Startup Consulting Case Study - Car Washing Business

Posted on 28 Mar, 2018



Four young and energetic, out of the college boys found us on Google - when they were looking for a "startup consultant in Ahmedabad"! It was a first that someone found us through online search.

As in most cases, being app buffs - they had a quick sketch of their concept on paper. A list of features they want have and some mobile screen sketches. The idea was to provide At Home Car Washing Service on subscription basis. Wow! We love the way new generation can re-imagine the traditional services, provided in unorganized way. These ideas also make us feel excited to work up on. 


Understanding their business and goals - we were against the idea of building an app. But the clients were too keen to have an app and finally they opted out against our advice and outsourced it to someone else. We continued to understand the business, break it down and started planning the six month strategy.

Planning
Whenever we are approached with a new business, which is being started from scratch - we break it down into small succession instead of making big plan. We focus on core service/offering and plan for the prototype. What all is required for the core service to hit the market? Answer to this, is first plan.

Prototyping
However, the apps were getting developed - what we required to launch the services was to have a brand name, a brochure which explains the services clearly - as it is the new format for the customers and a phone number to receive orders. We advised the team to talk to friends and families that you have started this business and offer them one-off complimentary service instead of offering subscription and collect the feedback. Within a week, MINT MY CAR was ready to deliver the car washing at homes and offices. Bingo! 


The core service was designed by the clients was laid out in a brochure. There was a phone number to call and as designed the message marketing was started in the close groups.

First Challenge
Car Washing at home - is a business of man power and that came out as one of the first challenges. There were a couple of models where clients could hire full-time employees or hire part time workers as the initial service was to be delivered between 5am to 10am, when the cars are parked in the parking lots of the customers, and exactly when they want them to be cleaned. A contractor assured 8-10 workers, who will take the schedule, addresses, move to the locations and clean the cars every morning. To ensure if the washes are delivered and on time - one of the clients started supervising - checking on random vehicles if they were cleaned and cleaned properly. This entire arrangement was challenging and maintaining the timings and quality was a huge challenge.

Service Matrix & Unit Cost
For first timers, the biggest need of consulting is to execute the idea efficiently to make profits. Mint My Car has a staggering sales of more than 75,000 INR within first few weeks. The app they wanted to build was no more important and they were attracted to increase the service number. Here comes the catch! As per the clients - the unit cost (cost to wash one car) was 25 rupees. With the equipment, tools, materials they were using and list of things they were providing under one wash (e.g. interior cleaning, placing tissue box etc.) the unit cost was Rs. 64 or more. Bam! Suddenly the rosy business numbers are not exciting.

Service matrix was redesigned to optimize the offering to match the essential needs of the customers and also to bring down the cost which was really high against the traditional way of procuring car washing services. Unit cost was brought down to Rs. 20 and the subscription pricing was revised accordingly.

Cost & Revenue Projections
As one of our standard and the most effective contribution through our startup consulting services is to create their first financials. Most teams do not have the financial background or the know-how on how to go about the presentable sheets of projections to the investors or to the boards. We made projected financials for the business for 3 years and created an anticipated cash flow and investment plan.

CRASH!
This startup which took off really well and was overcoming the challenges with our help in service design, marketing strategy, business planning - CRASHED! It was the classic case of lack of clarity within team members in terms of roles, responsibilities and commitment. A couple of them succumbed to the family pressure and others had different plans than pursuing a business like this. In most cases, a startup fails due to the team. If the team has the clarity and sticks together with the alignment in goals - sooner or later they make a business!

If you are in an early stage of your startup with similar challenges, do get in touch with us on contact@stimulusco.com

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