The most important key company figures when setting up a car wash business

Key company figures help you to monitor developments in your business over time and if necessary to control them. But you should also have some of them ready when you start your business, because they are of interest for your business plan and for the interview with the bank.

Overview of the most important key company figures

You don't have to know all the key company figures that exist. For example, those that deal with production quantities are not relevant for your car wash. Others, on the other hand, are valuable tools. We have compiled these for you. They can easily be divided into two groups.

Important key company figures for your bank interview

Are you looking for a loan to start your own car wash business? Then you should include some key figures in your business plan. The following are important:
 

• Equity ratio: How much of your own capital do you own, and how large would your share of the total capital be if you received the envisaged loan amount? Here it is important to know that in most cases you should have an equity ratio of at least 20 % – but more is better in this case. Some institutions even only grant loans with an equity ratio of 50 % or more. As a general rule, the higher your equity ratio, the easier it will be for you to obtain loans on better terms.
• Borrowing requirements: The borrowing requirements are closely related to the amount of equity capital; they indicate how much borrowed capital you need to set up the company.
• Liquidity ratio: The liquidity ratio provides information about how much money you have available in the company at the moment – i.e. how long you are able to pay your bills from the current status.
• Debt servicing capacity: This key figure specifies which interest levels and repayment instalments you can currently service.

You will not have any other reliable figures before setting up the company. You provide a profitability forecast and a liquidity plan showing how your company's profitability is likely to develop, when it will start making a profit and how you will stay solvent in the meantime. However, these figures are based on assumptions.

Key company figures during daily operations

Once your company is up and running, you should monitor your KPIs regularly. It's not enough to just look at profit or volume of sales, because there can be many different reasons why one figure is high and the other low. The most important KPIs are as follows:
 

• Total capital: Equity and borrowed capital together make up the total capital. If you are not making major purchases, the equity ratio should increase over time.
• Return on assets: If you add the interest on borrowed capital and your net profits and divide the sum by your total capital, you receive the return on assets.
• Debt repayment term: How long will it take until you have paid off your loans, given the current status of your business success?
• Contribution margin: This is the difference between the costs incurred for the running of the car wash and the income. The contribution margin must at least cover costs – if not, the company makes losses. It is better to make a profit.
• Gross profit: If you deduct your costs from the turnover, you get the gross profit generated.
• Return on investment (ROI): Your ROI shows how high your profit is in relation to your capital outlay.
• Return on sales: The level of return on sales allows us to determine how the company is doing in the marketplace – with a high return on sales, there is probably little competition, and with a low return of sales, the market is more competitive.
• Cash flow: All income and expenses that result in outgoing and incoming payments in the current period together make up the cash flow. It shows more precisely than the profit and loss account how the company's finances stand.
• Break-even point: This is the moment when your company is in the black for the first time, turning from loss to profit.

Naturally, you must not neglect the key figures that you determined before the company was set up. You should regularly check whether your car wash is developing according to plan. If this is not the case, you still have a few adjustments that you can make. There are various ways to reduce expenditure and increase revenue slightly. You can determine which of these is necessary at an earlier stage using the key figures rather than finding out in your annual tax return that you are not doing well.

Summary: Practice pays off

Quite apart from the fact that you make a good impression on potential lenders with plausible key figures, you can also use them to continuously monitor the success of your still young company. Although the numerous terms and formulas may seem confusing at first, as soon as you have gained some experience, you will be able to calculate quickly. You can see at a glance if one of the figures is reaching a critical level and take appropriate countermeasures.