The need for laundry services has grown over the years. This is why we’ll be looking at how to start a dry cleaning business as an investor in the niche.
This points to one thing and that is opportunities! As an entrepreneur, you might want to consider establishing a cleaning venture in your city.
Although lots of people have ventured into the business of dry cleaning, there is still room enough for you to exploit this area.
Starting up a Dry Cleaners Business
We’ve put together this article to provide answers to the “how” of setting up your own business. However, the type of dry cleaning business to operate will be the first decision you make.
Before actually opening your dry cleaning business, there are several things that you must first have in place to move forward. And this takes us to our first point;
Dry Cleaning From Scratch Vs Buying a Franchise
Which is better? Before we come to the answer, you may need to know that there are established dry cleaning businesses that sell franchises. So many of them exist. So, turning to the question on which is better, it all boils down to perception.
In other words, it depends on who you ask. Some people are more risk-averse while others are more adventurous when it comes to investments.
The adventurous type of investors would prefer starting their business from scratch. On the other hand, the risk-averse types of investors would want to play safe or limit their risks significantly.
In this case, they’ll rather invest in a dry cleaning franchise.
Lots of profitable dry cleaning franchises exist, but there’s no guarantee that these are more profitable than one which was started from scratch. Especially when the dry cleaning business started from scratch finally succeeds.
Even the successful dry cleaning franchises were once built from scratch. So, the decision is entirely up to you.
Types of Dry Cleaning Services
To start a dry cleaning business, you’ll need to know the types of services. This is important because you can have an idea of what you need to do.
That is, either providing a full range of these dry cleaning services or specializing in specific ones.
You might come across certain types of cleaning such as wet cleaning or hand laundering which might get you confused. You shouldn’t be. Dry cleaning itself isn’t a “dry” process as some will think. It’s simply a cleaning process that makes use of chemical solvents on clothing and textiles.
Most common types include the following;
Liquid Silicone Cleaning
Liquid silicone cleaning is ideal for soft fabrics. These types of fabrics might get damaged or lose their color when laundered the usual way in detergent water.
However, liquid silicone has a tender or gentle effect on it. It removes dirt effectively while not tampering with the fabric’s colors.
This is a bit more expensive though.
Eco Dry Cleaning
As the name suggests, this type of dry cleaning refers to all types of cleaning which excludes the use of perc as a cleaning agent.
So, what exactly is perc? This is a colorless chemical liquid compound used for dry cleaning. Its chemical name is Tetrachloroethylene.
Is it harmful? It has been established that this dry cleaning agent produces toxic chemical waste.
The toxic chemical waste produces cancer in rodents. As such dry cleaners using this eco-friendly method have excluded it completely.
Hydrocarbon Dry Cleaning
Petroleum-based solvents are used as dry cleaning products under this type of dry cleaning. Dry cleaners using this cleaning option spend more time cleaning due to the solvent’s less aggressive nature compared to others.
If you need to get rid of oil-based stains fast, then this type of dry cleaning will be your best bet. The downside to its use is its likelihood to leave behind chemical odors.
Another problem with using this method is its likelihood to cause color fading on clothing at high temperatures.
Dry cleaners who are environmentally conscious will prefer this method. This is because it is much safer to use than a cleaning agent like perc.
Carbon Dioxide Cleaners
Carbon dioxide cleaners are the best method to adopt when faced with toxic residues, fire odors, and soot among others. It is also a more expensive type of dry cleaning method.
Plan Plan Plan!
Having discussed the types of dry cleaning services, we shift our focus to the basis or foundation. This is the base or foundation upon which your entire dry cleaning business activities will rest on.
Your business plan plays a major role in the stability, growth, and profitability of your business operations.
These include startup and ongoing costs, having a name for your business, clearly identifying a target market, and the time it will take to breakeven.
Startup and Ongoing Costs
One of the main costs dry cleaning businesses incur is the cost of the rent. Leasing a storefront will come at a cost. The only exception will be if your dry cleaning business will be operated from home.
There are also supplies and equipment to be purchased.
Have a Name for Your Business
Your dry cleaning business needs an identity. That’s what a name confers on it. The name you choose for your dry cleaning business will contribute to its success.
You’ll need to have a catchy cleaning name that transmits the idea as well as sounds easy to pronounce.
Identify a Target Market
Successfully selling your dry cleaning services begins from the moment you identify your target market. This detail should be written out in your business plan.
There should also be strategies to reach out.
Time It Takes to Reach Breakeven Point
This is critical to new dry cleaning businesses. You need to know the time it will take for the cost expended and revenue generated to be balanced.
This enables you to measure if your dry cleaning business is growing or not.
Work Out Your Price Structure
The price structure is important in running a dry cleaning business. It has to do with fixing appropriate and competitive rates for cleaning services.
One way to do this is by comparing the pricing range within the industry. You can begin by calling multiple dry cleaning businesses for a quote.
In setting your pricing structure, you need to also consider factors such as discounts, other types of customer incentives as well as their frequency. This should be done in a way that doesn’t affect profitability.
In other words, there must be a balance when setting what to charge clients.
Every business operates under one form of legal entity or the other. You’ll need to find out what fits your dry cleaning business. Sole proprietorship, partnerships, corporations, and limited liability companies are about the most common types.
The legal entity you choose will have an impact on your business operations.
Certain legal entities such as sole proprietorship won’t protect you from liability. This is because your personal and business assets aren’t separated. On the other hand, LLCs and corporations protect from liabilities.
This is because business and personal assets are separated and defined.
In the event of a lawsuit by a client, only your dry cleaning business is exposed. There are several other benefits to this type of structure. Your best bet is to find a legal expert to discuss things over.
Their advice will prove invaluable in helping you choose a favorable legal entity or structure.
Open A Business Bank Account
A business bank account will be required to further create a distinction between personal and business assets. It helps you keep track of finances and expenses.
That way, it becomes much easier when filing for taxes among other things.
Register for Taxes
State and federal taxes are requirements for dry cleaning businesses. However, certain types of legal entities may not qualify for taxation. First, you need to find out what applies to your business.
Visit the IRS website for further clarification on this.
You’ll need to apply for its Employer Identification Number (EIN). This number is issued to dry cleaning services having employees. Asides federal taxes, different states have their taxation requirements too.
Find out what applies to yours and register accordingly.
Registration for taxes also goes with business registration. You’ll need to register your dry cleaning business to obtain permits and licensing. These are required for the smooth and ease of doing business.
Get to Know Labor Safety Requirements
The Occupational Safety and Health Administration has set forth some guidelines for business owners. These safety requirements cover dry cleaning businesses.
Full knowledge of its guidelines is necessary as you get to avoid sanctions stemming from contravening them.
To be taken seriously, you must obtain comprehensive insurance coverage for your dry cleaning business. This benefits the business and the client.
Also, clients are more confident in patronizing your cleaning service as they know that there’s an insurance cover protecting their belongings.
Marketing Your Dry Cleaning Service
Once you are set up, you will need to start marketing and advertising your services. There are numerous ways that you can do this, including running ads in the local newspaper and radio stations, as well as offering coupons.
You may also opt to put up a website to market your business online, as well as place an ad in the Yellow Pages.
No business activity will be complete without marketing. This s all about showcasing and creating awareness about your dry cleaning service. You are likely to have several competitors providing similar services.
Hence, you want to promote your cleaning service by giving reasons why your target clients should patronize your business over those of your competitors.
The process of starting a dry cleaning business can be hectic. However, knowing what to do and when to do it will help accelerate the process.
Information is power! As such those provided here should go a long way in helping you kick start your business.