7 Steps to Become a Laundry Business

Starting a Laundry Business – Sample Business Plan Template


1.  Consider your Financial Resources
Starting a laundry business may or may not be capital intensive; depending on the scale you are starting on. You may decide to get a franchise to reduce the level of risk but this may result in lesser control over your business and additional overhead in the form of royalties and all other expenses. Yet, a franchise is a nice option because of its marketing and operational benefits, among others. However, you can start this business right from home especially when you have little or no money.

How Much Does It Cost to Start a Laundry Business?

It will be a wise decision to first and foremost take out time to conduct detailed cost analysis before investing your time and money into the business idea. The truth is that some businesses fail simply because proper cost analysis was not carried out prior to starting the business.
As a matter of fact, some entrepreneurs back – out after conducting detailed cost analysis of the business they intend starting. In most cases they would have discovered that they don’t have the financial capacity to start and run the business. In some cases some entrepreneur would have to go back to the drawing board to re – strategize and perhaps raise more money to finance the business.
Consequently, if you intend starting your own laundry business, it will be to your best interest to conduct a detailed cost analysis before starting the business. Conducting cost analysis will basically give you the total cost of starting and running a laundry business in your chosen location. The report you get from your cost analysis will help you set realistic financial goal for your business (starting cost and running cost). Let us examine a detailed cost analysis for starting a laundry business;
  • The Cost of Registering the Business-: The cost of registering business varies from country to country. For example, the cost or registering a business in South Africa is about  (10 USD). You can confirm from the corporate affairs commissions of your country to get the exact amount required in registering a business.
  • The Cost of Renting or Leasing a Facility-: The truth is that the cost of renting or leasing facilities varies from country to country and even from location to location within the same country and state. For example; if you want to rent a decent facility for your laundry business in South Africa, you will pay an annual rent within the range of (1,400 to 2,250 USD) in most part of the city.
  • The Cost of Acquiring Commercial Laundry Equipments-: Basically you would need a washing machine, dryer, industrial iron, pressing table, generator, shelve and hangers, supply of detergents, starch, bleach and nylon. The cost of these items varies slightly in different countries and cities in the world. On the average, you are supposed to budget within the range of  (2,250 to 3,350 USD). It could be more and it could be less due to some changing market factors.
  • Salaries for a Minimum of 3 People-: Another cost you should consider if you want to conduct detailed cost analysis for your laundry business, is the cost of paying salaries for a minimum of 3 people for a period of 6 months. The 3 employees basically will be the washer man, the person that handles ironing of clothes and the pick – up and delivery person; you can handle any of the duties along side administrative and other oversight roles if you intend cutting cost. Just like most of the cost listed above, salaries of employees vary from country to country. Taking Nigeria as a case study, an average employee that works in a dry cleaning firm earns about 25,000 to 40,000 naira per month (140 to 225 USD). Since you are budgeting for 3 people for a period of 6 months, i.e. 40,000 X 3 = 120,000 per month, then for 6 months it will be 120,000 X 6months = 720,000 naira for 6 months (4,000 USD).
  • Tax and Bills-: Regarding tax and payment of bill, it also varies. There are factors that determine the amount of tax you are to pay in your country, it is important to make enquiries from the nearest tax office around you. You should also factor the cost of bill payments when conducting cost analysis for your laundry business. You are expected to pay basic utility bills (power, water and other bills unique to the location where you intend starting your laundry business).
  • The General Running Cost and Miscellaneous-: General running cost covers, the cost of fueling and servicing your delivery van, cost of fueling your generating set, cost of adverts and promotion (optional) and other re – occurring cost that you might incur when running your laundry business. This cost varies and it can be controlled.
On the average, the cost of starting and running a standard laundry business with basic commercial laundry equipments in a decent location would range from 2.5M to 3.5M naira (14,000 to 20,000 USD). It is important to state that there are some peculiar factors that might reduce or increase the overall cost. The bottom line is that it is important to have an idea of the amount required to start and manage a standard laundry business.
2.  Draw your Business Plan
A business plan is very crucial to the success of any business. You have to describe the way you would like to run your business in writing. List the services you will provide including specialized ones such as pick-up and delivery, wash-and-fold, etc. Here is a sample laundromat business plan template you can start with.
You should also determine your target market and demographics. Are your target customers apartment building residents, busy professional or college students? This is an answer you must find and a good way to find such an answer is by conducting a feasibility study. You should also carry out research on how well other laundry businesses in your locality are surviving and meeting the population requirements.
Example of Niche Service ideas in the Laundry Industry
  • Home Pickup and Home Delivery-: One of the ideas that you can adopt in the bid to building and growing your laundry service is to offer home pickup and home delivery to your clients. Most clients appreciate it if you pick up dirty clothes from their homes and deliver clean clothes to their homes at no extra cost. Every human loves comfort and they tend to move towards anyone that can offer them comfort.
  • Create Unique Laundry Service for Hotels and Motels-: Instead of targeting individual clients alone, one idea that will help you generate more income for your laundry business is to create a unique laundry service for hotels and motels around you. Of course they are likely going to be some of your biggest clients and as such their prices should be discounted. Your unique service to them might be manning their laundry department or picking up and delivering laundries from them at specific time on a daily basis.
  • Create Unique Laundry Service for Boarding Schools-: Creating unique laundry service for boarding schools is another fantastic business idea that can help your laundry business generates more revenue. Therefore, approach boarding schools around you to help them handle their laundry services.
  • Create Unique Laundry Service for Hospitals-: Another highly sellable business idea for laundry business is to create unique laundry service for hospitals. Once you are able to win contracts to help hospitals around you handle their laundry jobs, you are not going to struggle to keep your laundry business growing because there will always be jobs for you to handle.
  • Create Unique Laundry Service for Churches and Seminaries-: You can also create unique laundry service for churches and seminaries around you. There are loads of churches out there whose choristers and clergies make use of robes. Washing and ironing these robes can be difficult so if you offer to help them handle it, you are likely going to get the contract if they don’t have anyone handling it for them.
  • Start Selling, Repairing and Servicing of Laundry Equipments-: Lastly one of the ideas that you can consider in the bid to generate more income for your laundry business is to start selling, repairing and servicing of laundry equipments in your area. You will be so amazed at the income you will generate when you include this as your business offering.
3.  Look for an appropriate location
Except you intend operating from home, your business location is something you should not handle like a pinch of salt. When choosing an operating space or location, you need to look for an area that is accessible and close to apartment buildings. This will help attract customers who do not have laundry machines at home. However, you must not open a store near a competitor; except the competitor is not up and doing or you feel you have a competitive advantage.
4.  Buy the necessary equipment
After spotting and securing a good office space, you will need to order for dryers, coin machines, washers, pressing iron, laundry carts, detergents and vending machines.
You can make a search for an online auction sites for deals on used laundry equipment. You can also purchase top-load washers to economize your money. Or better still, you can lease or rent equipment and run your business until you are bouyant enough to buy your own equipment outright.
5.  Secure a permit and register your business
On this aspect, you have to visit your city clerk or local government secretariat to apply for a business permit or license. You also need to find out if your municipality requires you to acquire a health department license, water pollution control, fire department permit or air permit. You should make payments for any sewer connection and waste water fees required by your city clerk. After that, you can proceed to either register a business or incorporate.
6. Market your Laundry Business
After your business is up and running, you should endeavor to advertise it and this cannot be done without a laundromat marketing plan. A good way to start is by placing door hangers on apartment building doors. You have to include a list of your services and offer coupons to your new customers.
  • Bonus Service-: Another idea that you can introduce in your laundry business is to offer bonus service. It is simply, you can decide to give wash and iron two clothes for free for every dozen of clothes a customer brings and paid for. In case you don’t know, people like bonus including those who can afford to pay for the service without stress.
  • Start Customers Loyalty Competitions and Reward System-: Customers loyalty competitions and reward system is another idea that can help you generate more revenue for your laundry business. This is how it works, give every customer a special card when they patronize you and ask them to bring the cards back once it has gotten to a number say 12 or 24 and then exchange the cards with free services or gifts or even coupons et al.
  • Offer Discounts from Time to Time-: Another idea you can introduce in your laundry business is to offer discounts from time to time. Customers like it when they know that they are likely going to pay less for a service; it will sure increase your sale. You can afford to start with little discount and then grow as your business grow as well.
You should also differentiate your laundry business from your competition by emphasizing on any specialized services or perks you offer, such as free wireless internet, televisions and couches. You should as well hang fliers on local bulletin boards and place ads on online newspapers or in print.
  • Do a house-to-house sales call and let your neighbors know that you are in business. Also tell them the kind of services you offer.
  • Visit offices, workplaces and corporate organizations and let them know the type of services you offer.
  • Place of directional sign post at strategic locations within your neighborhood.
  • Put your business on the web and get on social platforms like Facebook, Twitter, etc
Now every business, no matter how lucrative the business is comes with its own fair share of challenges. The fact that laundry business seems to be a profitable business does not mean that you are not going to encounter some form of challenges when you start the business. Either way, the challenges people who own laundry business face varies from region to region and from country to country. The bottom line is that there are challenges that are unique to laundry business.

17 Unique Challenges of Running a Laundry Business

If you are able to conduct detailed feasibility studies and market survey before setting up your own laundry business, you will be fortunate to take note of the common challenges those who operate laundry business face in the location you intend opening your own laundry business. The truth is that once you are able to highlight the numerous challenges that confront owners of laundry business in your choice location, it will make it easier for you to devise a means to overcome some or even all of the challenges.
No doubt there is the possibility that even if you have been informed of the challenges you are going to face in running your own business, you will still struggle to overcome some of the challenges. One of the means to overcoming business challenges is to consult business consultants who have robust experience in the industry.
Now let us quickly consider the unique challenges you are going to face if you want to run a laundry business;
a. Issues of Missing Clothes
One of the unique challenges that you are likely going to face in your laundry business is the issues of missing clothes. Of course, if you have enough clients with loads of clothes to dry – clean, there is the likelihood that you might misplace a clients’ clothe. It could be a missing shirt, missing pants or most commonly, and missing singlet. In order to overcome this challenge, you must adopt effective documentation of items (proper labeling and handling) at every stage of the process of dry cleaning the clothes.
b. Issues of Stained Clothes
Another challenge that is unique to laundry business is the issue of stained clothes. If you are not careful whilst washing, some clothes could run and you might end up staining other clothes in the washing machine. That is why it is important to properly read the label on the clothe and then follow the instructions as stated. In most cases manufacturers of clothes which run will indicate it on the label and advise that it should not be washed alongside other clothes. The truth is that most clients will not take it likely once you stain their clothes. In some cases, you might have to replace the cloth if you come across an unyielding customer.
c. Rainy / Wet Days
Laundry owners appreciate it when the weather is sunny because it provides enough heat for them to dry clothes especially if they don’t have industrial laundry dryer. As a laundry owner one of the challenges you are going to face is rainy / wet days. It is quite unfortunate that rainy days can’t possibly be eliminated, all you need to do is to devise a means to dry your clothes that is why clothes drying machine was invented to mitigate this challenge .
d. Burnt Clothes
If you are not careful whilst using industrial pressing iron you are likely going to get your clients’ clothes burnt. It is advisable to read the label on the shirt / clothe to know the heat that is suitable for ironing it. Of course you know that you can’t use same temperature to iron clothes made of silk and clothes made of pure cotton.
e. Clean Water Supply
Another challenge you are likely going to face as you start your own laundry business is the challenge of constant clean water supply. If you live in some part of the world- especially in places that are prone to scarcity of water, you will agree that getting constant supply of clean water can sometime be difficult. The truth is that you need clean water to be able to effectively wash dirty clothes.
f. Electrical Power Supply
Constant electrical power supply is yet another challenge that you are likely going to face when you start your own laundry business. Epileptic power supply is common in third world countries and laundry businesses rely on electrical power to do their job. In order to overcome this challenge, you should generate your own electrical power yourself; a standby generator will be of great help.
g. Meeting Up With Delivery Time (Set targets)
There is a stage of growth in your laundry business that you may be faced with the challenge of meeting up with delivery time. The truth is that if you do not properly manage the growth of your business you will definitely face this challenge. So, ensure that you adopt strategy that will help you meet up with set targets even if it means hiring more hands.
h. Sourcing for Clients
If you are starting out with your laundry business, one of the challenges that you are likely going to face is the challenge of attracting customers. Sourcing for customers for a new business can be quite challenging especially if there are other established laundry shops in your location.
i. Enough Space (Bigger Facility) in Good Location
Operating a laundry business requires enough space for sorting out clothes, washing, ironing, packaging and storing the clothes. If you intend starting your laundry business in the city, you will definitely be confronted with the challenge of securing a facility with enough space to effectively carry out your laundry job.
j. Equipment Breakdown
The various Equipment you have is subject to wear and tear, hence you should expect that your laundry equipment will breakdown at some point. The truth is that if you don’t have a back – up equipment and you are not prepared for an equipment breakdown, you are likely going to get stranded once your laundry equipment breakdowns during operation.
  • It requires a technical know how. You can’t just wake up and setup a laundry shop. You will need to first know how to run a laundry shop, operate the machines, take customers order, sort the clothes, etc. Therefore, establishing a laundry business requires a lot of technical experiences in order to be able to manage and control the affairs of the business.
  • Competition-: This can force you out of business especially when you are not prepared and you don’t have any competitive advantage.
There you have it; the 15 unique challenges of running a laundry business. In Conclusion, if you have being able to build your laundry business in such a way that your brand is generally accepted by people in your community, then one of the idea that you need to introduce is to open various outlets of your laundry shop in different part of town. It will make it easier for your clients that are far away from you to connect with you since the business is now closer to them.

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