How to Start a Laundry and Dry Cleaning Business

Last Updated on April 9, 2023

In this article, you will learn how to start a laundry and dry cleaning business with easy steps. It is not one of those really demanding businesses as long as you have the basic requirements.

Many individuals require laundry and dry cleaning, it eases their stress and with your business, you get paid to do the job.

Perhaps, you completed the basics, which include deciding on a catchy business name. Just make sure not to use an existing business name. Do your research before concluding on a business name.

How to start a laundry and dry cleaning business

Below are the steps regarding how to start a laundry and dry cleaning business:

1. Have a business plan

You need a business plan to boost the chances of your success as a laundryman. With a simple plan, you can map out your business problems and strengths to make informed decisions.

Your business plan should be able to disclose an estimated startup and ongoing cost, your target market, the price of your drycleaning services as well as your overall brand.

2. Open a business website

You need a business website. Apart from making your business appear professional, it creates an easy-to-reach channel for the public.

You do not need a big laundry business to create a business website. The essence of a website is to give you an online presence.

You can complement your website with social media accounts such as Facebook pages, Twitter, Instagram, and more.

There are lots of website builders you can use to create your website. If you have no experience, you can hire a developer to create you a simple business website.

You only need to pay to hose the website. Before then, you will buy a domain name that is the same as your business. When deciding a business name, make sure it is available as a domain name so that people can easily contact you.

3. Create a legal entity

Some of the commonly used legal entities include partnership, sole proprietorship, corporation, and limited liability company (LLC).

The Importance of having a legal entity is that it protects your laundry and dry cleaning business from becoming liable when your business is sued.

When you form an LLC, you only have to pay your state’s LLC cost. You can hire experienced LLC Services to complete the process on your behalf.

When you form an LLC, you only have to pay your state’s LLC cost. You can hire experienced LLC services to complete the process on your behalf for a small fee. Read one or two reviews of LegalZoom, a very well-known LLC formation service that can help entrepreneurs establish their very own LLC in a competitive market filled to the brim with opportunities.

4. Sign up for taxes

The next step is to register for federal and state taxes before you launch the dry cleaning business.

Apply for EIN (Employer Identity Number) for free.

Your business structure also determines how you are taxed. For instance, if you choose LLC, you may be taxed as an S corporation (S corp).

5. Create a bank account for your business

You need to open a business bank account and obtain a credit card. A business bank account and credit account protects your asset.  Personal assets include your vehicle, home, and more. If you mix personal assets and business assets, you can lose personal assets if your business is sued.

When you have good business credit, you can obtain credit cards and other financing opportunities under your business with higher credit lines, good interest rates, and more.

Open net-30 accounts when establishing your business credit. Net-30 credit arrangement allows your business to pay vendors within 30 days after you receive their goods or services. This is a good step if you do not have cash on hand but need to obtain inventory quickly.

Moreover, net-30 accounts are also reported to the major business credit bureaus including Experian Business, and Equifax Business Credit.

With this, your drycleaning and laundry business can qualify for credit cards and other lines of credit.

6. Own a business credit card

A business credit card allows you to separate personal and business expenses. In this case, your business expenses go in one place.

Business credit cards typically build the credit history of your laundry business which you can leverage to make investments in the future.

You should also have a business account to record your business expenses as well as your income sources. This will help you understand how your business is fairing and performing financially.

Ensure to keep detailed and accurate accounts to have simpler annual tax filing.

7. Apply for licenses and permits

You need licenses and permits to run your business. Otherwise, you might be fined heavily which may collapse your business.

Ensure to complete local, state, and federal license and permit requirements.

Specific state permits and licenses may be required to operate your laundry and drycleaning business. Refer to your state’s website to learn what permit is applicable to your business. Use the comment section and we will gladly assist you with the correct information. Make no mistakes.

In some states, you must collect sales tax on the goods or services you provide depending on your business. This may be applicable to your business state, ensure to check how your state’s policies affect your business.

You can check with your town, county, or clerk’s office. Any local association listed in the directory of your state’s Small Business Associations will help with the needed information.

You need the Certificate of Occupancy

A business that operates out of a physical location may require a Certificate of Occupancy (CO). This shows that your business meets the building codes, zoning laws as well as government regulations.

If you are leasing your location, your landlord is responsible for obtaining the CO. Thus, before you lease, verify if the landlord obtained a valid CO applicable to your laundry business.

Renovating a business building significantly typically requires obtaining a new CO. If the place of business will be renovated, include language in your lease agreement to show that lease payments will be made after the issuance of a valid CO.

If you are purchasing your business place, you are responsible for obtaining a CO. Make sure your laundry and dry cleaning business meet the building codes and zoning requirements for the location.

Labor safety requirements

Make your business complies with the relevant Occupational Safety and Health Administration requirements.

8. Insure your laundry business

You need to get insurance to legally operate your laundry and drycleaning business. Insurance protects your business from being liable for losses.

You can select from the various insurance policies available for different business structures. You can start with General Liability Insurance if you do not know insurance policy is the best for your business.

General Liability Insurance is commonly used by many small businesses.

You can also purchase Workers’ Compensation Insurance if you will have employees running your laundry and dry cleaning business.

9. Set up a phone system for your business

You need a business phone for your laundry and dry cleaning business.

Apart from separating your personal life from business life, a business phone can automate and legitimize your business. You can select your phone service from a variety of available services.

How profitable is a laundry business?

Laundromats generate about $5 billion in combined nationwide gross annual revenue, so there is more to make in the laundry business. The average laundromat makes about $450-$500 daily. This amount includes revenue from the dryers, washers, and secondary income streams like vending revenue.

Cost of starting laundry and drycleaning business

At least $50,000 can start a laundry and dry cleaning business with basic supplies. You can lease some supplies to cut the starting cost.

You have to pay the deposit for the lease of your business place until you are working from home. If your business place is in a high-traffic area, you will pay between 3 and 10 dollars per square foot every month for the retail space.

You will pay for signage that will be placed at the front of your laundry store. It must be visible to people. Supplies are also required, including plastic bags for packing clothes, coat hangers, washing liquids, and cleaning solutions. A mechanical cloth rack is required to rotate the finished clothing to keep them for customers to pick up.

Ongoing expenses for a laundry and drycleaning business will include insurance, rent, equipment lease, supplies, and marketing. Marketing is necessary to promote your brand to the locals.

Your target market

A laundry and drycleaning business is a retail business with repeat customers from your local area. You can offer subscription services to customers to increase your profits. Everyone can be your target market but you do not want to overprice your services.

How much can you charge for laundry and drycleaning?

A pound of regular laundry starts from about $0.99 to $1.99 depending on the items. Some items require pressing while some require folding. Drycleaning charges can be as high as $30. Typically, the cost of shirts or blouses starts from $1 for each item, about $10 for suits, and $5 for pants.

Final Thought

When you open your store, make sure you do not expose customers to chemicals. Some customers may have possible allergic reactions. Overall, be mindful of the chemicals you use to avoid damaging items.

You may be interested in other business ideas such as the bedsheet business and perfume business.