Start a laundry delivery service by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your laundry delivery service. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a laundry delivery service?
Costs are thankfully very low to get started. If you have a car, a washer and dryer, and some cleaning products, you can get started today. Most people either do this out of their home, or at their local laundromat. The biggest costs are generally for the website software you need to set up a page. This can be as low as $200 a year for standard software, or around $500 a year or more if you want to set up more involved options such as online ordering and scheduling.
What are the ongoing expenses for a laundry delivery service?
Owners should factor in the following expenses for their laundry delivery service:
- Cleaning products
- Washer/dryer maintenance
- Utility bills
- Website upkeep
- Cost of flyers and business cards
- Laundromat costs
- Driving costs
Who is the target market?
There are a variety of people who can use this service. You may want to target businesses who need to have laundry done on a regular basis (e.g., spas, restaurants, hospitals), or individuals who find themselves overwhelmed by mountains of laundry. Upper class members of society will certainly have more disposable income to spend on this service, but entrepreneurs should not necessarily target the wealthier people of the community. By setting your price points in range with the busy middle class or even lower middle class, you may end up getting the bigger client base you want.
How does a laundry delivery service make money?
Laundry delivery services make money by charging people a fee for washing their clothes. Owners may charge by the pound, the load, or the types of clothes or fabric that need to be laundered.
How much can you charge customers?
The amount you charge is generally based on driving and laundry expenses, as well as additional factors like insurance and employee salaries (when applicable). One national chain charges $3 a pound for laundry with a 30 pound minimum. For larger items, such as comforters, customers can expect a higher set price (e.g., $20 for a queen). You can also charge more for abnormal circumstances (e.g., rush delivery or holiday orders).
How much profit can a laundry delivery service make?
Profit is dependent on volume, so it helps to attract clients who need steady work every week. The cost to run a load of laundry differs depending on your equipment. It may cost up to $1, depending on the type of detergent you use and the efficiency of your washer and dryer. If you charge $10 per load then, you're making a $9 profit every time. Just 15 loads a day, and you can make more than $130.
How can you make your business more profitable?
Owners may want to expand their business to include dry cleaning delivery. Or you could use this service as a way to venture into a full-scale housekeeping or maid service.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your laundry delivery service is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
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.
STEP 5: 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.
STEP 6: 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.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a laundry delivery 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.
For 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.
Certificate of Occupancy
A laundry business is generally run out of a large building or a home. 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 delivery 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 delivery business will be in compliance and able to obtain a CO.
STEP 7: 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.
STEP 8: 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.
How to promote & market a laundry delivery service
You should advertise your company both online and off. Online work involves creating a user friendly website that explains how you work, who you are, and how people can take advantage of your services. Use heavily searched words such as ‘laundry services’ in your copy, and keep a blog so you can update your content regularly.
When it comes to promoting yourself offline, distribute your card and flyers at all the local businesses. Call every business you think may need your services, and do a quick introduction (without being pushy.)
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Retain customers by always giving them their clothes back in pristine condition. Attract customers with price points that fit their budget, and offer a variety of services for different types of people. For example, you may want to give a doctor’s office a deal for ordering in bulk, or a special discount for brand new parents.
STEP 9: Establish your 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.
Start A Laundry Delivery Service In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is excellent for someone who enjoys helping others manage their lives. Many people who start this are stay-at-home moms looking for ways to make more money on the side. By specializing in one cleaning task, you take a major activity off of someone else’s to-do list. Entrepreneurs should have a passion for cleanliness, and respect for the many different types of fabric and styles of clothes they may come across.
What happens during a typical day at a laundry delivery service?
Owners should make time in their day for the following tasks:
- Picking up/dropping off laundry
- Laundering clothes
- Advertising for more clients
- Providing customer service
- Establishing a payment system
- Liability/commercial insurance
- Creating and maintaining a website
What are some skills and experiences that will help you build a successful laundry delivery service?
The best skill will be reliability and integrity. Clients need to know they can trust you to get their clothes finished on time without damaging them. Owners should be friendly and courteous at all times, even when they're faced with a particularly nasty customer. Some type of salesmanship will also be an invaluable thing to have, as you'll need to get your name out there. More than simple repetitive advertising of your company name though, it may take some persuasion to convince people it's not too indulgent or wasteful to outsource their laundry.
What is the growth potential for a laundry delivery service?
This depends on the amount of competition in your area, and the types of people who live nearby. You’re limited by geographic location, so make sure that those in your neighborhood can afford to spend money on laundry first. However, the need for these types of services only continue to grow as everyone's lives become more hectic. By ensuring quality and guaranteeing satisfaction, you may find yourself needing to scale your services to fit the demand after only a few months.
TRUiC's YouTube Channel
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Take the Next Step
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.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a laundry delivery service?
Think carefully about who you want your clients to be, and how many of them you want to have. You should have an organized and detail record-keeping system before even letting people know of your services. You will be limited by the amount of laundry you can do in a day if you work out of the home, so consider utilizing a laundromat to get more done. In addition, allow yourself at least a few months to build up your business before calling it quits.
How and when to build a team
Most people don’t start this business with a team. They'll stick with it on their own until it becomes necessary to ask for help. Should you need to hire employees, look for people who are organized, efficient, and punctual. It may not seem difficult to perform this service, but there are a lot of chances for clothes to be mixed up, ruined, or lost entirely.