How to Start a Laundry Business
Residential Cleaning
By Angela RushJune 19, 2023
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Lawn care service business owners should strategically price their services by analyzing job costs, considering customer value, and regularly reviewing and adjusting prices to maintain competitiveness.
Lawn care service business owners should strategically price their services by analyzing job costs, considering customer value, and regularly reviewing and adjusting prices to maintain competitiveness.
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Laundry is a common chore that often gets overlooked. Everyday tasks take precedence over laundry in most households, thus creating a demand for a niche market like laundry services.
When people don’t have the time or motivation to do their own laundry, they often hire a service. Luckily, laundry services come in a wide variety, making it easier for those looking to enter the industry.
A laundry service is typically one of two things: a crew that picks up, cleans, and drops off your laundry or an established place where laundry can be done, like a laundromat or dry cleaner. The general idea of a laundry service is to take the stress of completing laundry from your consumers and provide them with fresh, clean, stain-free, and ironed laundry.
The common pricing method for laundry is to charge per pound. The average cost of a load of laundry (around six pounds) is anywhere between $1.50 and $4.00 per pound.
Laundry services with higher costs are seen in regions with a higher cost of living. Depending on where you establish your laundry service business, your cost per pound may vary.
Depending on what type of laundry service you are thinking of starting, your return on investment (ROI) may differ.
The average laundromat can reach a 20% to 30% ROI — making it one of the most lucrative laundry businesses to start. This is because of the low labor costs associated with running a laundromat. With quality appliances and supplies, your laundromat services should be able to provide you with a sustainable income.
Moreover, other laundry services can be profitable depending on how savvy you are. Before starting a laundry service, consider what type of service you would like to offer and their corresponding costs.
If you’re looking to enter the laundry service industry, the type of service you choose to offer depends on how much laundry you want to do. There are four common types of laundry services and each varies in style, giving you more freedom to choose the best fit.
If you are interested in owning your own laundry business, then a self-service or laundromat may be the best way to approach your new venture. Laundromats differ from a typical laundry service because clients bring in their own laundry and wash, dry, and fold their belongings themselves.
Self-service laundry businesses can generate up to $300,000 of annual revenue in the United States. The laundromat industry has a 95% success rate with a 20% to 35% return on investment (ROI), which makes starting a self-service laundry business a great opportunity.
You can take a laundromat one step further by providing in-house services where clients can drop off their loads of laundry and come back to pick them up. Offering this full service is one way to expand your laundry business if you choose to open up a laundromat.
Often, the full-service laundry experience within a laundromat is referred to as a “fluff and fold.” This is because the workers performing the laundry duties wash, dry, and fold the dropped-off loads. Typically, ironing is not part of the “fluff and fold” process, but it can be done for an additional fee.
By including a full-service laundry experience in your laundromat, you could see a potential increase in revenue of roughly 24%.
This additional service to your laundromat is similar to full-service. However, the main difference is the delivery.
Instead of clients coming to the laundromat to drop off their loads of laundry, employees will drive to the clients’ homes, or designated drop-off locations, and pick up the laundry from there. Once the laundry has been completed inside the laundromat and has been pressed and hung or folded, employees will then deliver the clean laundry back to the client.
Moreover, pick-up and delivery laundry services typically have a set list and schedule of clientele. Some clients may book your services weekly or monthly, depending on how often they feel like they need their laundry to be done.
Managing your costs with a pick-up and delivery service may be challenging. Costs associated with this type of laundry service can include gas, overall mileage on your company vehicles, and time spent away from the store. If managed properly, however, the costs associated with delivery will not negatively impact your overall revenue.
A laundry service does not only have to be offered in the form of a laundromat. You can still successfully own a laundry service in a niche market. Niche markets allow businesses to sell specialized goods or services that are in high demand and are a great way to get your footing in the laundry service industry.
When considering how to begin your laundry service, it is important to understand what market you want to enter. The following will help you know more about the two most common target markets in the laundry service industry.
Laundry can be done for just about any type of business. However, large commercial laundry services mainly focus on medical and hospitality. This is because the term “commercial” is so broad that it can be difficult for larger companies to offer their services for every laundry need.
Laundry services for medical care are often split into two categories: heavy-duty and light-duty.
Heavy-duty medical laundry services are offered mainly at hospitals or laboratories. Scrubs, towels, blankets, sheets, and other cross-contaminated fabrics are picked up and delivered once thoroughly washed and sanitized. Most fabrics have been impacted by blood and other bodily fluids.
Light-duty medical laundry services are offered at clinical offices, spas, and gyms for towels, specific scrubs, or other fabrics that may have come into contact with blood or bodily fluids.
Laundry is a hot commodity within the hospitality business. Hotels, short-term rentals, and restaurants all have a high demand for consistent laundry services. Self-run laundry services typically are seen within the hospitality industry, with sheets, towels, and additional bedding being the main items to be washed.
Anyone can start this type of laundry service. You can choose to either perform the laundry at home or in a rented space with multiple washing and drying machines.
The second most common laundry service is consumer apparel. Typically, consumer apparel is a laundry service in the form of a laundromat.
Regardless, you can offer an at-home consumer apparel laundry service. This is a small market in itself because most laundry services perform laundry duties in a different location from their home. However, at-home laundry services are possible and profitable if done properly.
The only downfall of at-home laundry services is that your home and work lives are always side-by-side.
Knowing where to begin with a new business is tough, even more so when you want to start a laundry service business. The following will help guide you through the process of starting your own laundry service.
For any new venture, you will want to form a business plan, which can include your business’s name, logo, target market, financial breakdown, and employment logistics. It’s important to lay out your business in a simple plan that can be referenced for potential investors or given to banks for loans if you choose to expand your laundry business one day.
A lot of money can first go into a laundry business. Expect your laundry business’ start-up costs to be between $200,000 and $500,000 when opening a laundromat.
When creating your financial plan, it is imperative that you also consider using a budget. For any start-up laundry business, it is never too early to start saving. Having a budget that allows you to save within the first few years of business will help you in the long run. If you have money saved, you can look into upgrading your equipment, offering additional services, or expanding.
You’ll also have inevitable costs associated with your laundry business, including washing and drying machines, rent, water, and electricity. Your budget should consider these costs. Depending on whether or not you choose to open a laundromat or perform your laundry services from home, your costs may vary.
Where are you planning to host your laundry service? This is a big question to consider since it will be the focus of your business. For the most part, where you operate is where your clients will be coming and going.
If you choose to open a laundromat, you will want to look into consulting a realtor. Before consulting with one, you will want to consider the following:
These questions can still be applied to a rental space you may use for a self-ran laundry service or dry cleaning business. If you are primarily working from home, you may want to consider pick-up and drop-off locations that are still professional and easily accessible.
Once you have your business plan, financials, and location established, you will want to get your paperwork in order. To register your laundry service, you will need to first trademark your brand name and logo. This will ensure that your laundry business is legally secured as your own.
Often, dry cleaning laundry services are their own entity. Even if you wish to add dry cleaning to your laundromat, it is recommended that the dry cleaning is done in a different location due to the nature of the chemicals involved. Detergent is added to the chemical solvents to break down additional grease or stains.
Additionally, dry cleaning takes more than just a washer and dryer. A specific, four-part, machine is used during the dry cleaning process. All four parts of the dry cleaning machine are to help aid the chemical solvent and detergent to ease stains and wrinkles out of delicate fabrics.
As of 2022, the dry cleaning industry is valued at 7.2 billion dollars. This leaves your business plenty of room to grow by your breakeven year.
Next, you will need to apply for an Employer Identification Number (EIN). This identification number is for taxes and will allow your business to be identified as a business operating within the United States. Lastly, you will need to register your laundry business name with the state in which you operate.
For any laundry service business, washing and drying machines are a must. Laundromats will have additional supplies like foldable tables, chairs, ATMs, coin and bill changing machines, clothing racks, ironing boards, and more that customers should have easy access to.
Considering a laundromat is a self-service laundry business, the supplies you will need are geared towards consumer usage. Also, consider supplying detergent and dryer balls or sheets for consumers to purchase.
Dry cleaning services need much more than your average washer, dryer, and detergent. They require fabric cleaning chemicals and a pressing machine, which is a large iron and board station that presses wrinkles out of shirts and pants. Sorting bins, hangers, clothing bags, and tags are additional supplies necessary for a dry cleaning business.
Pick-up and delivery laundry services will need supplies similar to a dry cleaner. Clothing bags, hangers, and tags are important to keep the clients’ clothes fresh during the delivery process. Foldables can go in a small laundry basket or bin.
As a pick-up and delivery service, you can determine whether or not the foldable items are placed in your own purchased laundry basket or one your client must provide for you. Supplying a laundry basket may be expensive, but it can also be an additional service that gives your brand more value.
A key component of operating any laundry service is the licenses and permits required. Depending on your location, your license and permit requirements may vary. The following are the three common permits typically required to open a laundry service.
A health permit is important because you are dealing with other people’s belongings. You can see if your chosen laundry service needs a health permit to legally operate through your county’s health department.
For any laundry service, you may need a water pollution control permit. This is because your laundry service runs on water, and detergent and other fabric cleaning chemicals are involved. While not every state requires a water pollution control permit, it’s important to obtain one so that you’re familiar with the proper water waste disposal protocols.
If you are a registered laundry business, you will need to apply for a sales tax permit — especially if you choose to sell any additional items or services in your existing laundry business. For example, if you stock detergent, hangers, or laundry baskets, then you will need to have a sales tax permit to actually sell those products.
Unfortunately, accidents can happen. Employees can become injured on the job, a customer could slip and fall, or a machine could damage someone’s belongings. Insuring your laundry service will aid you in any liability for damage or injury.
When starting your laundry service, consider obtaining the following types of insurance:
Running a laundry service by yourself can become difficult as you start building up your clientele or having more foot traffic in your business’s location — but hiring employees can help.
Laundromats should hire employees that will open and close the place of business and watch the store for potential theft. Consumers’ belongings can be stolen by other customers, and coin machines can be broken into. Having staff walk around the aisles of machines and ironing stations will help decrease the chances of theft.
Dry cleaning businesses can benefit from a few employees that manage the washing, folding, and ironing. A front desk clerk will handle transactions and ensure the cash register is not left unattended.
Pick-up and delivery services can be tough to run single-handedly. Having employees not only wash and dry the clothes but also pick up and deliver loads of laundry will help your laundry service run more efficiently.
With your new laundry service, you will want to acquire customers. The best way to get your laundry service’s business name out is through marketing.
Consider investing in signage and a website right away to make people aware of your business. Flyers, pamphlets, and other means of signage like bus exterior ads or billboards are great ways to advertise your laundry service.
Marketing your new laundry service does not have to be a big expense, however. You can utilize social media as a tool for creating your brand name and image. Facebook may be the best option for a laundry service because it allows you to create communities or groups. These can be utilized as a way to connect further with your clientele.
You can also learn from these groups what your clients are looking for in a laundry service. For example, maybe you notice your group’s users asking about delivery services. Now, you are aware of another consumer need that you could potentially provide to further develop your relationships with clients.
Getting your laundry service up and running can easily be done with the Taskbird app.
Manage your schedules, employees, and payments all in one place — and from anywhere. Utilize Taskbird’s platform to streamline communication and management among your team.