According to the Australian Bureau of Statistics, by January 31st 2021 there were 20.1 million registered motor vehicles all across Australia. Considering Australia has a population of more than 25 million people, that’s a huge ratio of people to cars. 

Thus, it’s no surprise to learn that the car wash and detailing industry exceeded $500 million in revenue during 2022. 

There’s a clear demand for car detailing services in Australia. Getting started in the industry could be a worthwhile business idea. However, it’s important to know your legal obligations before taking that first step. 

How To Start A Car Detailing Business

Car detailing is a general term that covers a wide range of services. One of the first matters you will need to determine is the focus of your business. 

For example, consider whether your business will provide interior or exterior car detailing, if you will run a mobile business or have a shop and whether or not there’s a demand for the service in the area you have chosen to operate in. 

All of these questions need to be answered after careful examination and thorough research of the market. It’s also good to assess your own personal strengths and weaknesses here so you know what you can offer and what areas need to be improved on. 

Think about the overall goal you have for your business. Perhaps this is more of a side gig for some extra cash. Or maybe you dream of opening multiple franchises of your car detailing business across Australia in the future. 

All goals are relevant and important – it’s best to be clear on them from the start so you can make decisions accordingly. 

A lot of business owners like to create a business plan where they write everything they have researched and come up with. When you can physically see your ideas (either on screen or paper), it’s easier to stay on track with them and even figure out any flaws that need to be straightened out. 

It also makes it easier to know what resources you need and whether your funding will allow for it. 

Register Your Car Detailing Business

Alright, you’ve decided you want to take the jump and start your car detailing business – great! What’s next? 

Now, you need to register your business

This is an important step. Registering your business notifies official government bodies that you will be conducting business in Australia. As such, you’ll also receive an Australian Business Number (ABN), which is your unique identifier (for example, for tax purposes). 

Business registration can be completed online via the Business Registration Service. You have the option to register your business name and apply for the taxes that are going to be relevant to your business here as well. 

If you have decided that your business will operate as a company, then you’ll need to register your business under a company structure. This will give you an Australian Company Number (ACN), which is used during legal or government matters. 

If you’re unsure about whether your business should be a company or not, do some more research on the type of structure you want your business to have. Businesses commonly operate as a sole trader, partnership, company or even have their business held by a trust

The type of structure that is best for your business will depend heavily on the liabilities and responsibilities you’re suited to taking on. If you’re unsure, one of our expert lawyers can walk you through your options and help you decide on which structure is best suited based on the nature of your business activities and your overall goals. 

Get Legal Documents For Your Car Detailing Business

We often think great ideas drive a business forward, but the reality is, there’s so much more to running a business than just having solid plans. You need to be able to protect your business and make sure it’s operating in a legally compliant way. 

Often, a business’ success is found in the small, mundane details.

Legal agreements make up much of these finer details, both big and small, that can sometimes seem irrelevant or even tedious to go over. Ultimately though, they are what keep your business protected and operating smoothly. 

A car detailing business is no different. So, you will need to consider getting the right legal documents to run your business. We’ve listed a couple of key ones for you below. 

Employment Agreement

When you’re hiring employees, having a written agreement in place can protect both you and them. As an employer, it’s important to effectively establish what you expect from your employees and what they can expect from you. 

As you will owe your employees certain standards under Fair Work Australia, having them in your contractual agreement (as well as practising them) is a necessary step in taking care of these obligations as well as giving your staff security regarding their treatment at work. 

Employment Agreements cover:

  • A description of the role and duties
  • Days and hours of work 
  • Pay, leave and other entitlements
  • Confidentiality 
  • Termination dispute resolutions

It’s important to get a legal professional to help you out with Employment Contracts so that you’re compliant with all the relevant employment laws (such as Work Health and Safety and the National Employment Standards). 

Reach out to our team of employment lawyers to find out more. 

Non-Disclosure Agreement 

Every business requires some form of privacy. This is important when it comes to keeping your ideas and intellectual property protected. Having internal systems in place that protects your business’ confidential matters is a great way to go about doing this. 

However, there will be times where certain things will need to be exposed to others. For example, letting a potential investor take a look at your business plan. In this case, you may wish to get a lawyer to draft you a Business Plan Non-Disclosure Agreement

A Non-Disclosure Agreement usually lets the other party know what information they need to keep private so nothing you don’t want gets out. In other words, it keeps the information between the two parties, and if it is disclosed to an unauthorised third party, legal action can be taken. 

Professional Services Agreement 

Having clear communication with your clients and managing their expectations is essential in establishing a good relationship with them. It’s not uncommon for misunderstandings to occur, which can unfortunately turn the relationship sour and result in the loss of a client. 

In order to avoid this from happening, consider having a Professional Services Agreement  in place. This is a contract between you and your clients which list all the important aspects of your relationship such as: 

  • The scope of the service to be provided
  • Date and time of the service
  • Payment amount and method
  • Warranties
  • Liabilities
  • Roles and probabilities of each party 

Are Car Detailing Businesses Profitable?

As we noted earlier in the article, Australia has a relatively large ownership of motor vehicles and the car detailing industry has experienced a decent amount of revenue in the past year. 

Even though we cannot predict or guarantee whether a certain business will be successful or not, there’s clearly a healthy market for car detailing services. 

Can You Run A Car Detailing Business From Home?

Something you might be thinking about is whether or not your car detailing business can be run from home. There is no straightforward answer to this, as it really comes down to your individual circumstances. 

Running your car detailing business from home could work as the clients can simply bring their vehicles to you. However, you will need to determine whether or not your space will allow you to effectively operate your business from home. For example, consider the following:

  • Is there space for multiple cars? 
  • How about storing equipment? 
  • Will it interfere with your neighbours’ quality of lives in any way? (for example, noise levels) 

If your space can accommodate a car detailing business, then you will need to check your local council regulations and zoning laws. Some local areas will permit car detailing businesses, whereas others will not (or may require special permission from the council). 

Managing Employees Remotely – What Are My Obligations?

Managing employees remotely still comes with the same amount of responsibility in overseeing them as you would if they were with you in person. Your primary duties towards them fall under Fair Work obligations and Workplace Health and Safety

We mentioned Fair Work earlier. Essentially, Fair Work Australia sets the minimum standards of what employees are entitled to at work regarding their pay, wages, breaks, leave and entitlements. A lot of these can differ based on the industry and qualifications of your employee. 

These obligations and entitlements might differ depending on whether a specific modern award applies to your employees. If this is the case, it’s worth speaking to a lawyer about how you can comply with your modern award

You can always use their website to calculate what you owe your employees. This is a minimum standard and needs to be met. 

Work Health And Safety Obligations

Another one of your obligations as an employer are work health and safety obligations. As an employer, it is your duty to provide your employees with an environment that protects their mental and physical well being. 

If your employees work remotely, the way you practise this will be a little different, but the obligations are no less relevant. For example, you might need to provide the right kind of work from home equipment, ensure employees are getting enough breaks away from the screen and all channels of messaging are monitored for professional conduct. 

It’s also important to have open communication with your employees so they can express any concerns with you. Safe Work Australia is the main government agency when it comes to workplace health and safety – check out their resources for more information.  

Equipment Needed For A Car Detailing Business

A major factor for a car detailing business is having the right equipment. Naturally, in order to undertake care detailing services, you will need to have a supply of the right materials, chemicals and tools. 

This can get expensive, so make sure you’re aware of exactly what you will need so you can budget for it in your business plan.

As you will likely be in constant need of some types of equipment, it might be inconvenient to constantly keep purchasing it. Many businesses opt to arrange with a supplier to simply have their materials delivered at an agreed upon date and time. 

This way, you have a stable source arranged. If you’re thinking of engaging with a supplier, it’s important to have the right legal agreement in place with them. This is where a Supply Agreement comes in. 

Get A Supply Agreement 

A Supply Agreement is a legally binding contract between your business and the supplier. It details what materials are to be supplied, when the delivery is to occur and what the cost is. 

Supply Agreements also cover matters such as warranties, dispute resolution, the length of the agreement and termination of the contract. Having these details in writing is important in case something goes wrong. The last thing you want is having your customers upset and empty-handed. 

It’s worth having one in place in order to protect your business operations. 

Do I Need A Car Detailing Business Licence?

Business licences depend on your locality, state and your exact business operations. For example, the use of certain chemicals may demand a licence or some states have a licence requirement while others don’t. 

You can always look this up on the Business Licence Search by entering details about your business activities. The search will then give you all the licences that apply to your business and information on attaining them. 

We’ve also written more about other types of licences you may need, depending on the nature of your business activities. Alternatively, feel free to chat with one of our expert lawyers for more legal advice. 

Key Takeaways

A car detailing business can be a great new business endeavour. However it’s important to make sure you have all your legal obligations sorted. 

To summarise what we’ve discussed: 

  • When starting a car detailing business, it’s important to do your research and make a business plan
  • Then, you will need to register your business and have all your legal documents drawn up 
  • There’s a good market for car detailing businesses and a chance for success
  • If you’re thinking of running your car detailing business from home, check your local council requirements 
  • Workplace obligations still apply to employees that work remotely, such as Fair Work requirements and workplace health and safety 
  • Think about getting a supply agreement for your equipment
  • Be sure to check for any licences your may need 

If you would like a consultation on starting a car detailing business, or other regulatory compliance requirements, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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