How to start a laundry business? Ready-to-go Solution!

Ready-to-go Solution for Commercial Mini-Laundry Including Business Plan

All the time you judge a person by his looks. Now first impressions are important not only for a man but for a business as well. For restaurants, fitness clubs, spa beauties, hospitals a textile makes this first impression. It’s nice when you can use clean, fresh, soft and crispy textile, bed linen, towels, bathrobes. How can you service textile to have it in an impeccable condition?

To this effect there are laundry, cleaning, ironing services that are in a high-demand over a long period of time.

Currently this market introduces a lot of innovations: aqua-cleaning, dry-cleaning, ozonizing, steam cleaning and many others. But the main target of start a laundry business is still the same – to give a textile its original condition and make money. This direction has a heavy competition and the main task is to reduce costs and expenses. To solve this issue there is a simple way out – to rent linen and textile.

This is a ready-to-go solution: commercial laundry or mini-laundry, it works using non-conventional scheme for laundry and cleaning and makes its profit by leasing out linen and textile.

How it’s functioning:

• Commercial laundry and dry-cleaning;
• RFID technologies;
• The entities, that use rented garments (fitness clubs, SPA centers, swimming pools, hotels, hospitals, plants and factories and other organizations, that use uniforms for staff members).

Why Laundry Business Effective?!

Firstly: a commercial laundry handles a constant range of garments, when a laundry room fails to do that. It allows to adjust efficient consumption of chemicals, one of the costly component in this process. Hence, you can use your equipment and washing machines very rationally. When you have a certain product line of a known quality and you’ve chosen a needed technology, then an entity can increase significantly product life cycle. An entity builds up stock independently basing on customer’s needs choosing the products of a needed quality to have them longer in service. A chemical engineer is specially engaged in this process, a person who knows textile and chemistry.

Secondly: RFID technologies provide anti-loss and anti-theft protection (e.g.: towels anti-theft in a fitness club), quick sorting and inventory because each garment has an invisible embedded RFID chip that is functioning within the whole product life cycle. It’s safe and quick.

Thirdly: it’s profitable for a customer, because in this case he is protected from theft. The customer does not waste money on purchase and constant replenishment and he has costs only of linen rental that are equal to costs of standard laundry. In other words he returns as many soiled linen as he got clean one. The rental pay is calculated only for the quantity of linen that was returned to laundry.

Like this, using a new technology we stay competitive. Having a know-how in hand, we can enter into the market with dumping prices, just combining technology and timeless business.

Let’s Count the Investments to Start a Laundry Business

The cost of a small business with a capacity of 1 ton per a 12-hour  shift work is around $100 K (cost difference can depend on equipment manufactures) + 50% of equipment cost as a rule consists of premises arrangement – it’s a cost of supply lines and its installation (e.g. electricity supply, ventilation, water supply, sewage collection system and gas-supply).

The total cost also includes expendable materials, detergents, cleaning materials, package and  other. Total: $150,000

Purchasing a circulating linen stock, you need to remember a sanitary standard that says one textile unit in use is equal to 2 spare items. E.g.: 1 set (a towel and a bathrobe) is being used by a customer, 1 spare unit is available at contractor’s stock and 1 spare unit is currently processed in laundry room. And it repeats on loop.

That’s why we purchase three instead of one.

If a business processes 1000 kg per shift – it’s about 2000 items of big terry towels per day. I.e.: 2000 items are used by contractor’s customers, 2000 spare items are in contractor’s stock and  2000 items are processed in laundry room. In all a business should purchase 6000 items of terry towels to operate properly, a towel should be of a special quality, at the price of $6,00.

For protection from theft we need to embed RFID chips in towels, it’s done for free by any factory when you have a towels order. The cost of a chip is $0,50 per item. The total amount is 6000 items х $6,5 = $39,000

Laundry business functioning should be developed on a daily basis – fitness club members and hotel guests should have laundry service every day.

Average fitness club consumes around 250 towels per day. Therefore, a business should serve 8 points per day. This small quantity of contractors can be visited and served during one work day, engaging only one car.

And what we have now: the cost of a complete towel process, including a rental pay, is about $0,40. A minimal life cycle of one towel is 100 washing cycles. Therefore, each towel brings profit of  $40 per its life cycle. The better quality of a towel, the longer service life period. We provide service at a cost of $800 per day and $24,000 per month. Out of this amount we spend $4,000 on premises, utility bills and expendable materials, $10,000 for payroll and other.

Afterwards use marketing and your imagination to promote services to other customers.