Quick and Easy Steps to Starting a Laundry Business

Take Advantage Of The Booming Laundromat Industry

Not so many years ago, you can only see laundromats in the main streets of major cities. Now, however, these establishments have sprouted left and right, and it seems that many of them are prospering. With the shortage of laundry women and our busy lifestyles, more and more people are using the services of a laundry shop to clean their clothes. With these changes, a laundry shop is now one of the most stable businesses the middle class can afford to put up.

For those who wish to venture into this promising business, here are some tips to guide you:

Capitalization. This depends on the size and type of your target market. If you are aiming for the industrial market, you will be needing millions; since this is a more sophisticated topic, we will not discuss it here. On the other hand, if you plan to cater to individual clients, you may be able to start with only around PhP 250,000 (as of October 2012) for a simple set-up. This amount will cover a very basic set-up, with some amount left over for operating expenses.

Location. This is the most critical decision because a bad location can rarely be remedied except by relocation. There are five main criteria in selecting the best location for a laundry shop.

1. Proximity. The nearness of the shop to plenty of potential clients is the most important. Make sure the population nearby is the type that is most likely to patronize a laundromat. Condos and middle class residential areas are some of the good potential markets since they could afford to pay for laundry services.

2. Visibility of the shop is critical. You may be a few steps away from the main street, but if you are not easily seen by passersby, then you will have few customers. If putting up large signages do not remedy the situation, you should look for another place.

3. Good water supply. Water supply must not only be of sufficient quantity, but must also be free of too much minerals that affect the cleaning process.

4. Affordability. Compute your projected profit so that you will know if the rental expense can be accepted and still make a good income. Since nobody can be sure of how much sales the location will generate, be conservative in your estimate. If you feel that the ideal location is too small or too expensive, you can just have a pick-up center and put your equipment at home or in a lower rent area.

5. Reasonable lease contract. Read your lease contract carefully before signing. There may be restrictions that can hinder your business. For example, it is possible that the contract does not allow the use of LPG, and this may force an unacceptable increase in your electricity bill. Include pre-termination terms so that you would have reasonable expenses in case you are forced to close shop before your contract is finished.

Equipment. Buy equipment suitable for commercial operations. Note, too, that you may void the warranty if you use a home type machine for commercial laundry. In the case of washing machines, you have a choice of buying a front- or top-load machine. If you have the capital, it is probably better to buy front-loading washing machines because they use less water and electricity. With no agitator in the middle, they are gentler on clothes. Another issue is what type of dryer to use. An LPG-fuelled dryer will mean a lower operating expense, but it is also riskier than electric dryers and is often not allowed in condos and some lease contracts.

Pricing. This would depend on how cost-efficient your operations are. If after computing your expenses you are confident that you have lower costs than your competitors, then it may be possible to price lower for market penetration. The risk in this strategy is that it may trigger a price war that will make everyone a loser. Generally, it is safer to just go with the market rates and to compete on quality of service instead.

Marketing. Allocate a budget for promotional expenses. Most laundries are enthusiastic in marketing only during the launching stage. Never stop giving out flyers and other marketing activities to get and retain customers. Since it is easier to retain old customers than to get new ones, have loyalty programs to ensure continuous patronage.

Use your own good judgment. There are many companies that will sell you their products and services for laundry businesses. Some of these suppliers even conduct their own seminars. The best policy is to personally scout for and visit each potential supplier. Also, attend several seminars to get a balanced viewpoint. Ultimately, it is you who must decide what is best based on your own observation and never rely solely on what you are told. If you believe you do not have good judgment, then perhaps you should not go into business.

The laundry shop business, if in a good location and well run, is likely to be very profitable. Still, there are many blunders that someone new to this business can commit. Learn all you can about this business before risking your hard earned capital.

To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar on this entitled “Starting a Laundry Shop Business.” Contact them at (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.

Click here to view details of the seminar: Starting a Laundry Shop Business »

*Originally published by the Manila Bulletin. C-4, Sunday, October 28, 2012. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.