Laundromat: Sure shot profitable laundry business in India
India is a promising market for laundry and dry-cleaning businesses with thriving economies and a rising middle class.
As a laundry business, you clean fabric for your customers. The industry never goes obsolete. Everyone prefers a relaxed life. And laundry is the household chore everyone hates.
Laundromat is a self-service laundry having coin-operated washers, driers, etc. for public use; a launderette. Term Laundromat is believed to have been derived from a combination of the words “laundry” and “automata”.
A Laundromat business is one of the very few businesses where an entrepreneur can enter the market with little or no prior training, experience, or educational background.
Simple processes are involved in running a laundry business. If you build the business with the right customer base – the Return On Investment (ROI) will be very high.
You could operate a single outlet or chain of them with franchises. A card- or coin-operated laundry service can be introduced.
The self-service format of a Laundromat business is ideal to keep stores. While starting a Laundromat business, one should keep in mind that this can be a saturated market. A saturated market means that there can be washing machines available in every house of the area.
Hence selection of a place is very important. Research your market and, see if the area needs the service you offer. This will help you understand how customers will welcome your business. A concerted effort should be made to differentiate your Laundromat in some way to draw in regular, dedicated customers.
The Laundromat business market is an underrated star market. The number of organized competitors is very low making it an attractive sector. Within no time, you can gain a large customer base.
Since the start-up cost is very low the entry into the market is very liberal. The cost of switching of business might be low but the customers do not have much choice to switch and thus it is a vendor-driven market.
Investment Capital and Return On Investment (ROI)
- If you are setting up laundromat at the outside room of your house, fine. Else, you will have to rent or lease a property. And the price will vary depending on your location.
If it is in a metropolitan city, you can expect to spend a small fortune. You need to pay the advance and the rent for the first month. Else you can get a place for 10k a month rent.
- Combine with it a visually appealing signboard. You also need laundry equipment. Cleaning materials (detergent powder and pre and post washing liquids stock), machines to rotate clothes after cleaning (if automatic – without labour), plastic bags; the list is quite long.
- You may rent certain appliances. But you need to buy other items. Through EMI scheme or lease, required equipment can be brought.
If you need to make a delivery system (if needed) then this is also another major investment. Thus, in all, you would need four lakhs or five lakh rupees to start your laundry business on a medium scale.
If you can handle it all by yourself then you can skip the delivery system and also reduce the investment to three lakhs to four lakhs. If you are opting for EMI or lease the equipment, then the initial capital involved will be reduced.
- Ongoing expenses are your rent, utility bills (power, water, maintenance), marketing campaign, supplies, lease of equipment and, insurance.
- Laundry service is generally a retail business. And it thrives on returning local customers. The best course of action here is to start a subscription service. This way, you prepare a consistent customer base.
- If yours is a full-time laundry business, prepare to handle allergic reactions. Use organic products to minimize such instances. Your efforts here will help you win over environment-conscious clients.
- You should also know how to charge for your service. Analyze your competition and do accordingly.
If the market is good, with a friendly pricing system being charged, in the first six months you can have an assured 15% return on investment. If there is more customer base, the Return on Investment can increase to 60% and above in the first year.
Growth Factor
In the Laundromat business, the number of competitors is quite low. You have to make every effort to grow and establish a good business platform. Experts hold the view that there is no place for competitive pricing as the pricing for washing and dry washing is the same for all the players in the market. If the price is lowered then the price would cause a serious decrease in the return on investment.
To make the prices attractive add more value services like heavy laundry for curtains and quilts, spot removal, ironing etc. A small-time tailor can also be hired and customers can be provided with repair services.
Customers: Target market
Regular household customers and customers with special needs like dry washing the sentimental clothes are considered as high-end customers.
Small-time hospitality businesses join hands with the laundry business. For this, it is essential if there is a marketing book or brochure.
For having a good customer base you should advertise your business in the online and offline yellow pages and various other social media platforms.
You can even create your website so that customers know about your services and can book them. Customers can be attracted if you provide them with loyalty rewards like membership cards, discounts, etc.
Scope of the Market
In India, Women are always troubled with laundry. With the increase in the number of working women and scarcity of maids, this business has got a better scope than it was a decade ago.
By the end of 2025, Laundromat services could be needed by more than three million households on a weekly or even daily basis. The business should be started in most populated cities to make a good amount of profit.
The washermen have already established their business in Delhi, Mumbai, etc. South Indian cities and towns need to focus more on this business where the exposure of the market is very less.
Villages are untapped markets with huge potential, where not every household has a washing machine. One or two in each village would reap good profits.
The best way to start your Laundromat business is in a place where there are lots of bachelors. Most of the households these days have small washing machines which hinder the business.
Washing machines will not be found in hostels, service apartments, studio apartments and other such similar places and bachelors are likely to be the customers of the business. By serving such clients you will be able to establish your stand in the market. Every year there is an increase of 3.5% in the number of people who are using the laundry service in India. However, an increase in supply is not there and this is a market in demand.
Stay Organized
- Launching a business is the toughest test for your organizing skills. Be prepared to handle emergencies as and when it arises. This will make sure that your business runs smoothly during tough times.
- Make sure that you have everything at hand. Equipment you need raw materials and machines; buy and store everything you need. You should also have a vehicle. You will need to deliver cleaned clothes to your customers.
- Build a team that you can trust: Hiring support staff is another area that should command your attention in a laundry business plan. Remember, laundry service is not a one man show. You need staff to handle machinery and clean clothes. Hire the right people to avoid unpleasant surprises.
- You have to register your business as a legal entity. Explore your options and take an informed decision. Inquire about GST and licensing requirements. Discuss your business with the local authorities. Abide by their advice.
- Be aware of the insurance protection your business needs. It may vary depending on your location.
Laundromat: Marketing
- Your business is launched. And you have to announce it to the market. Newspaper ads, magazines, online platforms, social media, TV, radio; channels are there in plenty. Know where your customers hang the most and advertise there. Set up a customer loyalty reward program. Offer free services to new customers.
- Starting a bonus service program too will work wonders. Here, you iron or wash two clothes free of cost in return to a dozen clothes. Request your loyal customers to refer you to their friends.
- Make sure that you mention your unique selling point. This way, you let customers know why they should choose you. Finally, you should have an online presence. Today’s consumers prefer to shop from their smartphones. Ignoring the trend is paramount to leaving tons of money to your competition.
For better customer satisfaction, it is essential to provide customers with clean, disinfected machines and urgent services. You can also make the place a small television for customers to view while they wait to collect their clean laundry. Happy customers return.
If you have a firm mind and dedication to work then no one can stop you from entering any business and for a Laundromat business, you need less capital investment.
The laundry business holds an unlimited potential to generate huge profits. The low total cost of ownership, higher durability and easy-to-service equipment.
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Happy business!!!
