9 Steps for Starting a Dry Cleaning Business
For the handful of people out there who love doing laundry, starting a dry cleaning business can let you combine your passion with the freedom of being your own boss. While opening a business never happens with the snap of a finger, we’ve broken down the nine steps you can follow to learn how to start your new dry cleaning business.
How to Start a Dry Cleaning Business in 9 Steps
1. Write a business plan.
First, you’ll need to write a business plan to help you narrow down your business ideas. To gather all of the necessary information for your dry cleaning business plan, you should take a deeper look into the following three things.
It is possible to start a dry cleaning business for as little as $2,000 if you run a delivery or drop off-based service from home—but in most cases, costs will range from $100,000 to $1 million. Why? It depends on the type and quality of equipment you invest in.
So, as you start planning, you’ll want to think ahead about the costs of equipment including:
- Washers and dryers
- Sorting bins
- Hangers and garment bags
- Detergents and chemicals
With those basic items, you can easily get up and running and start accepting customers. However, it’s not just the heavy equipment that contributes to startup costs. You’ll also want to plan for costs associated with hiring staff, opening a physical location, marketing your business, and more.
At this point, it’s also crucial to figure out who your business is for. This will help you determine where you should open your business, how to market it, and so much more. Consider the following questions:
- Do I want to be in a city and gear my business toward people who don’t have washers and dryers in their living spaces?
- Will I be a bargain dry cleaner or high-end?
- What type of garments do I not want to deal with?
- Do I want to market myself to environmentally conscious people by using eco-friendly products?
- What is my turnaround time?
Deciding on factors like these will help you narrow down your agenda and also assist you when picking out equipment and materials. Not identifying your target audience could lead to confusion, unsatisfied customers, and an overload of business that you might not be able to handle right away.
Services and Pricing
Once you decide the type of customer you’re after, you’ll then know what services to offer and how much you can charge for them. You don’t want to price yourself out of a given market, but you also want to make as much profit as you can. Some service options you can offer are:
- Full-service dry cleaning (cleaning, pressing, bagging)
- Drop-off services vs. pick-up
- Just pressing
- Just washing and drying (i.e. a simple laundry business)
- Retail merchandise (i.e. will you sell your detergents/soaps, irons, laundry bags, etc.)
Once you determine your services, then you’ll also have to figure out how much to charge. Here are some pricing models to consider:
2. Choose a business structure.
Choosing a business structure, or business entity type, will be much easier after you’ve gone through the process of writing your business plan. It’s also one of the first things you want to do, not only for financial reasons, but for legal ones. It has importance for taxes, liability, and future company changes.
Although there are a variety of entity types, you’ll likely want to consider choosing a business entity that offers you liability protection—an LLC, C-corporation, or S-corporation. Unlike a sole proprietorship or general partnership, these entity types prevent you from being held personally liable in the case of a lawsuit against your dry cleaning business.
Ultimately, however, it’s up to you to decide which entity type is right for your business, so we’d recommend consulting with an attorney or a tax professional to gain some more insight.
3. Choose a business name and register your business.
The next step to starting a dry cleaning business? Choosing a business name. Before coming up with a name, though, you should make sure to check trademark databases, your business directory, and any other resource that will notify you if your desired name is already in use.
That said, registering your business can really happen at any point before opening, but you will need your business name to do so. The longer you wait, the more personally liable you will be for things that happen with your business, and the higher the chance that the name you want won’t be available. Of course, if you are sticking with a sole proprietorship or a general partnership, there is no need to officially register your business with the state.
The process and fees for registering your dry cleaning business will vary depending on your state, so you’ll need to check with the appropriate local offices.
4. Secure funding.
Now that you’re ready to get in the weeds of your business, you’ll want to make sure you have the funds to get started. Luckily, you should have already estimated your startup costs while writing your business plan, but now you’ll want to make sure you have access to the funds you need.
There are a variety of types of funding you can turn to for your dry cleaning business—including small business loans, investors, business credit cards, friends and family, or even bootstrapping your business yourself for a while.
5. Find a location.
Choosing a business location could be the difference between your dry cleaning business being successful or it falling under the radar. You’ll need a space large enough for all of your equipment, the back office, and the storefront itself.
Have an idea of the size of the equipment you will need and take those measurements with you when you look at locations. If it’s in your budget, you can also account for some renovations on a location to make room for the equipment, or change the layout to accommodate your vision.
6. Source and install equipment.
Before you purchase or lease equipment for your dry cleaning business, make sure you attain all the necessary permits and licenses needed in order to have it installed, and make sure it’s operating according to code.
That said, it’s not only the specific dry cleaning equipment you’ll need. You may also need office supplies, kitchen appliances (if you plan on having a break room), bathroom supplies and outfittings, computers, printers, signage, etc.
Finally, once you’ve ordered all of your equipment, you’ll need to hire professionals to install it, hook it up, and make sure it runs smoothly and in compliance with local codes. You don’t want to run the risk of your business being reported and shut down (or face a lawsuit), so compliance is key.
7. Get state and local approval to open.
Before customers can walk through the door of your new dry cleaning business, you’ll need to get approval from the city that your building is ready and that your business has everything it needs to operate.
The licenses and permits you’ll need will vary by state and city, so look into the guidelines for the state in which you’re opening your business and make sure you check all of the boxes.
With dry cleaning businesses specifically, you may need:
- A certificate of occupancy
- To post related safety, labor, or health codes, such as OSHA regulations
- Certificate of insurance
- Registration with the State’s Department of Environmental Protection
Ultimately, you’ll want to get any applicable state or local approvals before moving ahead with actually opening and running your dry cleaning business.
8. Hire employees.
Once you are given the go-ahead to open your dry cleaning business, you can now get into some of the more fun details, like figuring out gaps in work responsibilities and hiring accordingly. This isn’t something that is an absolute necessity in the beginning, but if you do need employees, this is the point in the process where you’d want to do it.
To find the right employees for your dry cleaning operation, you’ll want to put together a detailed job description and decide how much of your budget you can allocate to payroll. Utilize online job boards, the local newspaper, and your own store window to get the word out.
9. Market your dry cleaning business.
There are a variety of ways to market your dry cleaning business and keep costs low:
- Social media: Social media is the easiest way to get the word out, as you can create accounts on different platforms for free and use analytics to track your audience, which posts are the most successful, and when you shared those successful posts.
- Local marketing: Have some flyers made up that you can place around the immediate area of your new dry cleaning business, come up with a fun slogan to attract customers, and you can even offer discounts to the first few customers. Any efforts to incentivize passers-by to use your business for their dry cleaning needs will pay off.
Don’t forget to create business profiles on Google and Yelp so your dry cleaning business and website come up when people search for your services.
The Bottom Line
As we’ve seen here, understanding the technical, legal, and formal steps involved with starting your dry cleaning business will set you up for success long before you open your doors and begin serving customers.
- Entrepreneur.com. “Dry Cleaning Delivery”
- Kompareit.com. “2020 Average Costs to Start a Dry Cleaning Franchise”
- Licenselogix.com. “Dry Cleaning Business Licensing”