Craft Your Business Plan
If you have ever thought about opening up your own laundry business, there are some preliminary steps you are going to have to take beforehand. Before putting pen to paper, you will have to determine what kind of business you want to open: if it is going to be a dry cleaners where customers will drop off their laundry to be cleaned and dried, or a laundromat where customers will come to clean and dry their laundry themselves. The business moves you make will change based on the option you choose.
It is never recommended that you go into any business without first conducting some research and putting pen to paper. Any successful business must start with a business plan, and within that plan, you’ll outline what is known as a SWOT analysis. A SWOT analysis is inclusive of four factors and will help you take a good look at the business you’re about to open. They are:
- Strengths. What can you offer that you feel no one else can? Or, asked a different way, what do you think you do really well in this field? The answers to those questions will help you figure out how to position yourself properly so that you attract as many customers to your laundromat or dry cleaners as possible.
- Weaknesses. Where can you make improvements within your business model? Are there any resources you don’t have? Once you answer these, you can fill in those gaps to ensure a more successful entrepreneurial experience.
- Opportunities. What are they? How can you take your research of the market and turn them into strengths that you implement within your company? A trend in the industry is “green cleaning”, which refers to sustainability and eco-friendly practices with the washers, dryers, and the detergent. The answers to those questions will determine the difference between someone that is an opportunity and something that is an obstacle.
- Threats. Are there threats present, especially in the form of competition? What are experts saying about the growth of your particular industry in the next ten years? Again, answer those questions to safeguard yourself against any business failures.
There is no doubt that you might be competing with some of the chains, but identifying all of the four factors above will make you less susceptible to hiccups and unexpected issues on your business journey.
Factor in Finances
Yes, part of your business model will include a section about finances, but this is a big one, so it gets its own step. Everyone knows that financially, the most difficult year in a business’s life is the first. That is because of the start-up capital required to get your business off the ground.
When getting your finances in order, you are going to want to ponder a few things. The first is whether you will want to rent the property or purchase the building outright. Of course, you will have to research the cost per month to rent the space, and then calculate that against the cost of buying the franchise. Figure out what you can afford and what you can’t. Break it down by month, by quarter, and by year so that you have all the numbers at your disposal.
The second set of calculations you’ll want to make involve the one-time payments and the recurring payments. Of course, there will be more one-time payments related to opening your business, and then eventually, you will have recurring payments (such as rent or a mortgage, employee salaries, taxes, and more). Some costs you will need to consider:
- Equipment costs. Think of washers, dryers, detergent, irons and ironing boards, hangers, laundry baskets, tables, chairs, and more. Again, your full equipment list will be dependent upon what type of store you are opening.
- Point of Sale system. A reliable one will cost you a few thousand.
- Rent and insurance. This goes without saying, but is necessary to factor in.
- Employee costs. Depending on how many employees you have, this number will change.
When done right, and if you keep yourself organized, you will eventually see a return on your investment. Do some research into which banks can give you a small business loan with the best rates. You should also consider applying for a business credit card and a business bank account. It is important to keep your personal account and your business account separate.
Register Your Business Entity
Once you have listed all of your costs, you will have to decide how you want to register your business. There are a variety of classifications when it comes to this process, known as business entities. These business entities include:
- Sole proprietorship
- Limited Liability Company, or LLC
First, you should choose a name for your laundry business that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another laundromat or dry cleaners.
Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your laundry business be sued, your personal assets would be protected.
Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.
Finally, be sure to secure all of the necessary permits, licences, and other paperwork associated with opening your laundry business. Your best bet is to check with a business attorney and to determine the legal documents you will need according to your location (state, federal, etc.).
Zero in on the Building
Now it’s time to think about your location. This step requires you to be a bit strategic, as there are some areas in which a laundry business might not be the best addition to their town or city, simply because they may not need one. If you are opening a laundromat, then you will want to look in a location where people do not have a washer and dryer where they live or stay. Apartment complexes that don’t have washer and dryer units within the apartments are a good bet, as are motels. Hotels can sometimes feature a laundry service, so if you are looking in an area near a hotel, then check with them to see if it’s an offered amenity.
Dry cleaning, on the other hand, will likely attract people who are looking to have business clothing and hard-to-clean clothing handled for them. Looking in and around business districts might be a good start for your search, as employees of those businesses can drop off their clothing, go to work, and then pick it up before they go home. It is in your best interest to research the area first before moving forward with securing a building.
When you tour the buildings, look at them carefully. Will they be spacious enough on the inside to accommodate all of the washers and dryers? Will you have trouble squeezing in tables and chairs for people who wait for their laundry or who want to fold their laundry? Go in with a mental picture of your ideal laundromat or dry cleaners, and then as you browse the available listings, see what most closely matches your vision.
Hire Your Staff
There will be a multitude of positions you will need to fill, so start the hiring process as early as you can. Develop a job application, figure out the kind of employee you want for each position, and then begin your search. Keep in mind you might have to conduct the interviews yourself, but that means you will know exactly who is coming in to work under you.
If there are any particularities you want to promote throughout your store, such as store culture, you will need to train your staff on those. Be ready to walk them through precisely what you want to see and hear throughout your store. The service they provide to your customers is what will keep your clients coming back, thereby increasing your revenue.
Prepare for the Opening
Once you have secured your location, registered all your documents, and hired your staff, you are ready to open your doors. Consider the marketing options you have at your disposal, such as advertisements in the local newspaper, a website, hanging flyers in the shops around town, and of course, word of mouth advertising. Many stores have offered an opening promotion, such as discounts for the first hundred customers, so see what you can do financially without experiencing a tremendous loss in the first few days.