Just this week, I was asked the same question by four people because they want to start a small laundry business. This was the first time I realize that there are people who actually wanted to learn about the industry.
During the first week of this month, I began to worry that the niche I tried to enter is too small and that there are very few people interested in what I do. One reason is that I only had a handful of people who visit my site. So I tried to reach out and to my network and observe what will happen. I had a few conversations with my friends and four of them responded positively.
And they have one very similar question that we discussed. So I figured I would just share with you also.
How much does it cost to start a small laundry business?
The short answer is it depends.
It depends on the setup of the laundry shop that you desire to put up. Is it a one stop laundry shop or a coin operated Laundromat? There a lot of things to consider when starting a laundry service business and it is always better to do your research first.
In my case, a one stop laundry shop. You just drop off your dirty laundry and we will do the rest.
The long answer is this…
You will need around 200,000.00 pesos to start a small laundry business. Surprised? Really. It’s that expensive. I’ll break it down for you.
Let’s define the small laundry business as a 15 to 20 square meters of floor area with one washer and dryer. A brand new quality high-efficiency washer costs from 40,000 to 50,000 pesos. It’s almost the same with drying machine. If you don’t own the place, you have to consider your rent deposit and advance payments which may cost you about 30,000 to 40,000 pesos depending on your location.
You have to allot a budget for purchasing the required inventories and consumables such as supply of detergents, bleach, and fabric conditioners. You will also need to buy essential accessories like baskets, tables, chairs and the likes. Budget for documentation such as forms and receipts should also be considered. Registrations fees and other legal obligations shall be settled too before you even start your small laundry business. Prepare at least 50,000 pesos for these considerations.
Oftentimes, you will also need to rehabilitate or renovate your space to utilize it as a laundry shop. Water supply, drainage system and power supply often needs to be modified because some commercial spaces were built as bare or the commercial unit owner is expecting a tenant that requires only basic features. Allocate 20,000 pesos to 30,000 pesos tor this.
And there goes your 200,000.00 pesos! Note that your buffer fund should NOT be included in here.
Tips and recommendations
You can reduce your expenses by buying second-hand machines. A brand new machine is not a requirement. As long as the machine works fine, then it will not be a problem. Just examine the machine carefully before you buy it.
Shop around for suppliers. Do not stick with one supplier. Continuously, talk to different suppliers and compare their prices to get the most competitive deal.
For a start, try to establish a drop off / pickup station first. You will save a lot of money because you will only need a small space. Smaller space means lower rent. Wash the laundry in your house. You will even save power and water bill consumption because you avoided the commercial rate.
Shhh… Don’t tell. Okay?