Overview of the Laundry Industry
The laundry sector is diverse, encompassing services such as coin-operated laundromats, pick-up and delivery, and dry cleaning appealing to a wide range of customers, including individuals, families, and businesses. Self-service laundromats and full-service laundries are the two primary sectors of the laundry industry.
Laundromats can be a lucrative business with the key to profitability lying in locating the right market. Some markets are more profitable than others, giving the business owner ample opportunity to build a successful and prosperous laundromat.
Capital and Startup Tips
Whichever business type you choose, prepare a budget of at least P250,000 to P400,000 as capital.
The amount of investment to start a dry cleaning laundry business will largely depend on the business model, location, and scale of operation. However, for launching on a smaller scale or mobile basis, the investment will be lower in the range of $50,000 to $100,000.
Tips for starting your own laundry business:
- Research the market
- Find the right location
- Estimate the start-up costs
- Get funded
- Choose your products wisely
The cost of capital used to start up a business is also deductible, as is any cost that goes into maintaining a laundry business to keep it in good operating condition.
Income Potential and Factors
Laundromats can earn between $40,000 and $200,000 per year in income, whereas full-service laundries can earn between $100,000 and $1,000,000 per year. Profits will be determined by a variety of factors, including geography, competition, and overall business strategy.
The size of a laundry business can also affect its income generation potential. Larger businesses with the capacity to handle a higher volume of laundry and cater to commercial clients tend to have higher revenues. Additionally, the economies of scale allow them to operate more efficiently and provide a wider range of services, which can contribute to increased income.
How Location Influences Profits
Choosing the right location will have a significant impact on your laundry’s revenue. Towns with a population of more than 20,000 inhabitants or that at least don’t already have this service can be ideal. Coin laundromats suit apartments well, and city centers can earn $100-150,000. Laundromats average $500 daily revenue, with some making $1000 with effective marketing. Revenues can average $300,000.
According to the Coin Laundry Association, the cash flow of laundromats is typically in the range of $15,000 to $300,000 per year.
Selecting the Best Location
A good location for a laundry business should have a large population with the capacity to afford the services. Ideal locations include:
- Residential areas
- Near travel hostels and backpacker lodges
Competition Considerations
If there are already several laundromats in the area, attracting customers may be more challenging. Conversely, few or no competitors in the area can be an advantage. A strategic location like urban housing, boarding houses, rented houses, and educational areas are also important factors in determining a good laundry business location.