No two state or local business registration requirements or city/county license regulations are identical. But, the overarching guideline that we offer here will walk you through the steps you will need to take. Moreover you will see which are the departments you can approach for more help and advice.
The stress of working through the legalities associated with your goal of running your own car wash business can be overwhelming. Nevertheless, it pays to sort out all the essential paperwork now rather than to deal with it after the fact, when you have even more on your hands with your up and running operations. Here are the steps:
1. Local Business Registration (Entity and Trade Name)
First of all, there is the local business registration, which involves your business entity and trade name.
You have to decide whether to run your operations as a sole proprietor, corporation, a limited liability company or limited liability partnership. If you are not sure which is the best fit for you, you should consult with an accountant to understand the legal and tax implications of each structure before deciding.
Thereon, you will need to file an application with your state to create your entity. The registration itself comes under the jurisdiction of your local County Clerk offices. Their websites will have a host of answers to help you with the filing process.
Simultaneously, you have to consider your trade name. If you are not using your own name as your business name, you will also have to register a fictitious or “Doing Business As” (DBA) name for your business. Check with your local County Clerk and Registrar as to the availability and legality of the name you want to use. Your ability to apply for business licenses is conditional upon the registration of your business’s legal trade name.
2. Car Wash License & Taxation
In general, you will need a state business license for conducting your car wash business. Moreover you will need it for all functions associated with taxes, zoning, public safety and social impact. The best way to ensure you meet all the requirements and rules specific to your business vicinity, you should double check with your local City Hall or County Clerk or Small Business Administration (SBA) for the specific requirements applicable to where your business will be sited.
To start, check out our post about getting your mobile car wash permit Michigan.
For taxation and employees, you will have to register with your local Department of Treasury for a State Tax Number and with your local Department of Labor for an Employer ID Number (EIN). The Tax Number is necessary for your sales (if applicable), withholding and other tax filings throughout the year.
3. Environmental Licenses
Your car wash business will also have to abide by certain environmental requirements in compliance with state and federal laws. An environmental concern that is commonly associated with car washes relates to washwater or wastewater. Your car wash facility will have to maintain wastewater discharge permits or to treat or reuse your car wash wastewater within set guidelines. The relevant departments often provide best management practices and tips to help you conduct your operations while keeping its polluting effects within permitted limits.
Do ensure you are well aware of the specific environmental rules and regulations that apply to your business operations as well as how you can best apply them. If in doubt on any of the areas, what you need to do is to consult with your local environmental, health or water authorities.
Although the paperwork and legal set up process is rather tedious, you have to do it correctly or you will encounter issues that will set your time tables back even further. If you feel overwhelmed by the process, hire an accountant or CPA with the relevant experience with car wash business set ups. The money you spend on their fees will be well worth the time and effort you expend to get it all done and in the right order.
Having been in the car wash industry for many years, we at DetailXPerts understand the angst of working through these teething stages of the business. Our franchisees benefit from our industry knowledge and business expertise, including local business registration and related processes.
Enjoyed this post? Sign up for our newsletter to receive more valuable business and franchise info, ideas, and extras!