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Most of these businesses require the customer to drop off their laundry, although some companies will pick up laundry from the customers’ homes. A full-service laundry and dry cleaning service charges a fee per item for dry cleaning and a fee per pound for standard laundering. This type of business takes some of the responsibility off of the customers who may have busy schedules.
Who is this business right for?
To do well in this business you will have to enjoy cleaning clothes and making them nice for others. It is important to pay attention to the details, not lose track of the customers’ items and make sure the results of the washing, cleaning, pressing and/or folding are excellent.
You will need to work with many different chemicals, some of which are known to be quite toxic. You will have to be comfortable with handling dirty laundry. Some might be very smelly and even disgusting before it is cleaned. Wearing gloves and protective equipment will be an important thing to do to protect your health.
What happens during a typical day at a laundry and dry cleaning business?
This business is all about being on schedule. Opening the store on time, keeping public and employee areas clean, and making sure that orders are fulfilled in a timely manner are all activities you can expect on a daily basis.
If the store processes the laundry and/or dry cleaning on site, you will also need to make sure the equipment is operating properly, and load up the washers and dry cleaning machines with additional clothes that need cleaning to keep making good progress for all of the customers’ orders.
What is the target market?
This is essentially a retail business, with repeat customers coming from the local area. This business sometimes offers subscription services to customers which can lead to increased profits. Regular customers help create a reliable customer base. Laundry Stork is an example of a store that offers subscription services.
Full-service launderers must consider possible allergic reactions in customers and take steps to prevent these from occurring. This is an important consideration as customers will not be choosing the products that will be used in the laundering process.
Many people are concerned by the chemicals used by traditional dry cleaners. Many consumers are also concerned by the environmental impact of this type of business. A business using less harsh chemicals and more organic cleaning methods while reducing its carbon footprint may be preferred such as the example of eco laundry company.
How does a laundry and dry cleaning business make money?
Items for dry cleaning are charged per piece. Regular laundry is charged per pound. Additional charges may apply for special services, such as severe stain removal or making repairs, such as fixing tears or replacing missing buttons.
In a major metropolitan area, the competition for laundry and dry cleaning services may be very intense. Because of this, many stores offer dry cleaning services for shirts and blouses at $1 per piece in order to attract customers. Premium prices are charged for same-day service.
What is the growth potential for a laundry and dry cleaning business?
There is a business model that uses the retail space as only drop off and pick up location, while all the washing and cleaning is done at another location. it is possible to have many retail locations that are supported by an industrial location where all the cleaning of the clothes occurs.
There are also franchise opportunities in this industry. It is possible to start with a single store and then expand to own many more.
What are some skills and experiences that will help you build a successful laundry and dry cleaning business?
You will need to be friendly with the walk-in customers and very careful with their items. Attention to detail is important and you will need to notice things like stains or damage to the clothing to point them out to the customers when they drop off the clothing for laundry or dry cleaning.
There is always a tight schedule of work necessary to get everything ready on time. Customers can be very unforgiving if they come back to the store when their clothes are supposed to be ready and they are not available on time for pick up.
Perhaps the most crucial skill is the ability to remove stains. Here is a list of common stains and the best way of getting them out of clothing.
What are the costs involved in opening a laundry and dry cleaning business?
Unless your business is a work-from-home operation, you will need to pay the deposit for the lease and the first month’s rent for the storefront. In a high-traffic area, expect to pay $3 to $10 per square foot per month for the retail space. You will need to have signage on the front of the store that makes it very visible to those that drive by the store. You will need to have laundry and dry cleaning equipment and a cash register. You will need to have cleaning supplies, coat hangers, and plastic bags. You will need to have a mechanical clothes rack that rotates the finished clothing to keep it in order and ready for customer pick up. Most of these businesses start with about $50,000 worth of equipment, which can be leased and about $2,000 in supplies.
What are the steps to start a laundry and dry cleaning business?
Once you're ready to start your laundry and dry cleaning business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your laundry and dry cleaning business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your laundry and dry cleaning business keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How to promote & market a laundry and dry cleaning business
The best way to promote this business is to use hand delivered flyers that offer a discount coupon and put them under the doors of homes and apartments in the nearby neighborhood.
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How to keep customers coming back
The most common form of advertising is to have a big neon sign in the window saying shirts cleaned for $1. Being very friendly to the customers when they walk in encourages them to come back. Calling them when their clothes are ready adds an extra touch of good customer service.
How and when to build a team
Most of these businesses are family run and operated by just a few people. The time to build up a team comes after the success of operating one store and opening another one. Workers are often paid minimum wage.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate laundry and dry cleaning business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Labor safety requirements
It is important to comply with all relevant Occupational Safety and Health Administration requirements: Here is a link to OSHA’s laundry specific regulations.
Certificate of Occupancy
A laundry and dry cleaning business is generally run out of a storefront location. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a laundry and dry cleaning business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your laundry and dry cleaning business will be in compliance and able to obtain a CO.
How much can you charge customers?
The price per pound of regular laundry ranges from $0.99 to $1.99 depending on whether the items need folding or pressing. Dry cleaning of items starts at $1 per item for shirts or blouses, $5 for pants, $10 for suits, and goes up to $29 for a comforter.
What are the ongoing expenses for a laundry and dry cleaning business?
The ongoing expenses include rent, equipment lease payments, insurance, utilities, supplies, and marketing costs (printing and delivery expenses for promotional flyers).
How much profit can a laundry and dry cleaning business make?
This business, when it serves an active customer base, is very profitable. Revenues easily exceed $200 per day and costs are less than half of that. A small shop can make at least $30,000 in profit per year after paying all expenses. Many entrepreneurs have become very wealthy owning and operating multiple storefronts in this business.
How can you make your business more profitable?
Ways to make this business more profitable include offering pick-up and delivery service for an additional fee to help individuals with a busy schedule, offering clothing alterations/tailoring service, and shoe repair/polishing. Opening multiple locations, once finances and demand permit, will also lead to increased profits.