By
Kalid Girma Kebede

Advisor
Yaregal Tilahun. (Asst. Prof.)

January 2022
Addis Ababa, Ethiopia
Contents
 Car Washing Services With Updated Equipment In Addis Ababa

1. Introduction............................................................................................................... 3
1.1. Background of the Project....................................................................................... 3
1.2 Objectives................................................................................................................ 5
1.2.1. General Objective............................................................................................ 5
1.2.2. Specific Objectives:.......................................................................................... 5
1.3. Problem statement................................................................................................. 5
1.4. Rationale of the project.............................................................................. 6
1.5. Scope of the project................................................................................................ 7
1.6. Limitations of the project........................................................................................ 8
Chapter Two:................................................................................................................ 9
2.1 Opportunity study.................................................................................................. 9
2.2 The project Concept and Profile................................................................................ 9
2.2.1 The Purpose of the Project:................................................................................. 9

2.2.2. The Beneficiaries and Stakeholders .............................................................10

2.2.3. The Resource and Institutions...........................................................................10
2.2.4 The alignment of Project into National Plans and Policies.......................................12
2.3. Preliminary Study................................................................................................ 15
Chapter Three............................................................................................................. 16
3. Project Methods and Procedure................................................................................... 16
3.1. Project Design..................................................................................................... 17
3.2. Types of Data...................................................................................................... 17
3.3. Sources of data.................................................................................................... 17
3.4. Data Collection Methods and Tools.........................................................................17
3.5. Population of Study.............................................................................................. 17
3.6. Sampling Design.................................................................................................. 17
3.7. Sampling Size..................................................................................................... 17
3.8. Sampling Methods............................................................................................... 17
3.9. Data Analysis Methods and Tools...........................................................................17
3.10. Schedule........................................................................................................... 17
3.11. Resource Budget................................................................................................ 17
References.................................................................................................................. 17

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1. Introduction

1.1. Background of the Project

Car wash technology has undergone significant evolution over the past century. While fully
automated car washes are now a common sight, such advancements were unimaginable just a
hundred years ago. The inception of the car wash industry took place in 1914 with the opening of
the “Automated Laundry” in Detroit, where cars were manually pushed through a tunnel while
workers soaped, rinsed, and dried them.(Reference) The 1950s and 1960s marked a rise in car
wash establishments due to the introduction of automated technologies. Innovations such as
recirculating water systems, soft cloth friction washing, and wraparound brushes emerged during
this period, leading to substantial improvements over the fully manual car washes of the
1910s(Reference)).
In Ethiopia, however, specific historical records regarding the emergence of car washing services
as a business are deficient. Recent surveys conducted in Addis Ababa reveals that automated car
washing facilities are either extremely limited or nonexistent. The word ‘limited ‘implies that the
car washing business in the city is constrained due to the technology required for the service and
the knowledge gap among workers.

Currently the city is experiencing rapid urbanization and economic growth, leading to an
increasing number of vehicles on the roads. The rise in car ownership, coupled with a growing
middle-class and expanding business sectors, has heightened the demand for professional and
efficient car washing services. However, many existing cars wash facilities in the city still rely
on outdated, a heavy reliance on labor, manual cleaning methods, which are time-consuming,
water-inefficient, and less effective in maintaining vehicle quality. They usually involve a
manual process where workers clean vehicles using various techniques, including hand washing,
scrubbing, rinsing with hoses, and towel drying. Moreover, the quality of service can vary
dramatically depending on the individual performing the wash.

Furthermore, the working environment is not adequate and clean. Many of these services operate
on the street and are often carried out by young people seeking daily income. Thus, there is a

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high risk of equipment damage and personnel harm as they have no personal protective
equipment (PPE).

Conversely, the rising number of vehicles in Addis Ababa has increased demand for car washing
services. Despite a growing number of cars owned by individuals, businesses, and organizations,
there is a notable lack of quantity and quality in available car wash services. Our project aims to
transform car washing facilities by implementing modern equipment and environmentally
friendly practices.

Further our project focuses on bridging the gap created by traditional car washing services that
struggle to meet the high demand in the city and establish advanced technology and an
innovative approach to deliver a superior car washing experience that ensures customer
satisfaction and loyalty.
Moreover, our initiative targets individuals who prioritize quality in their vehicle's appearance
and those who value their time, aiming to offer top-tier washing services for discerning
customers.

1.2 Objectives

1.2.1. General Objective

To establish a modern and efficient car washing facility while emphasizing customer Satisfaction
and eco-conscious practices through prompt and quality service delivery.
1.2.2. Specific Objectives:

 To set up environmentally friendly cleaning tools to ensure quick and thorough car
cleaning services.
 To build a loyal customer base by providing competitive rates, outstanding service, and
tailored car care options, targeting an 85% customer retention rate within the first year.
 Advocate for environmental sustainability by integrating water-efficient technologies and
green cleaning products, ensuring minimal water waste and proper disposal of waste
materials.
 Generate local job opportunities by hiring and training proficient staff to manage the car
wash services, prioritizing ongoing professional development and training.

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1.3. Problem statement

In today's fast-paced world, the need for convenience and efficiency is reflected in every aspect
of our lives, including car washing services. However, you must drive some distance to get to the
services. That means customers must travel to the car washing site, which is time-consuming and
inconvenient, especially during peak hours when waiting times are long. This is even worse as it
might even demand another waiting time due to lack of online bookings. Furthermore, most of
the car wash services utilize outdated methods, which resulted in inefficient processes leading to
long wait times and customer dissatisfaction.

This traditional car washing service has another very important issue that needs to be addressed,
as customers express concerns about their vehicles' safety, as theft and looting by strangers
occasionally occur. Since there is no guaranty of their car or its part will not be stolen. Here in
Addis Ababa water availability is big deal as traditional car washing is often inefficient in the
way it utilizes water.Although these methods have been the standard for many years, they exhibit
key characteristics: a heavy reliance on labor, time inefficiency, and a lack of precision offered
by modern machines.

Meanwhile, traditional car wash methods often result in water wastage which is even further a
big concern for the residents of Addis Ababa who suffer from scarcity of water. Often, cleaning
chemicals and detergents disposed of those car washing facilities raise concerns about
environmental sustainability. In addition to this, their suboptimal cleaning results due to
improper manual techniques can lead to swirl marks that may scratch vehicle surfaces. Many car
wash Facilities utilize outdated methods. Therefore, the lack of modern car washing facilities
limits access to efficient and environmentally friendly car care services for residents and
businesses.

1.4. Rationale of the project

Most Car washing owners establish their car washing services without even having a proper
business plan and examining their profitability. Obviously,

Waiting times and travel requirements significantly impact customer satisfaction at traditional
car wash services. Moreover, long waiting times can lead to frustration and dissatisfaction, as
customers typically expect quick service; dissatisfaction increases when waiting exceeds 20-25

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minutes for full-service washes. Additionally, traveling to washing facilities can be inconvenient,
particularly for busy individuals. This may be even worse in cities like Addis with high traffic
jams, particularly during the working days of the week, which limits alternative options to get
the services. This combination of factors may deter sustainable business, as customers often seek
more efficient alternatives, such as mobile or street labor car wash services that offer
convenience and quicker service.

The major competitors of our projected business are those who give the car wash service in the
gas stations and those youngsters who raise money for their living by cleaning cars with running
water. However, those competitors are not of a good standard and take a lot of time, one and half
hours per car wash, and aim to meet the needs of the price-conscious individuals who are
choosing the service so that they cannot clean their car by themselves.

Addis Car Wash Service on the other hand targets the quality-conscious individuals who value
their car to make it look good and the time-conscious individuals who have given value to their
time. When we look at the car wash service in Addis Ababa city, they are given an auxiliary to
their main business to gas stations although all stations don’t constitute the service. Because of
that reason a station can only serve a maximum of six cars a day per washing hole and almost all
the stations have not more than two washing holes which doesn’t fulfill the demand. Our
business aims to fill the gap by giving the car wash service as an independent (Specialized)
Service which will have five washing holes serving fifty cars per day with a fair price.

Moreover, the increasing number of vehicles in Addis Ababa has increased demand for car
washing services.

Therefore, our project is exclusively designed to revolutionize or transform the industry and
become the best in class.

1.5. Scope of the project

Here, we will define the project's specific boundaries in terms of what and how they are achieved.
To do this we are going to kickstart the job with market analysis & planning. Before we go deep
in to project implementation we are going to analyze the existing car wash market in Addis
Ababa. This includes identifying competitors, their pricing strategies, and target markets (for

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instance personal vehicles, taxis, businesses), and their service offerings. In addition to this, we
will also determine the potential demand and market size for a new, high-quality car wash.
Further, the project will clearly define the target customer segments that the business will serve.
Similarly, the creation of a business development plan, location selection, and legal and
regulatory compliance requirements will be taken into account.

* Business Plan Development: Create a comprehensive business plan including executive

summary, company description, market analysis, organization and management, service or
product line, marketing and sales strategy, funding request, financial projections, and appendices.

* Location Selection: Identify a suitable location in Addis Ababa considering factors like
accessibility, visibility, proximity to target markets, water availability, and waste disposal
regulations. Consider traffic patterns and potential for expansion.

* Legal and Regulatory Compliance: Research and comply with all necessary licenses, permits,
and regulations related to business operation, water usage, waste disposal, and employment in
Addis Ababa.

Apart from market analysis and planning, the other important parts of the project's discrete work
elements are acquisition of equipment and infrastructure development. Equipment acquisition
involves purchase of modern and efficient car washing equipment including high-pressure water
jets or washers, automated car wash systems depending on the investment scale, vacuum
cleaners, detailing equipment (e.g., polishers, buffers), water recycling systems and chemical
dispensing systems. The other is infrastructure development that involves building or modifying
a suitable facility. This could range from a simple open-air wash bay to a more sophisticated
indoor facility with multiple bays and waiting areas.

Once we finalize the above work our major attention is on operations and management issues
like Staffing, service offering, supply chain management, quality control and waste management.

Another important part of work element for our project is marketing and sales activities that are
very crucial in achieving our project objectives. This comprises developing of a strong brand
identity and marketing strategy to reach the target market. This could involve online marketing
(social media, website), print advertising, local partnerships, and promotional offers. Moreover,

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determining competitive and profitable pricing for various services along with implementing a
system for managing customer information and interactions (CRM-Customer Relationship
Management) are very important.

Finally, financial management that contain detail budgeting and cost control measures, funding
sources that might secured through loans, investment, or personal capital and financial
reporting(track income, expenses and profitability) are the comprehensive scope provides a
strong foundation for our success car wash business in Addis Ababa.

1.6. Limitations of the project

The major shortcoming of this project is the lack of data or information related to a similar
project.

During assessment and field survey, the main problem that was encountered for the researcher
lack of adequate information sources in existing car wash services. In view of employees and the
owners lack of willingness/interest to give information about their car washing services in order
to keep the image of their services. Finally, the budget, it is also worth mentioning that lack of
sufficient amount of money and time had an objectionable upshot on the project. These are the
foremost limitations of the project that the writer was came across in this specific project.

Chapter Two:

2.1 Opportunity study

The Government's initiative to beautify Addis Ababa City, Current law that bans car washing
services on the street, green initiative, Shortage of the advanced car washing facilities, High
demand or the market need for car washing services. Presence of cheap human resources,

2.2 The project Concept and Profile

2.2.1 The Purpose of the Project:

This project aims to establish a high-quality car washing service in Addis Ababa that is equipped
with the latest technology and environmentally friendly practices. Recognizing the growing

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demand for convenient and professional car care services in the city, this project addresses
several key issues:

One of the issues the project will address is the issue of shortage of professional car washing
facilities. Many existing car washes in Addis Ababa lack the necessary equipment and expertise
to provide thorough and efficient cleaning. On the other hand, environmental concerns are the
primary focus that the project needs to consider while it serves the customers. Traditional car
washing methods often involve the use of harsh chemicals that can pollute water sources.
Therefore, the project will prioritize eco-friendly cleaning solutions and water conservation
techniques.

Besides, customer convenience appears very crucial nowadays as it serves as a competitive

advantage over their counterparts. On top of that, the service will offer flexible scheduling
options, convenient locations, and a range of services to cater to diverse customer needs,
including interior detailing, waxing, and paint correction.

Furthermore, the establishment of this business will create employment opportunities for local
residents, contributing to the economic growth of the city by providing a superior car washing
experience both effective and environmentally responsible business projects that aim to meet the
evolving needs of the discerning car owners in Addis Ababa.

2.2.2. The Beneficiaries and Stakeholders

The primary beneficiaries are individuals and businesses that own vehicles. These car owners'
customers will directly benefit from convenient access to high-quality, efficient car washing
services. The employees who benefited from the job opportunities created by the project,
particularly those with skills in car washing, maintenance, and customer service. Also, the
project will contribute to the local economy by generating revenue, creating jobs, and potentially
stimulating related businesses such as detailing supply stores.

Regarding stakeholders, investors that provide financial backing for the project, and property
owners if the project involves leasing a property the landlords are key depending on the nature of
our business reliance on the rental houses and other property needed in our project. Likewise,
Suppliers who have businesses that provide equipment, cleaning supplies, and other necessary

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materials are also a good example of our stakeholders for our cases. Other than this, Government
agencies particularly those responsible for business licensing, environmental regulations, and
water usage as well as community members or nearby residents who have concerns and interests
related to projects location, noise levels and potential impact on environment are important
stakeholders that we should consider to closely monitor and communicate throughout our project
implementation period. The other stakeholders that influence our intended project success or
failure is the competitor’s specifically existing car wash businesses in Addis Ababa who may
affect or affected by the introduction of new, potentially more advanced service. Generally
though all our stakeholders have their own importance the level of influence are vary depending
on our project's scope, location, and target market.

2.2.3. The Resource and Institutions

Obviously, without the resource it is difficult to implement any project even though we do have
quite many good project ideas. Hence, availability of resources are vital to implement and
change the best project ideas into practice. As for our purposes, to change the car washing
services with advanced equipment project into practice the following resources are very
important.

I. Financial Resources: for financial resources the below are my main source of resources.

 Personal Savings: My own capital or savings can be a significant source of funding.

 Loans: Explore options like bank loans, microfinance loans, or loans from family and
friends.
 Investors: Seek out potential investors who are interested in my business idea.
 Grants: assess government or non-profit grants that support small businesses.

II. Human Resources:

 Self: My dedication, skills, and experience.

 Employees: Hiring of qualified staff for washing, detailing, and customer service.
 Contractors: Consider hiring specialized contractors for certain services like upholstery
cleaning or paint correction.

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III. Physical Resources:

 Location: a suitable location with good visibility and accessibility.

 Equipment: a high-quality washing equipment, including pressure washers, foam
cannons, water reclamation systems, and vacuums.
 Supplies: Stock up on cleaning solutions, waxes, polishes, and other necessary supplies.

IV. Technological Resources:

 Point-of-Sale (POS) System: For efficient order processing and payment management.
 Customer Relationship Management (CRM) Software: To track customer information
and preferences.
 Website or Social Media Presence: To reach potential customers and build brand
awareness.
 Online Booking System: To allow customers to schedule appointments conveniently.

V. Other Resources:

 Suppliers: Establish relationships with reliable suppliers for equipment, supplies, and
chemicals.
 Network: Connect with other entrepreneurs, industry professionals, and potential clients.
 Market Research: Conduct thorough market research to understand customer needs and
competitive landscape.
 Legal and Regulatory Compliance: Ensure compliance with all relevant laws and
regulations.

VI. Important Considerations:

 Budget: Create a detailed budget to track expenses and ensure financial viability.
 Marketing and Sales: Develop a strong marketing strategy to attract customers.
 Customer Service: Provide excellent customer service to build loyalty and positive
reviews.
 Competition: Analyze the competitive landscape and differentiate your services.

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 Sustainability: Consider environmentally friendly practices and sustainable operations.

After carefully considering these resources and factors, we can increase our chances of success
in establishing a thriving car washing business in Addis Ababa.

2.2.4 The alignment of Project into National Plans and Policies

The project is potentially align with several national plans and policies in Ethiopia that contribute
to economic growth, job creation, environmental sustainability, and technological advancement.
For instance, the project can contribute to governments GTP's objective of promoting private
sector-led economic growth by creating new businesses and employment opportunities in the car
washing industry.

Moreover, the use of advanced equipment can enhance the efficiency and quality of car washing
services, which align with GTP's goal of modernizing the service sector. Similarly, this project
complements national water sector strategies that commit to water conservation and waste water
treatment to minimize environmental effect by focusing on sustainable water management. It
also chains with Ethiopia’s environmental policy that encourages the use of eco-friendly car
washing facilities to help pollution reduction and protect the environment. Generally, the project
can contribute to improving the overall quality of services in the tourism sector by providing
clean and well-maintained vehicles for tourists and locals.

Specific Alignment Strategies:

 Technology Adoption: Encourage the use of water-efficient equipment, eco-friendly

cleaning products, and wastewater treatment technologies.
 Skill Development: Provide training programs for car wash operators on the use of
advanced equipment and environmentally friendly practices.
 Policy Support: Advocate for supportive policies, such as tax incentives or subsidies, to
encourage investment in advanced car washing technologies.
 Public Awareness: Raise awareness among car wash operators and the public about the
benefits of using advanced equipment and sustainable practices.

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Additional Considerations:

 Accessibility: Ensure that the project benefits all segments of the population, including
low-income communities.
 Local Content: Promote the use of locally produced equipment and materials whenever
possible.
 Monitoring and Evaluation: Establish a robust monitoring and evaluation framework to
track the project's progress and impact.

By carefully aligning the car washing services project with these national plans and policies,
Ethiopia can leverage this initiative to drive economic growth, create jobs, protect the
environment, and enhance the quality of life for its citizens.

2.2.5 Project Impact

Positive Impacts:

 Job Creation: The project would create employment opportunities for both skilled and
unskilled workers, contributing to economic growth and reducing unemployment 1 rates.
 Improved Vehicle Aesthetics: Modern car washing equipment ensures a thorough and
efficient cleaning process, leaving vehicles looking their best.
 Convenience: Offering up-to-date services in a busy city like Addis Ababa provides
convenience for car owners, saving them time and effort.
 Environmental Benefits: Some modern car washing techniques use less water and eco-
friendly products, minimizing environmental impact.
 Potential for Expansion: A successful project could lead to further investment and
expansion of the car washing industry in the city.

Negative Impacts:

 Competition: The introduction of modern services could pose a threat to traditional,

informal car wash businesses, potentially leading to job losses.
 Environmental Concerns: While some modern methods are eco-friendly, others may
still use chemicals that could harm the environment if not properly disposed of.
 Water Usage: Even with modern techniques, car washing still requires significant water
consumption, which could be a concern in a city facing water scarcity issues.
 Traffic Congestion: Increased car washing services could potentially lead to traffic
congestion in certain areas if not properly managed.
 Potential for Price Increases: The introduction of modern equipment and services could
lead to higher prices for car washing, making it less affordable for some customers.

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Overall, the project of introducing car washing services with up-to-date equipment in Addis
Ababa has the potential to bring both positive and negative impacts. A careful assessment of
these factors and implementation of appropriate mitigation measures is crucial to ensure the
project's success and sustainability.

Project Risk:
Project Overview:

This project involves establishing a car washing service in Addis Ababa, Ethiopia, equipped with
modern, high-quality equipment. The goal is to provide efficient, high-quality car washing
services to meet the growing demand in the city.

Potential Risks:

1. Economic Risks:
o Currency Fluctuations: The Ethiopian Birr's volatility against major currencies
can impact the cost of imported equipment and supplies.
o Competition: The existing market may be saturated, with established competitors
offering similar services at potentially lower prices.
o Economic Downturn: A decline in the economy could lead to reduced consumer
spending, affecting demand for car washing services.
2. Operational Risks:
o Equipment Malfunction: The reliance on modern equipment increases the risk
of breakdowns and maintenance issues, potentially disrupting operations.
o Water Availability and Quality: Inconsistent water supply or poor water quality
can hinder operations and affect the quality of the car wash.
o Staff Training and Retention: Finding and retaining skilled staff with expertise
in using modern equipment can be challenging.
3. Regulatory Risks:
o Licensing and Permits: Obtaining necessary licenses and permits for operating a
car wash business can be complex and time-consuming.
o Environmental Regulations: Compliance with environmental regulations
regarding water usage and waste disposal can be costly and challenging.
o Changes in Regulations: Unexpected changes in regulations can impact the
business's operations and profitability.
4. Market Risks:
o Changing Consumer Preferences: Shifts in consumer preferences towards
specific services or technologies can render the initial investment obsolete.
o Seasonal Fluctuations: Demand for car washing services may fluctuate
seasonally, impacting revenue and profitability.
o Technological Advancements: Rapid advancements in car washing technology
can quickly make the initial investment outdated.

Risk Mitigation Strategies:

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 Currency Hedging: Implement strategies to mitigate the impact of currency fluctuations,

such as forward contracts or currency options.
 Competitive Analysis: Conduct thorough market research to identify competitive
advantages and differentiate the business.
 Equipment Maintenance: Establish a robust maintenance plan to minimize equipment
downtime and ensure optimal performance.
 Water Management: Implement water conservation measures and explore alternative
water sources to mitigate water supply and quality issues.
 Staff Training: Invest in comprehensive staff training to enhance skills and ensure
efficient operations.
 Regulatory Compliance: Seek legal and professional advice to ensure compliance with
all relevant regulations.
 Market Research: Continuously monitor market trends and consumer preferences to
adapt services and offerings.
 Technology Upgrades: Stay abreast of technological advancements and consider
incorporating new technologies to maintain a competitive edge.

By carefully considering these risks and implementing appropriate mitigation strategies, the
project can be more likely to succeed in the dynamic market of Addis Ababa.

2.3. Preliminary Study

Briefly describe structure and objectives of a project, nature, and size of demand, need to be
satisfied, foreseen beneficiaries, availability of the most important inputs, approximate
Investment & operational cost, expected revenues & other benefits, rough estimates of financial
and economic returns, Major factors that affect the project, further information to be acquired
through special study/survey.

Chapter Three

3. Project Methods and Procedure

Project Procedure or the methodology: indicate the framework/approach to be used to prepare a
project/shows how you propose to carry out your project such as situation analysis, gap analysis,
data collection, and data analysis (you may use the project life cycle approach, problem tree,
objective tree)

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3.1. Project Design

3.2. Types of Data

3.3. Sources of data

3.4. Data Collection Methods and Tools

3.5. Population of Study

3.6. Sampling Design

3.7. Sampling Size

3.8. Sampling Methods

3.9. Data Analysis Methods and Tools

3.10. Schedule

3.11. Resource Budget

References

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