How to start a business that makes money from dirty garments

culled from:smallstarter.com

Doing our laundry is one of many chores we love to hate. Everybody wants to wear clean and neatly pressed clothes, but nobody loves to do the washing and ironing. Busy and demanding city life is making more people willing to pay laundry businesses to take care of their dirty laundry. The Dry cleaning and laundry services market in Africa is huge and growing at an amazing rate. This business, which can be run from home with little capital investment, is a goldmine for smart entrepreneurs who are able to provide the convenience needed by customers at a reasonable price. This article explores this interesting business idea and how you can make it work for you…



Technical note: Dry cleaning and laundry involve two totally different processes. While both terms may be used interchangeably in this article, it’s important to note that dry cleaning is the practice of cleaning clothes with special chemicals (and not water). Laundry generally involves the use of soap, detergents and water to clean clothes. Dry cleaning requires technical skill and is preferred when the materials to be cleaned are delicate and cannot withstand the rough and tumble of a hand or machine wash.



Why is the market for dry cleaning and laundry services growing in Africa?
More Africans are living the city life

drycleaning-laundry-business 2City lifestyle is the main reason for the rising demand for convenience services like dry cleaning and laundry. If you currently live in the city, we’re sure you understand the kind of lifestyle we’re talking about. Nowadays, most people who work 9 to 5 jobs or run their own businesses are often too tired and can hardly find the time to do their own laundry. The weekends are now most cherished for rest and relaxation after a hard week’s work and most people are unwilling to sacrifice this spare time for their laundry.



Fewer housewives in the cities

Most households in the city are now more likely to have two working spouses. Unlike in the past when most women were considered full-time housewives, many women now work at jobs or run a small business to support the home and share in the economic burden of their partners. Even the housewives who still exist in the cities are now more likely to pay other people to do the household laundry – for their children and husbands. As a result, there is now a fast growing need to ‘outsource’ the undesirable laundry chore. (photo credit: maryannscupboards.com).



Special laundry needs

drycleaning-laundry-business 3Another reason for the rising demand for these services is the high proportion of white collar workers in the city. These people are likely to wear formal business clothes like suits and jackets which cannot be washed by the usual traditional methods. These fabrics which are made of natural fibre (like wool, cotton, silk and linen) require professional dry cleaning to maintain their form and life span. In addition to these formal attires are delicate and sophisticated clothing (like wedding gowns) which need a special touch. Other materials that may require a professional wash service include rugs, carpets, curtains, blankets, fabric and leather covers for seats and other furniture. (photo credit: zazzle.ca)



This demand is expected to explode in the coming years. Africa’s urban (city) population has been growing at roughly 3.5 percent every year and more than 500 million Africans will become city people by 2030. At our current urbanization rate of 40 percent, Africa is already more urbanized than India (30 percent) and a little less than China (45 percent). Before 2020, more than 60 African cities will have a population of more than one million people and cities like Lagos (Nigeria) is fast becoming one of the most populated cities in the world.



What are the opportunities for entrepreneurs in Africa’s dry cleaning and laundry service market
The most interesting thing about the dry cleaning and laundry service market in Africa is that every one, including the rich and not-so-rich, are willing to pay to enjoy the convenience of having someone else do their laundry. Depending on the market you wish to target, price/affordability will be the major factor for some customers (in poor neighbourhoods) while quality of service, convenience and timely delivery will be the main decision factor for many others. We will look at the range of opportunities entrepreneurs can exploit in this market to build a lucrative laundry business.



Laundry/Dry cleaning pickup and delivery service business

drycleaning-laundry-business 4For most city people, it’s not just about getting somebody else to do the laundry. Many people don’t just have the time to take their dirty clothes to the cleaner’s shop/office and return a couple of days later to pick them up. They’ll prefer someone comes over to the house or office to pick their laundry and deliver it back to them once they’re all neatly washed, starched, pressed and ready to wear. And this segment of the market is willing to pay extra to enjoy this service.



The sort of people who are likely to sign on to this service are busy career professionals and uniformed service men (like the military) who work long hours throughout the week and spend a lot of their evenings in traffic. They have a need to look clean and smart at the office but hardly have the time or energy to do their own laundry. This segment of the market values convenience, timely pickup and delivery and well-washed and ironed clothes.



Entrepreneurs who are interested in this segment of the market may invest in equipment for doing the laundry or hand it over to a capable and fully-equipped laundry facility to handle it. The profit you make is the difference between what you pay to the dry cleaning service and the price you charge your clients. The profits from this niche business can be significant if your clients are rich upper-class professionals who place a higher priority on the quality of your service and the convenience you offer over the prices you charge.



Operate a dry cleaning and laundry shop

drycleaning-laundry-business 5A laundry shop is the place where the actual sorting, washing, drying and ironing (pressing) of the laundry are done. Entrepreneurs who run this business from home or on a small-scale tend to use manual methods (like hand washing) to clean the clothes. Due to high unemployment in many parts of Africa, it is relatively easy to get cheap unskilled labour to wash and iron the clothes. This manual option requires very little startup capital and the running costs are typically low. This type of service will appeal to customers who are particular about price and will only pay a minimum fee for laundry services.



While manual methods will work for a small customer base, as the number of your clients increase, it becomes more cost-effective to invest in laundry equipment like washing machines. Standard washing machines come in various sizes and are rated according to the weight of clothes they can handle. The average lifespan of a typical wash machine is about 15 years (depending on the quality of the brand and usage).



drycleaning-laundry-business 6With laundry equipment, smart entrepreneurs can do more laundry in a shorter time. This allows you to serve a larger number of clients and do more quality work. However, there's more to it than just feeding the machine and pressing the dry clothes afterwards. Before cleaning, garments are inspected and classified and the amount of time spent on them depends on how dirty or stained they are. Some heavily stained garments may go through a stain removal process before washing.  With dry cleaning operations however, solvents such as Perchloroethylene (popularly known as PERC) and other strong spot and stain removal chemicals are used. (photo credit: 2wired2tired.com)



In addition to the laundry shop, most businesses have a collection centre where customers can drop off their dirty clothes and pick them up after cleaning. These centres are usually small shops located in residential or office areas where the kind of customers you target live and work.



Some important things to consider before you start a dry cleaning and laundry service business
Capital – Only start with what you need…

drycleaning-laundry-business 7If you intend to start a laundry/dry cleaning pickup and delivery business only, your single largest capital investment will be in a durable delivery van.  Clean and pressed clothes will need to be hung on racks in the vehicle during delivery to prevent them from becoming soiled or wrinkled. Since your entire business will depend on your vehicle, it’s important to ensure that it is well maintained and in good condition at all times. It will also be essential to have a plan for dealing with breakdowns and mechanical problems.



However, if you wish to start a dry cleaning and laundry shop, more startup capital will be required to take care of rent, utilities (electricity and water), consumables (soaps, detergents, hangers, chemicals etc). Since most customers do not pay for the service until the clean clothes are returned, you will have to set aside some working capital to take care of staff salaries and other expenses. Additional capital may also be required to get a shop that will serve as your collection point at a location where your customers live or work.



Customer service will make or break you…

drycleaning-laundry-business 8If you serve your customers well, they are more likely to continue using your services and will recommend you to neighbours, friends, colleagues and family. Especially for the pickup and delivery business, it’s essential that you pick up and return their clothes on time and ensure that the clothes are spanking clean. You could also provide your own garment bags for customers to use. These garment bags can have your company name, phone number, and website address printed on it. This serves as a convenience for the customer and can also serve as a good marketing tool.



Disputes can arise in this business and can often cause problems. Before you accept garments that are heavily stained, you should check with the customer that they're aware that you don't guarantee a 100 percent perfect result. (photo credit: mindfulmomma.com)



Location matters…

If you intend to start a laundry cleanup and delivery business, your location may not really matter since you’ll be meeting your customers to pick up and deliver their garments. However, if the distance between your clients and the dry cleaners/laundry wash is too far apart, you may be spending a lot of money on petrol for your delivery van. It’s usually good to agree with your clients, a day during the week or weekend that you’ll come around to pick up or drop their stuff. That way, you’re more organized and can plan your routes around town.



If you wish to start and run a business that does the actual laundry and dry cleaning, it doesn’t really matter where your laundry shop is. However, you may need to open a collection centre in a prime location that’s close enough to your clients.


Costs – You have to keep them in check!

Due to the frequent shortage of electricity in many African cities, most businesses have to own petrol/diesel-powered generators to provide the electricity needed to run washing machines, pressing irons and other equipment. While the added cost of running these generators often does not make this business unprofitable, it’s important that you always keep it in mind.



Another major cost of the laundry business is staff costs. Unless you’re using machines (which means you’ll have fewer staff), manual hand-washing will often require that you pay your employees salaries/wages. We strongly advise that you pay some staff (especially those who do the actual laundry) based on the quantity of the clothes they wash or press. That way, the more work they do, the more they earn. But make sure you have a way of checking that they’re doing a quality job and not just going through the motions. Your equipment is also another important element. Make sure they’re properly maintained and serviced to avoid any unplanned breakdowns that may cost you a lot and disrupt your business.



Pricing – How much should you charge?

The price you charge for your services will depend on how much your customers can afford and the value in your services. Do a little bit of research to find out how much the existing laundry services charge. Do a quick survey to size up the market and find out if they are satisfied with their current services. What are their complaints – price too high, poor customer service, late or inconsistent deliveries and pickups?



If the information you collect reveals that the market is underserved, it may be an opportunity to provide a faster, high quality and more affordable service.



Putting it all together…
drycleaning-laundry-business 9Africa’s dry cleaning and laundry service market is on a path of steady growth. More people are bound to need this service as they demand for more convenience in their already busy lives. Since almost nobody likes to do their dirty laundry, smart entrepreneurs can carve out and dominate lucrative niches in this market.